Page 0April 25, 2013
Florida Institute of Certified Public Accountants
Learning the New
Language of Healthcare
April 25, 2...
Page 1April 25, 2013
Florida Institute of Certified Public Accountants
What am I Trying to Say?
Everyone knows these…
LOL ...
Page 2April 25, 2013
Florida Institute of Certified Public Accountants
ACO
CIN
PHO
VBP
PQRS
Are We Speaking the
Same Langu...
Page 3April 25, 2013
Florida Institute of Certified Public Accountants
But health reform isn‟t just changing the industry ...
Page 4April 25, 2013
Florida Institute of Certified Public Accountants
U.S. Healthcare Today:
High Cost, Questionable Qual...
Page 5April 25, 2013
Florida Institute of Certified Public Accountants
Today’s Healthcare:
Moving from Volume to Value
• F...
Page 6April 25, 2013
Florida Institute of Certified Public Accountants
Bundled
Payments
Partial
Capitation
Global
Payment
...
Page 7April 25, 2013
Florida Institute of Certified Public Accountants
The Healthcare System of the Past
Patients
Physicia...
Page 8April 25, 2013
Florida Institute of Certified Public Accountants
Hypothetical
Episode 1: Hip Replacement
• Orthopedi...
Patient-Centered
Medical Home
Primary Care
Physician
Specialist
Physician
Physician
IPA
Bundled
Payment
+ Coordinated Care...
Page 10April 25, 2013
Florida Institute of Certified Public Accountants
What Does “Value” Look Like?
VALUE=
QUALITY COST E...
Page 11April 25, 2013
Florida Institute of Certified Public Accountants
What is a “Value-Based
Payment” Model?
Value-Based...
Page 12April 25, 2013
Florida Institute of Certified Public Accountants
Value: The Answer to FFS?
VBP: Value-Based Purchas...
Page 13April 25, 2013
Florida Institute of Certified Public Accountants
HVBP: Hospital Value-Based Purchasing
CMS initiati...
Page 14April 25, 2013
Florida Institute of Certified Public Accountants
• Participating hospitals began receiving
payments...
Page 15April 25, 2013
Florida Institute of Certified Public Accountants
HVBP
• Penalties for high readmission rates
– FY12...
Page 16April 25, 2013
Florida Institute of Certified Public Accountants
Value: PVBP
PVBP: Physician Value-Based Purchasing...
Page 17April 25, 2013
Florida Institute of Certified Public Accountants
• PQI: Physician Quality Incentives
– PQRS: Physic...
Page 18April 25, 2013
Florida Institute of Certified Public Accountants
Physician Quality Reporting System
(PQRS)
• Today ...
Page 19April 25, 2013
Florida Institute of Certified Public Accountants
Other Forms of PQI
Meaningful Use Incentives/Penal...
Page 20April 25, 2013
Florida Institute of Certified Public Accountants
To Achieve Value, Moving Toward
Integration and Al...
Page 21April 25, 2013
Florida Institute of Certified Public Accountants
Clinical Integration (CI):
The Basics
The extent t...
Page 22April 25, 2013
Florida Institute of Certified Public Accountants
PCMH
PCMH: Patient-Centered Medical Home
• Improve...
Page 23April 25, 2013
Florida Institute of Certified Public Accountants
IPA: Independent Practice Association
• Associatio...
Page 24April 25, 2013
Florida Institute of Certified Public Accountants
PHO
Primary
Care
Physician
Specialist
Physician
PH...
Page 25April 25, 2013
Florida Institute of Certified Public Accountants
CIN
CIN: Clinically Integrated Network
A network o...
Page 26April 25, 2013
Florida Institute of Certified Public Accountants
What Does a CIN Do?
Coordinates continuum of care ...
Page 27April 25, 2013
Florida Institute of Certified Public Accountants
Clinical Integration:
the Road from FFS to ACO
FFS...
Page 28April 25, 2013
Florida Institute of Certified Public Accountants
ACO: Accountable Care Organization
• Network of ph...
Page 29April 25, 2013
Florida Institute of Certified Public Accountants
MSSP
MSSP: Medicare Shared Savings Program
Pursuan...
Page 30April 25, 2013
Florida Institute of Certified Public Accountants
MSSP ACO
• Clinically integrated networks that hav...
Page 31April 25, 2013
Florida Institute of Certified Public Accountants
MSSP ACO Functions
What Really Matters
Establish a...
Page 32April 25, 2013
Florida Institute of Certified Public Accountants
Each ACO participant continues to bill fee-for-ser...
Page 33April 25, 2013
Florida Institute of Certified Public Accountants
Episode 1: Hip Replacement
• Orthopedic Surgeon
• ...
