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Speaker Firms and Organization:
Association of American Medical Colleges
Jessica Walradt, M.S.
Senior Payment Reform Specialist
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Presented By:
March 12, 2015
1
Partner Firms:
Pershing Yoakley & Associates, P.C.
Christopher Wilson
Senior Manager
Association of American
Medical Colleges
March 12, 2015
2
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Partner Firm:
March 12, 2015
6
As a professional corporation with 30 principals, PYA’s team of resources is more than 175 strong and continually growing. PYA’s people
have backgrounds and degrees in nursing, healthcare administration, public health, medicine, economics, finance, management, accounting,
tax, and law. Several have extensive prior experience with other healthcare-related organizations, and have specialized training in clinical
medicine, clinical coding, and regulatory matters.
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recruiting dedicated and experienced people from national consulting firms and healthcare organizations.
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This, combined with PYA’s unmatched knowledge of the strategies and operational goals being implemented today by healthcare providers
and businesses, makes it the firm of choice.
Partner Firm:
March 12, 2015
7
Association of American
Medical Colleges
Brief Speaker Bios:
Christopher Wilson
Chris Wilson, JD, MPH, works with healthcare organizations to address strategic issues in an evolving market. He uses his unique
combination of consulting and legal experience to design and implement clinical integration initiatives, public policy projects, mergers
and acquisitions, and governance strategies. Chris also provides advisory services in the area of healthcare information technology
and best practices in the delivery and measurement of evidence-based care for providers.
March 12, 2015
8
Jessica Walradt, M.S.
Jessica serves as the AAMC’s Alternative Payment team’s policy content lead. In this role, she supports academic medical centers’
involvement in the Bundled Payments for Care Improvement initiative using data and policy analyses to explain financial trends and
provide strategic advice regarding episode selection and risk mitigation. Jessica also utilizes the lessons from this work to inform
AAMC’s advocacy efforts.
Prior to this, Jessica spent two years as a Health Policy Analyst helping providers to navigate federal ACA regulations and complex
Medicare payment policy issues. She also completed graduate internships with the White House Office of Management and Budget’s
Health Division and Partners HealthCare’s Finance Department.
Jessica holds an M.S. in Health Policy and Management from the Harvard School of Public Health and a B.A. in Political Science from
the University of Richmond.
► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/bundled-payments-in-healthcare-the-next-generation-live-webcast/
A bundled payment is a single re-imbursement to a healthcare provider for all clinical services related to a single instance of medical care and away from fees-for-service.
Bundling of payments to healthcare providers will be used more frequently to reduce the cost of healthcare in the United States. Theoretically, bundled payment schemes will improve
the quality of care, reduce un-necessary care, and reduce variation in cost among payers. However, research results are varied. Pilot projects such as Prometheus have been slow to
develop because of the difficulty of agreeing upon which services can be bundled.
Provisions for bundled payments are included in both the Patient Protection and Affordable Care Act (PPACA) and the Affordable Health Care for America Act (AHCAA). The PPACA bill
established a national Medicare program in 2013. The AHCAA bill requires reform of Medicare payments for post-acute services, including the bundled payments.
Healthcare legal counsel face a number of legal and regulatory issues in structuring bundled and gain-sharing payment systems. The legal challenges arise from insurance, state laws,
provider relationships, and fair market value dis-agreements. In the past, these arrangements were found potentially to violate the Anti-Kickback statute and Civil Monetary Penalties
Act.
Our panel of skilled practitioners will review bundled payment schemes and discuss the advantages and disadvantages of the schemes. The panel will discuss operational and
regulatory concerns for healthcare providers, critical provision documentation, the effects of healthcare reform and other recent legislative, regulatory, and enforcement activities. Also
addressed is gain-sharing.
