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Healthcare Financial Management Association Insurance & Reimbursement Update. Blue Cross Blue Shield of MI March 22, 2012. Topics: - Population-based Performance - Changes to PHA Incentive Program - Other Update Issues.
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Healthcare Financial Management Association Insurance & Reimbursement Update Blue Cross Blue Shield of MI March 22, 2012
Topics: - Population-based Performance- Changes to PHA Incentive Program- Other Update Issues
Population-based Performance for Hospitals and Health Systems: Supporting the Development of a Value-based Hospital Program to align with Physicians Blue Cross Blue Shield of MI Department of Clinical Epidemiology & Biostatistics March 16, 2012
Overview • Overview of BCBSM’s Physician Incentive Program • Why focus on population-based performance for Hospitals? • Overview of Population-based Analytics for Hospitals • Methods: Inclusion / Exclusion Criteria • Measures: Payment and Utilization Metrics • Defining a Hospital’s Population • Results: Population-based Health System Metric Calculations • Dissemination to Provider and Hospital Community - Enhanced Population Insights report
Introduction: BCBSM’s Physician Incentive Program Physician Group Incentive Program (PGIP) - launched in 2004 Goal: lower health care costs and reduce patient complications by rewarding for infrastructure development to measure and improve the care of patients Physicians enroll by joining Physician Organizations (PO) that act as facilitators (15,471 physicians as of February 2012) Incentive distribution at the PO-level and related to specific initiative participation and performance (approx. $100 million) 5
Core Clinical Process Initiatives Evidence Based Care Tracking Coordination of Care Extended Access Individual Care Management Linkage to Community Svcs Patient-Provider Partnership Performance Reporting Preventive Services Self-Management Support Specialist Referral Process Test Tracking and Follow-up Clinical IT-Focused Initiatives Electronic Prescribing Patient Web Portal Patient Registry Improvement Capacity Initiatives Establishing Staff Dedicated to Managing/Coaching Process Improvement Teams Establishing Analytics & Reporting Staff Condition-Focused Initiatives Cardiac Care Chronic Kidney Disease Encouraging Evidence-Based Use of Hysterectomy Encouraging Evidence-Based Use of Labor Induction Environmental Cancer Service-Focused Initiatives Emergency Department Utilization Pharmacy Initiative: Increasing the Use of Generic Drugs Inpatient Utilization Radiology Management Introduction: PGIP Initiatives
Why focus on population-based performance for hospitals? • Population-based performance is a mechanism for addressing key challenges for Organized Systems of Care • Connects hospitals and physicians through shared patient populations • Going forward, population-based performance metrics will determine a portion of hospital reimbursement and updates • Phase 1: Payments tied to infrastructure development • Phase 2: Payments tied to performance measures
Methods: Inclusion / Exclusion Criteria Membership Criteria: BCBSM Non-HMO Commercial members (0-64 years) who reside in Michigan Have a relationship with a primary care physician (PCP) (currently used in all PGIP incentive programs) Claims Criteria: Includes both Medical-Surgical and Pharmacy claims Includes both in-state and out-of-state paid claims Excludes the top 2% of total attributed members who are cost outliers (methodology used in PGIP physician uplift) Physician Criteria: PCPs participating in PGIP were grouped by Sub-PO Non-PGIP PCPs were grouped represented as a single group
Payment Metrics: “Adjusted” Actual Cost PMPM (Utilization) “Adjusted” Actual Cost Monthly PMPM (Trend) Utilization Metrics: Weighted Utilization (a.k.a. Standard Cost PMPM) PGIP Utilization Metrics: Emergency Department Visits (Overall & PCS) Inpatient Hospitalizations Overall, Non-Maternity Discharges ACSC Discharges 30-Day Readmissions Radiology (High Tech & Low Tech Imaging) Pharmacy Generic Utilization* Pharmacy Script Rates Measures Overview • * Reported as Generic Dispensing Rate (GDR) in the current PGIP dashboard report
Measures: Payment Metrics * “Adjusted” actual costs as utilized in hospital measures will also be used for OSC physician uplift analytics to ensure continuity across both hospital and physician programs • Reports will not include any actual prices for hospital services (actual prices included in calculating trend PMPM but weighted by hospital so will not allow for any determination of hospital pricing) • “Adjusted” actual costs* • Reflect comparable patient care costs by removing charity, bad debt, direct graduate medical education (DGME) and indirect medical education (IME) • Used in the calculations of both the Performance (point-in-time PMPM) and Improvement (monthly trend)
Measures: Utilization Metrics • Weighted Utilization (a.k.a. Standard Cost PMPM) • Reflects pure utilization by removing price variation • Applies a single cost per procedure type (i.e. DRG) to all claims regardless of the place of service • Allows for valid comparison of utilization across time periods, locations of service and contractual relationships • Currently used in PGIP analytics (Initiative-specific reports) Note: For example of the standard cost concept, see the Supplemental Slides: Core Concepts
Overview of Population-based Analytics for Hospitals: Defining a Hospital’s Population
Defining a Hospital’s Population: Step 1 Care Relationship (Attribution) Member PCP Care relationship between a member and a single PCP during a two-year period of claims Based on E&M visits (99201-99205, 99211-99215, 99381-99387 and 99391-99397) A tie-breaking methodology is utilized for members who see more than one PCP during the given time period Physician Organization (PO) Sub-PO #1 Sub-PO #2 Sub-PO #3 Sub-PO #4
Defining a Hospital’s Population • Hospital population measures include patients of: • PGIP physician organization sub-units that comprise at least 10 percent of the hospital’s utilizing members (with a primary care relationship) • OSCs where the hospital comprises at least 20 percent of the OSC’s inpatient volume • A hospital’s population metrics are based on the weighted averages of its affiliated PO sub-units and OSC populations.