Page 34April 25, 2013
Florida Institute of Certified Public Accountants
Success in Bundling for
Episodes of Care
Successfu...
Page 35April 25, 2013
Florida Institute of Certified Public Accountants
Bundle Up!
Bundled Payments are Coming
Based on Me...
Page 36April 25, 2013
Florida Institute of Certified Public Accountants
Questions?
Page 37April 25, 2013
Florida Institute of Certified Public Accountants
Terms
ACO Accountable Care Organization
BPP Bundle...
Page 38April 25, 2013
Florida Institute of Certified Public Accountants
Thank you!
David McMillan
Principal
PYA
dmcmillan@...
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PYA Speaks the New Language of Healthcare

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PYA Principal David McMillan addressed the 2013 Florida Institute of Certified Public Accountants Health Care Industry Conference and offered a consultant-turned-linguist perspective on “Learning the New Language of Healthcare.”

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  • Originally limited to physician-led practices, NCQA expanded the program to nurse-led practices in 2010NCQA recognizes programs that provide “first contact, continuous, comprehensive, whole person care for patients across the practice”“Whole person care” includes comprehensive care and self management support while emphasizing the spectrum of healthcare needsIf a practice can demonstrate that it provides “whole person care” and meets the other elements of the joint principles for at least 75% of its patients, it is eligible for recognition by NCQA even if it isn’t a traditional primary care practiceEven if your practice does not meet these standards, you may be eligible for NCQA’s Physician Practice Connections Recognition Program (PPC)Ideally, this care model will enable patients, especially those with chronic conditions, from getting lost in the shuffle of our complex and fragmented healthcare systemA study performed by the University of Michigan Health System found that 46% of physician practices do not currently meet the national standards to quality as a medical home – i.e., a practice which manages the ongoing care of patients and coordinates care among specialties and facilities NCQA data suggests that multispecialty physician groups have an increased likelihood for meeting medical home standardsWhat is problematic, however, is that 9 out of 10 Americans receive their healthcare services from single/small physician practicesIt is expected, however, that the increase in electronic health records and high reimbursements associated with the medical home model will gradually result in a more significant movement toward this modelPhysician practices, however, must be aware of the potential for this movement to inadvertently result hardships on those practices which do not have the infrastructure to qualify as medical homes
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  • PYA Speaks the New Language of Healthcare

    1. 1. Page 0April 25, 2013 Florida Institute of Certified Public Accountants Learning the New Language of Healthcare April 25, 2013
    2. 2. Page 1April 25, 2013 Florida Institute of Certified Public Accountants What am I Trying to Say? Everyone knows these… LOL Laughing out loud SMH Shaking my head BRB Be right back JK Just kidding BFF Best friends forever BTW By the way But what about these? PQRS Patient Quality Reporting System PCMH Patient Centered Medical Home CIN Clinically Integrated Network VBP Value-Based Purchasing
    3. 3. Page 2April 25, 2013 Florida Institute of Certified Public Accountants ACO CIN PHO VBP PQRS Are We Speaking the Same Language?
    4. 4. Page 3April 25, 2013 Florida Institute of Certified Public Accountants But health reform isn‟t just changing the industry we work in – it‟s changing the language we speak. Healthcare Has Changed! Payers Healthcare Facilities Specialists Primary Care Physicians Patients Moving from… Moving toward… Patients Primary Care Physicians Healthcare Facilities Specialists Payers
    5. 5. Page 4April 25, 2013 Florida Institute of Certified Public Accountants U.S. Healthcare Today: High Cost, Questionable Quality Where is the Value?? $2,729 $2,870 $2,902 $3,470 $3,696 $7,538 Japan Italy Spain Sweden France U.S.A. Total Health Expenditures per Capita 1 France 2 Italy 7 Spain 10 Japan 23 Sweden 37 U.S.A. WHO's Ranking of Health by Country Source: Organization for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database).
    6. 6. Page 5April 25, 2013 Florida Institute of Certified Public Accountants Today’s Healthcare: Moving from Volume to Value • FFS: Fee-for-Service – The primary method of healthcare reimbursement that incentivizes providers to provide higher volumes of services because payment is solely dependent upon the quantity of services provided, not the quality – Payments are issued retrospectively – FFS has been proven to raise healthcare costs because it promotes overutilization • As U.S. healthcare costs associated with FFS skyrocket, significant efforts have been taken to link payment to the quality and efficiency of care provided instead of volume.
