Medicare Shared Savings Strategy – ACO – VBP – 30 Day Readmissions

Medicare Shared Savings Strategy –ACO – VBP – 30 Day Readmissions Geri Forbes Kathy Whitmire 6/22/2012

A Changing and Challenging Environment The Patient Protection and Affordable Care Act (PPACA) includes several programs to manage/reduce health care costs without compromising quality of care. • Accountable Care Organizations (ACO) • Bundled payments • Value Based Purchasing (VBP) • Community-based Care Transitions Program (CCTP) • Through the shared savings strategy, Medicare is going to transform itself from a passive payer of claims to an active purchaserof quality health care for its beneficiaries.

What is an Accountable Care Organization (ACO)? • Defined as a group of healthcare providers who accept accountability to manage the care of a patient population across multiple care settings, the ACO has the primary focus of improving the overall health of its patients while managing the total cost of care received by them as well as improving the experience of care.

What are the Characteristics of an ACO? • 1) First, it must have the ability to manage patients across the continuum of care and in different settings including ambulatory, hospital inpatient and post hospital care. • 2) Second, it should have the ability to do prospective planning that includes the development of a budget and identification of resources needed. • 3) Third, it should be sufficient in size to support a comprehensive, validated and reliable set of measurements that will enable it to monitor quality and cost of care. Read more at: What is an Accountable Care Organization?http://www.suite101.com/content/what-is-an-accountable-care-organization-a283099#ixzz19JtnsCR4

Legislation: Medicare “Accountable Care Organizations” • Section 1899 of Title XVIII • Title III, Subtitle A, Part III, §3022 • (Medicare shared savings program) • By January 1, 2012, the Secretary shall establish a shared savings program to promote accountability for the coordination of items and services under Medicare Parts A and B for a specified population (with a minimum of 5000), and to encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery.

What is the Measure of ACO Success / Outcomes? • How well the ACO can encourage and support individual physicians, hospitals, and medical communities to reach Dr. Don Berwick’s “Triple Aim” of: • Better Care –Better Quality and Better Cost-Effectiveness • Healthier Communities –With Reduction in Preventable Disease • Better Costs –With Reduced Per Capita Expenditures

Develop ACOStrategic Principles • Well coordinated delivery of care. • Use of technology to increase efficiency in patient care. • Efficiencies balanced with quality. • Reimbursement linked to outcomes. • Management of quality outliers.

Research ACO Infrastructure • Legalities • ACO ownership. • Contracting with providers. • Contracting with payers. • Contracting with administrative stakeholders. • Governance • Collaboration on clinical and financial decisions. • Development of performance benchmarks. • ACO leadership.

Research ACO Infrastructure • Administrative • Network development, maintenance, and provider relations. • Coordination with payer(s). • Payment functions including cost-savings bonuses. • Point-of-Care reminders. • Operational • Data analyses and decision-support. • IT and technology support. • Provider scorecards. • Payer scorecards.

Research ACO Infrastructure • Clinically • Medical Directorship. • Utilization review and management. • Medical review and decision-making. • Disease management.

Develop Customized Hospital Strategy • Identify referral sources – incoming and outgoing; rank and scatter plot. • Analyze practitioner base and medical staff; primary vs. specialty care. • Identify geographic or travel parameters and implications on patient access. • Identify all services and product lines – determine cost to deliver.

Hospital Strategy (con’t) • Analyze the political parameters of hospital leadership and board; consider impact. • Identify hospital’s managed care affiliations; analyze participation across spectrum of hospitals in group; identify gaps. • Determine appropriate ACO affiliation. • Recommend reimbursementmechanisms.

What is Value-Based Purchasing? • Defined as a group of healthcare providers who accept accountability to manage the care of a patient population across multiple care settings, the ACO has the primary focus of improving the overall health of its patients while managing the total cost of care received by them as well as improving the experience of care.

