Physician Group Practice Transition Demonstration

1. Physician Group Practice Transition Demonstration Frederick J Bloom, Jr. MD MMM Assistant Chief Quality Officer Geisinger Health System 9/20/2011

2. Centers for Medicare and Medicaid Services Physician Group Practice Demonstration Project First value based purchasing demonstration applied to providers Goals – Improve efficiency (decrease costs) while improving quality (measured on 32 quality metrics) for assigned vs. comparison group of Medicare beneficiaries in the same geographic location getting care from non-site providers. Improve coordination of Part A & Part B expenditures Align reimbursement with quality Reward for improving health outcomes

3. Successful? |

4. Centers for Medicare and Medicaid Services Physician Group Practice Demonstration Project 10 Physician Groups All are groups of > 200 physicians Long term commitment – Application 2003 Baseline data 2004 Originally 3 years starting 4/1/05 Extended to 5 years (5th year completed 3/31/2010) Added risk adjustment cap in the 5th year Currently the next phase - PGP Transition Demonstration Project

5. PGP Demonstration Participants Dartmouth-Hitchcock Clinic– Hanover, NH Deaconess Billings Clinic- Billings, MT Forsyth Medical Group– Winston-Salem, NC Geisinger Clinic– Danville, PA Integrated Resources for Middlesex Area– Middletown, CT Marshfield Clinic– Marshfield, WI Park Nicollet Health Services– St. Louis Park, MN St. John’s Health System– Springfield, MO The Everett Clinic– Everett, WA University of Michigan Faculty Group Practice– Ann Arbor, MI

6. Shared Savings Methodology • If assigned beneficiary total Medicare expenditure risk adjusted growth rate is > 2% below local market growth rate • Then Groups Share up to 80% above the 2% threshold • Shared Savings Capped at 5% of expenditures • Risk Adjustment Capped at 10% above comparison group in year 5

7. PGP Demonstration Quality Measures Note: Claims based measures in italics

8. PGP Demonstration Results - Quality |

9. PGP Demonstration Results – Overall Financial Source: RTI International |

10. PGP Demonstration Results – PGP Shared Savings Source: RTI International |

11. PGP Demonstration Results – PGP PQRI Earnings Source: RTI International |

12. What does it take to be successful? More than 75% of Medicare spending occurs in patients with 4 or more chronic diseases. (CB0) 25% of Medicare beneficiaries consume 85% of the Medicare expenditures. (CBO) 10% of the US population consumes 65% of all health care spending. (CMWF Health Affairs 2007)

13. How did Marshfield Clinic intervene for the PGP project? Multiple simultaneous interventions – there is no silver bullet! Best practice models developed for core conditions Computer based CME opportunities Care management programs Population based feedback to providers Health Information Technology Physician/Clinical Nurse Specialist regional teams ALL interventionsfor the CMS PGP demo are applied toALL Marshfield Clinic patients.

14. PGP Demonstration Design Flaws • Shared savings started at 2% threshold • Local Comparison Group • Beneficiary Assignment Based on all outpatient E&M services (primary care and specialty) • Risk Adjustment • Poor Access to Data |

15. Beneficiary Assignment Local Comparison Group • Based on plurality of outpatient E&M services • All Specialties • 3 groups • PGP assignment if PGP group provided the plurality of services • Null group if PGP touched but did not have the plurality of services • Comparison group if not assigned to the PGP in the prior year and no claims with the PGP in the demonstration year |

16. Geisinger Physician FTE Growth 43 % Physician Growth |

17. Issues with beneficiary assignment model E&M • Included all specialty outpatient E&M services • Patients managed by a non-PGP primary care physician could move into the attribution population based on high cost specialty episode • Patients managed by a PGP primary care physician could move out of the attribution population based on an out of system specialty episode |

18. PGP Transition Demonstration Shared Savings Split – 1st dollar, 50/50 split “Corridor” of significance – 95% confidence interval – varies with population size 5% Savings Cap Attribution – 2 retrospective options Comparison Group - National Risk Adjustment - Prospective, capped at 0.4% per year. New Quality Criteria Leading Quality Option – earns 60/40 split