    7. 7. Page 6April 25, 2013 Florida Institute of Certified Public Accountants Bundled Payments Partial Capitation Global Payment Fee-for- Service Shared Savings Visitor Symptomatic Acute Needs Services & Supplies Unit Based No Financial Risk Patient Episode Most Common Conditions Packaged Treatments Efficiency Based Partial Financial Risk Person Overall Health Community Health Characteristics Manage Well-Being Outcome Based Full Financial Risk Evolution of Reimbursement
    8. 8. Page 7April 25, 2013 Florida Institute of Certified Public Accountants The Healthcare System of the Past Patients Physicians/Providers Payers Hospitals & Other Providers  Inefficiency  Information  Economics
    9. 9. Page 8April 25, 2013 Florida Institute of Certified Public Accountants Hypothetical Episode 1: Hip Replacement • Orthopedic surgeon • Surgery - Anesthesia - Pathology • Acute Care • Rehabilitation - PT Martha is a 67-year-old women who needs a hip replacement. - payment - payment - payment - payment - payment Develops rash – dermatology consult - payment Episode 2: Nine months later • ED • Admitted for pneumonia • Treated by hospitalist • Consulted by cardiologist - payment - payment - payment Episode 3: Six months later – Well Check • Gaping hole in information • Information from previous two episodes of care may never reach primary care provider - Drug interactions - Duplicative testing - payment
    10. 10. Patient-Centered Medical Home Primary Care Physician Specialist Physician Physician IPA Bundled Payment + Coordinated Care + $ for Coordinated Care PHO Payer Narrow Network ACO Shared Savings Capitation The Road to Clinical Integration
    11. 11. Page 10April 25, 2013 Florida Institute of Certified Public Accountants What Does “Value” Look Like? VALUE= QUALITY COST EFFICIENCY+ +
    12. 12. Page 11April 25, 2013 Florida Institute of Certified Public Accountants What is a “Value-Based Payment” Model? Value-Based Payment: A payment model which rewards healthcare providers for meeting certain predetermined performance measures related to quality and efficiency Efficiency: The state or quality of achieving maximum productivity with minimum wasted effort or expense.Quality: The standard of something as measured against other things of a similar kind; the degree of excellence of something: “quality of life;” also the general excellence of standard or level. Value: The regard that something is held to deserve; the importance or preciousness of something: “Your support is of great value.”
    13. 13. Page 12April 25, 2013 Florida Institute of Certified Public Accountants Value: The Answer to FFS? VBP: Value-Based Purchasing CMS reimbursement model shifting away from paying providers based only on volume of services provided Creates incentives to encourage healthcare providers to render high quality care and lower total costs Goal is to foster joint clinical and financial accountability
    14. 14. Page 13April 25, 2013 Florida Institute of Certified Public Accountants HVBP: Hospital Value-Based Purchasing CMS initiative that adjusts acute-care hospitals‟ payments for the quality of care that they provide to Medicare beneficiaries – quality over volume! Hospitals‟ payments adjusted for how closely they follow best clinical practices and how well the hospital enhances the patients‟ experiences of care When hospitals follow proven best practices, patients receive higher quality care and see better outcomes. Value: HVBP “Several industries have transformed themselves with human errors in mind. The airline industry is a favorite example. As a result of air craft design, regulation, the use of checklists, and other systems designs, we are almost guaranteed to reach our final destination safely. According to data collected between 2000 and 2005, the chances of a fatality on a US airline flight was one in 22.8 million.” – IHI Open School, Not Just Great Ideas: The Surgical Safety Checklist and the ICU Walker.
    15. 15. Page 14April 25, 2013 Florida Institute of Certified Public Accountants • Participating hospitals began receiving payments/penalties for quality of care October 1, 2012, the start of FY2013. The incentive payments are based on a hospital‟s performance during the period from July 1, 2011 to March 31, 2012. • HVBP is based on data collected through the Hospital Inpatient Quality Reporting (IQR) Program. – CMS has adopted 13 of 45 quality measures tracked in the IQR for FY2013. Value: HVBP
    16. 16. Page 15April 25, 2013 Florida Institute of Certified Public Accountants HVBP • Penalties for high readmission rates – FY12-14 for AMI, heart failure, and pneumonia; expand list in FY15 – Reduce overall inpatient payment by 1%-3% • Rewards and penalties based on quality measures and patient satisfaction scores – Begins in FY13, but based on earlier performance • Penalties for Hospital Acquired Conditions (HACs)/Never Events – In FY15, top 25% in HACs will have payments reduced by 1%
    17. 17. Page 16April 25, 2013 Florida Institute of Certified Public Accountants Value: PVBP PVBP: Physician Value-Based Purchasing • Physician feedback program – Individual reports on resource use and quality of care as compared to peer group • Physician value-based payment modifier – Phased in between 2015 and 2017 – 2013 performance determines 2015 modifier – Budget neutral – wRVU x conversion factor x VBPM • Positive number = paid more • Negative number = paid less
    18. 18. Page 17April 25, 2013 Florida Institute of Certified Public Accountants • PQI: Physician Quality Incentives – PQRS: Physician Quality Reporting System • When created in 2007, initially named the Physician Quality Reporting Initiative (PQRI) and included 74 clinical quality measures for physicians to report via claims data • Today, PQRS has over 203 quality measures available for reporting, including both clinical and structural, that can be reported through claims or accepted registries • Paid for reporting (pay-for-reporting or P4R), not attaining certain scores (pay-for-performance or P4P) PQI, PQRS, P4R, and P4P!