More about VBP • Established by the Affordable Care Act of 2011 (ACA) • Transition hospitals from P4R to P4P under Medicare • Medicare payment incentives/penalties to promote • Achievement of high quality care • Improvement in care quality • Adjusts Medicare IPPS payments starting Oct. 1, 2012 (FFY 2013) based on quality performance

Who is Subject to the Hospital VBP Program? • Acute care hospitals participating in the IQR Program • Excluded hospitals: • CAHs • Specialty hospitals (psychiatric, rehabilitation, children’s, cancer, LTCH) • Hospitals cited for “immediate jeopardy” • Hospitals not participating in the IQR program • Hospitals with small numbers of applicable measures/cases as determined by CMS • Demos to be established for CAHs and small rural hospitals

What’s at Stake Under VBP? • Program is self-funded by hospital “contributions” • Contribution based on Medicare FFS payments* • 1.0% reduction in FFY 2013 • Reduction increased by 0.25% each year • 2.0% reduction for FFY 2017 and beyond • VBP performance determines P4P amount • Budget-neutral • Redistributive • Best performers win, others break even or lose • VBP payments are netted against contributions * Payment reductions exclude IME, DSH low-volume hospitals and outliers.

VBP Scoring Methodology • Hospital performance for each measure is compared to national performance standards • Points are awarded for: • Achieving high quality goals • Improving towards high quality goals • Maximum = 10 points / measure • Points scored for each measure are used to calculate domain scores • Domain scores are weighted to calculate a Total Performance Score

Data Collection Timeframes FFY 2013 Program • Baseline Period • Used to establish performance standards and to measure performance improvement • July 1, 2009 – March 31, 2010 (9 months) • Data already reported to CMS • Performance Period • Used to measure/calculate VBP scores • July 1, 2011 – March 31, 2012 (9 months) • Applies to both Process and HCAHPS measures

VBP Domains * Only some aspects of 2014 program are final

Proposed Efficiency Domain Measure – FFY 2014 Program • Medicare Spending per Beneficiary • ACA requires use of efficiency measures in FFY 2014 or thereafter • Must include total Part A and Part B spending per beneficiary • Must include Medicare spending per beneficiary adjusted for age, sex, race, severity, and other factors as determined by the Secretary • CMS is also considering measures of hospital internal efficiency

Proposed Efficiency Measure Three Days Prior: One Episode Pre-op lab work Ninety Days Post: Inpatient Stay Dr. Visit Dr. Visit Dr. Visit Dr. Visit Rehab ED Visit

Concerns with Proposed Efficiency Measure • Does proposal satisfy ACA mandate for a measure of “spending per beneficiary”? • Holds hospitals accountable for all providers’ practice patterns • Should consider future IOM report and proposal for Medicare bundling demonstrations • Methodology cannot be replicated • No-one can check/audit CMS’ calculations • Industry does not have access to the data

Reducing Readmissions • Hospitalizations account for approximately 33 percent of total Medicare expenditures and represent the largest program outlay. • A retrospective review of Medicare fee-for-service claims conducted by Jencks, et al., found that one-fifth of Medicare beneficiaries discharged from hospitals were readmitted within 30 days, and one-third were readmitted within 90 days. • While some of these hospital readmissions are planned and others are related to the follow-up treatment for specific conditions, Medicare beneficiaries are being increasingly readmitted for avoidable conditions indicative of poor quality of care.

Reducing Readmissions • The Medicare Payment Advisory Commission estimated Medicare costs of approximately $15 billion due to readmissions, • $12 billion of which is for cases considered preventable.

Reducing Readmissions • An avoidable or preventable readmission is considered to be an admission clinically related to the prior admission if there was a reasonable expectation that it could have been prevented by: (1) the provision of quality care in the initial hospitalization; (2) adequate discharge planning; (3) adequate post-discharge follow up; or (4) improved coordination between inpatient and outpatient health care teams.

Reducing Readmissions • it is clear that there are multiple factors along the care continuum that impact readmissions, and identifying the key drivers of readmissions for a hospital and its downstream providers is the first step towards implementing the appropriate interventions necessary for reducing readmissions.

Reducing Readmissions • The CCTP seeks to correct these deficiencies by encouraging a community to come together and work together to improve quality, reduce cost, and improve patient experience. • In 2009, CMS began reporting on a quarterly basis the rate of readmissions for beneficiaries with the diagnoses of congestive heart failure (CHF), heart attack (AMI), and pneumonia (PNEU) on the Hospital Compare website • http://www.medicare.gov/HospitalCompare

Medicare Shared Savings Strategy – ACO – VBP – 30 Day Readmissions