19. CMS negotiations • Included representatives from all 10 PGP’s • Weekly meetings with CMS over 8 month period • 2 workgroups: • Design • Quality Criteria • Large amount of data shared by CMS • Many options discussed and modeled |

20. Corridor of Significance • A threshold to be sure that the results are not normal variation – statistical “noise” • 95% one sided confidence interval • The larger the population, the smaller the improvement needed to be statistically significant • Produces a 2% threshold above 20,000 patients • Rises to a 4-5 % threshold below 10,000 patients • SIZE of the population is very important |

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22. Prospective vs Retrospective Assignment • Prospective • Allows population to be identified, tracked and managed • However “stayer rate” averaged 74 % for the PGP participants • Choosing this option would reduce the size of the assigned beneficiary • Retrospective • Larger assigned beneficiary pool • Primary care assignment improved the percentage of E&M services provided by the PGP |

23. Attribution – Picked 2 options from 7 • Method 1: PGP (Current) demonstration method. All specialty E&M services • Method 2: Primary Care – Broad (with cardiology, endocrinology, nephrology) • Method 3: Primary Care – Narrow • Method 4: Hybrid of M2 and M1 if no Primary Care • Method 5: Hybrid of M3 and M1 if no Primary Care • Method 6: M1 plus additional E&M codes for nursing facility services and domiciliary, rest home, or custodial care services and home services • Method 7: M5 with additional E&M codes above |

24. Attribution Modeling - Retrospective |

25. Risk Adjustment – PGP demonstration • Different than the “prospective” scoring used in Medicare Advantage • Based on retrospective (concurrent year) HCC scoring • Gave more relative weight to acute conditions that occurred in the performance year • Risk scores rose for all groups during the demonstration • A cap on risk score of 10% above the comparison group was added in year 5 |

26. Prospective Risk Scoring • Uses prior year diagnosis to calculate beneficiary risk scores • Includes age, sex and cost matched population controls • Gives greater relative weighting to chronic conditions • Normalized to adjust for year to year coding pattern changes as in Medicare Advantage |

27. PGP Transition – Final Design Overview • Performance Period: 2 years (1/1/11 - 12/3/12) • Beneficiary Assignment: Pick Model 1 or 7 • Comparison Population: National • Baseline is weighted risk adjusted expenditures in past 3 years • Trended forward based on national average growth rate (absolute per capita dollar increase – risk adjusted) • Risk Adjustment : Prospective • Capped at +/- 0.4% in year 1 and 0.8% in year 2 relative to base year • Minimum Savings Requirement: 95% one sided • Shared Savings: 50% split from 1st dollar savings • Quality Gated • 25% withhold |

28. PGP Transition Quality MeasuresPay for Performance Year 1 &2

29. PGP Transition Quality MeasuresPay for Reporting Year 1Pay for Performance Year 2

30. PGP Transition Quality MeasuresPay for Reporting Year 1 &2

31. PGP Transition Quality Measures • Savings are quality gated • 80% in Year 1 • 90% in year 2 • Quality Targets are based on best performing group in the prior year • Payment on a scale from a minimum to maximum target score for each measure |

32. PGP Transition Quality Benchmarks |

33. Quality Leader Option • Moves from a 50/50 to a 60/40 split • 5% additional savings for reporting on a patient experience measure. Will be specified in MSSP final regulation – likely to be CAHPS-CG • 5% additional savings for reporting metrics in an all- or-none fashion for DM, HF, CAD, HTN, and COPD. • Data Sharing • PGP’s agree to public reporting of quality and financial results. |

34. PQRI • PGP’s will earn their PQRI incentive payments based on the demonstration quality measures. • PGP’s will earn 100% of the PQRI dollars if their overall quality score is > 90%. • If quality score is < 90%, the PQRI dollars will be scaled with the maximum equal to 90%. |

35. Transition Options • The PGP’s will have the option to transition to MSSP or another initiative in the innovation center when available. |

36. Lessons learned • The PGP demonstration showed that it is possible to reduce costs and improve quality – even in prior low cost areas of the country. • Quality scores were uniformly improved by all members of the demonstration but did not translate into shared shavings. • The shared savings were not uniformly distributed to the PGP participants due to numerous design flaws. • CMS was receptive to resolving many of these design flaws in the new Transition Demonstration |

37. Questions? fbloom@geisinger.edu