    19. 19. Page 18April 25, 2013 Florida Institute of Certified Public Accountants Physician Quality Reporting System (PQRS) • Today - 203 quality measures available for reporting • Paid for reporting (pay-for-reporting or P4R), not attaining certain scores (pay-for- performance or P4P) • Carrots followed by sticks – 0.5% bonus for 2012-2014 – 1.5% penalty for 2015 – 2.0% penalty for 2016 and thereafter
    20. 20. Page 19April 25, 2013 Florida Institute of Certified Public Accountants Other Forms of PQI Meaningful Use Incentives/Penalties - Stage One objectives and clinical quality measures - 1% penalty in 2015 if not MU in 2014; 2% in 2016; 3% in 2017; 4% in 2018 or 2019 Electronic Prescription Incentive Program - 1.0% bonus in 2011(unless received EHR bonus) - 1.0% penalty in 2012 unless used eRx 10x by 06/30/11 - 1.5% penalty in 2013 unless used eRx 25x by 12/31/11 MU eRx
    21. 21. Page 20April 25, 2013 Florida Institute of Certified Public Accountants To Achieve Value, Moving Toward Integration and Alignment More IntegrationLess Integration More Common Less Common Equipment JV Clinical Co- Management Medical Directorships ACO Real Estate JV Medical Home Models PHO/ Narrow NetworkBundled Payments Professional Services Agreement Physician Employment
    22. 22. Page 21April 25, 2013 Florida Institute of Certified Public Accountants Clinical Integration (CI): The Basics The extent to which healthcare services are coordinated across providers, functions, activities, processes, and operating units so as to maximize the value of services delivered Includes both horizontal integration (coordination of activities at the same stage of delivery of care) as well as vertical integration (the coordination of services at different stages)
    23. 23. Page 22April 25, 2013 Florida Institute of Certified Public Accountants PCMH PCMH: Patient-Centered Medical Home • Improves primary care through patient- centered care, cooperation among physicians, and coordination and tracking care over time • Facilitates partnerships among patients, their physicians and the patient‟s family members • Care is facilitated by registries, health information technology (HIT), health information exchange (HIE), etc. to ensure that patients receive the appropriate care at the appropriate time in the appropriate manner Patient-Centered Medical Home Primary Care Physician + Coordinated Care + $ for Coordinated Care
    24. 24. Page 23April 25, 2013 Florida Institute of Certified Public Accountants IPA: Independent Practice Association • Association of medical doctors (primary care physicians and specialists) and other healthcare professionals that have contracted with most PPO, POS, and HMO insurance plans IPA Specialist Physician Physician Primary Care Physician
    25. 25. Page 24April 25, 2013 Florida Institute of Certified Public Accountants PHO Primary Care Physician Specialist Physician PHO: Physician Hospital Organization • Joint venture between hospital(s) and physician group(s) • Acts as a single agent for managed care contracting • Aligns interests of hospitals and physicians but allows each to retain autonomy • Opportunity to act as a vehicle to advance clinical integration network initiatives Physician
    26. 26. Page 25April 25, 2013 Florida Institute of Certified Public Accountants CIN CIN: Clinically Integrated Network A network of physicians working in collaboration with a hospital, using a performance management infrastructure to develop and implement initiatives to improve the quality and efficiency of healthcare services Network negotiates and contracts with payers for improved reimbursement based on quality and efficiency
    27. 27. Page 26April 25, 2013 Florida Institute of Certified Public Accountants What Does a CIN Do? Coordinates continuum of care across affiliated caregivers Implements evidence-based clinical protocols Establishes related quality measures and performance standards Evaluates individual performance and implements improvement plans Partners with payers to develop contracts that drive definable clinical improvement and efficiencies
    28. 28. Page 27April 25, 2013 Florida Institute of Certified Public Accountants Clinical Integration: the Road from FFS to ACO FFS P4P, Bundled Payment Partial/Global Capitation Payers Providers Hospitals Payers CIN (P4P) ACO