Defining a Hospital’s Population: Step 2 Among the 1.8M members with a PCP, 72.1% had a service at a Michigan acute care hospital in 2010) Total BCBSM Members (0-64) with a Primary Care Relationship 1,869,453 BCBSM Members (0-64) with a Primary Care Relationship that Utilized Services at a Michigan facility in 2010 1,347,414 (72.1%) BCBSM Members (0-64) with a Primary Care Relationship that DID NOT Utilize Services at a Michigan facility in 2010 522,039 (27.9%) BCBSM Members (0-64) with a Primary Care Relationship that Utilized Services at Hospital A 51,693 (3.8%) BCBSM Members (0-64) with a Primary Care Relationship that Utilized Services NOT at Hospital A 1,295,721 (96.2%) These are the members that are included in the “weight” calculation (i.e. 17,764 / 51,693 = 34.4%). We then would multiply 34.4% by Sub-PO #1’s total cost PMPM to get their component of Hospital A’s PMPM. This calculation would continue for both Sub-PO #2 and Sub-PO #3 and then combined all “weighted” rates to get a total population-based rate for Hospital A. PGIP Sub-Physician Organizations with whom the BCBSM Member has a Care Relationship with a Participating PCP Sub-PO #3 was included based on OSC 20% criteria Sub-PO #1: 17,764 (34%) Sub-PO #2 : 6,632 (13%) Sub-PO #3: 2,637 (5%) Remaining Sub-POs: 24,660 (48%)
Defining a Hospital’s Population: Step 3 Note: Sub-PO 2 may not meet 10% threshold for Hospital A….. BUT it’s affiliated OSC does meet the 20% Inpatient threshold for Hospital A Sub-PO 1 (90% Physician Affiliation) Sub-PO 2 (100% Physician Affiliation) 2,500 Inpatient Admissions (25% OSC’s IP volume) Organized System of Care (10,000 Inpatient Admissions) Hospital A 500 Inpatient Admissions 300 Inpatient Admissions Sub-PO 3 (33% Physician Affiliation) Hospital B Hospital C
Overview of Population-based Analytics for Hospitals and Health Systems: Results - Population-based Health System Metric Calculations
Weighted Hospital Measure Calculation Overview(Example: Risk-Adjusted Total Cost PMPM for Hospital A) HOSPITAL A ($95.20 + $40.30 + $15.00) = $150.50 Total Cost PMPM Sub-PO A ($280 Total Cost PMPM) 34% of Utilizing Members (weight) Sub-PO C ($305 Total Cost PMPM) 5% of Utilizing Members (weight) Sub-PO B ($310 Total Cost PMPM) 13% of Utilizing Members (weight) 5% * $300 = ($15.00) 34% * $280 = ($95.20) 13% * $310 = ($40.30) Note: This example assumes that only three Sub-POs contributed to Health System A’s total utilizing members. For actual calculations, only the Sub-POs consisting of at least 10% of each hospital’s utilizing members AND Sub-POs with OSCs where the hospital comprises at least 20% of the OSC’s hospital services are included.
Population-based “Adjusted” Actual Total Cost PMPM Weighted by Selected Health Systems REMINDER: Utilization and cost metrics reported for each health system or hospital are derived from a population perspective and NOT based on reimbursement levels
Dissemination to Provider and Hospital Community: Enhanced Reporting: New Population Insights report
New Population Insights Reports • Replaces previous Hospital Insights reports, which focused only on utilization • Provides both payment and utilization metrics • Comparisons of all Michigan hospitals and health systems qualifying for analysis • First reports scheduled for distribution in June 2012 to BOTH hospitals and PGIP POs
New Population Insights Reports: Link to PGIP New Population Insights reports will tie directly to the current PGIP reporting: • Leverage methods and formatting of PGIP physician reports • Utilize the same metrics to determine both performance and improvement (as in the OSC Uplift) • Incorporate additional PGIP-specific metrics • Same level of transparency (performance is not blinded) • All metrics adjusted for patient risk
Questions? Amanda Harrier, MPH AHarrier@BCBSM.com
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