    29. 29. Page 28April 25, 2013 Florida Institute of Certified Public Accountants ACO: Accountable Care Organization • Network of physicians and hospitals sharing responsibility for providing care to patients • Agree to manage all of the healthcare needs of at least 5,000 Medicare beneficiaries for a minimum of three years “Think of it as buying a television. A TV manufacturer like Sony may contract with many suppliers to build sets. Like Sony does for TVs, an ACO would bring together the different component parts of care for the patient – primary care, specialists, hospitals, home health care, etc. – and ensure that all of the „parts work well together.‟ The problem today is that patients are getting each part of their health care separately. People want to buy individual circuit boards, not a whole TV. If we can show them that the TV works better, maybe they'll buy it, rather than assembling a patchwork of services themselves.” – Harold Miller, president and CEO of the Network for Regional Healthcare Improvement ACO
    30. 30. Page 29April 25, 2013 Florida Institute of Certified Public Accountants MSSP MSSP: Medicare Shared Savings Program Pursuant to PPACA, the Secretary was directed to implement the Medicare Shared Savings Program (MSSP) by January 1, 2012 Financial incentive for aligned providers to implement specific integration model
    31. 31. Page 30April 25, 2013 Florida Institute of Certified Public Accountants MSSP ACO • Clinically integrated networks that have contracted with CMS to share in whatever money the community saves – To be eligible for shared savings, must meet minimum performance standards for 33 ACO quality measures – How do we know if they have “saved?” CMS reviews the historic costs of the patients in the network and uses that as the baseline to determine savings.
    32. 32. Page 31April 25, 2013 Florida Institute of Certified Public Accountants MSSP ACO Functions What Really Matters Establish and maintain quality assurance and improvement program. Promote evidence-based medicine, patient engagement, care coordination, patient- centeredness. Compile and report participants‟ quality measure scores. Distribute shared savings and assess shared losses.
    33. 33. Page 32April 25, 2013 Florida Institute of Certified Public Accountants Each ACO participant continues to bill fee-for-service independently Eligibility for and level of shared savings based on performance score Calculate actual annual Medicare spent for assigned beneficiaries against pre-determined benchmark Apply formula to determine share of savings (losses) Calculating Shared Savings/Losses
    34. 34. Page 33April 25, 2013 Florida Institute of Certified Public Accountants Episode 1: Hip Replacement • Orthopedic Surgeon • Surgery o Anesthesia o Pathology • Acute Care • Rehabilitation o PT BPP BPP: Bundled Payment Program • A single “bundled” payment covers the entire range of services that are rendered during a single episode of care or over a specified time period and are delivered by two or more healthcare providers • Example: Martha‟s hip replacement - payment - payment - payment - payment Develops rash – dermatology consult - payment payment - payment - payment
    35. 35. Page 34April 25, 2013 Florida Institute of Certified Public Accountants Success in Bundling for Episodes of Care Successful bundling for episode of care Decrease Costs • Financial/Gain- sharing Model Create Efficiencies • Re-design Care Model Improve Care • Quality Focus
    36. 36. Page 35April 25, 2013 Florida Institute of Certified Public Accountants Bundle Up! Bundled Payments are Coming Based on Medicare ACE Demonstration Project – free range ACO Single payment for defined group of services within specified episode of care Pricing based on discount of payer’s historic total cost Gain-sharing incentives
    37. 37. Page 36April 25, 2013 Florida Institute of Certified Public Accountants Questions?
    38. 38. Page 37April 25, 2013 Florida Institute of Certified Public Accountants Terms ACO Accountable Care Organization BPP Bundled Payment Program CIN Clinical Integrated Network eRx Electronic Prescription FFS Fee-for-Service HACs Hospital Acquired Conditions HIE Health Information Exchange HIT Health Information Technology HVBP Hospital Value-Based Purchasing IPA Independent Practice Association IQR Inpatient Quality Reporting MSSP Medicare Shared Savings Program MU Meaningful Use P4P Pay-for-Performance P4R Pay-for-Reporting PCMH Patient Centered Medical Home PHO Physician Hospital Organization PQI Physician Quality Incentives PQRS Patient Quality Reporting System PQRS Physician Quality Reporting System PVBP Physician Value-Based Purchasing VBP Value-Based Purchasing
    39. 39. Page 38April 25, 2013 Florida Institute of Certified Public Accountants Thank you! David McMillan Principal PYA dmcmillan@pyapc.com 865-673-0844

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