Key Topics include:
• Public and Private Bundled Payment Initiatives & Gain-sharing Arrangements
• Bundled Payments Programs and Current CMS initiatives
• Implementation and Operational Challenges
• Accountable Care Organizations (ACOs) and Bundled Payments
• Medicare Bundled Payments for Care Improvement (BPCI) Initiative
• Bundled Payment Transparency and Risk Arrangements
• Bundled Payment Documentation, Data Analysis, & Reporting
• Legal and Regulatory Compliance Issues
March 12, 2015
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Featured Speakers:
March 12, 2015
10
SEGMENT 1:
Christopher Wilson
Senior Manager
Pershing Yoakley & Associates, P.C.
SEGMENT 2:
Jessica Walradt, M.S.
Senior Payment Reform Specialist
Association of American Medical Colleges
Introduction
Chris Wilson, JD, MPH, works with healthcare organizations to address strategic issues in an evolving market. He uses his
unique combination of consulting and legal experience to design and implement clinical integration initiatives, public policy
projects, mergers and acquisitions, and governance strategies. Chris also provides advisory services in the area of
healthcare information technology and best practices in the delivery and measurement of evidence-based care for
providers.
March 12, 2015
11
SEGMENT 1:
Christopher Wilson
Senior Manager
Pershing Yoakley & Associates, P.C.
Agenda
• Basics of Bundled Payments
• Example Program:
Medicare Bundled Payment for Care Improvement Model 2
• Gainsharing Example
• Regularity Waiver Example
March 12, 2015
12
SEGMENT 1:
Christopher Wilson
Senior Manager
Pershing Yoakley & Associates, P.C.
Basics of Bundled Payments
March 12, 2015
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The Basics Bundled Payments
March 12, 2015
14
Admission Discharge End of “Episode”
30/60/90 days
post discharge
$
$
$
$
$
Total
Cost
of
Care
(TCC)
Post-
Acute /
Other
$ = Reimbursement (Not Internal Costs)
Basics of Retrospective Bundled Payments
March 12, 2015
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$
$
$
$
Historic
Episode TCC
Discounted
Episode TCC
Actual
Episode TCC w/
Net Savings
Actual
TCC w/
Net Loss
Discount
$ = Distributed to Providers $ = Repaid by Risk-bearing Entity
Public and Private Payer Activity
March 12, 2015
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Medicare Bundled Payment
Opportunities:
• Bundled Payments for Care
Improvement (BPCI) Program
• Physician on-ramp toward
alignment and value-based
purchasing
• 48 episodes available
• Claims data for population health
analytics
• Infrastructure to build commercial
contracts
• New outpatient pilot in
development
Commercial Payer / Large
Employer Opportunities:
• Vary by market, payer, and
employer-sponsor
• Favor cardiac, orthopedic,
and spine procedures
• Access to data for
population health
strategies
• Infrastructure to build
tiered or narrow networks
Primary Bundled Payment Opportunities
• Unnecessary/Avoidable Utilization
– Readmissions
– Post-Acute
– Ancillaries
• Lower Cost Care Setting
– SNF v. IRF; HHA v. SNF
– But “strike the right balance”
– Consider Provider-Based Billing Impact
• Internal Variable Costs
– e.g., supply chain, materials management
March 12, 2015
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Bundled Payment Hospital Economic ROI
March 12, 2015
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INVESTMENTS RETURN
• Price Discount
• Program Costs
• Foregone Revenue
Possibility
• Net Payment
Reconciliation Amount
• Internal Variable Cost
Reductions
• Hospital
Gainshare
• Spillover Effects
• E.g., reduced LOS
• Market Share Gains
Often Significant Non-Economic, Strategic Returns
High-Level Episode Selection Decision Guide (more to come)
March 12, 2015
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Economic
Opportunity
Strategic
Opportunity
Avoid
Cost / Benefit / Learn
Cost / Benefit / Learn
Strongly Consider
Economic
Strategic
Economic
Strategic
Economic
Strategic
Economic
Strategic
Engaging Physicians in Bundled Payments
• Establishing Trust Among Parties
• Creating a Business Case for Participation
– “Fair” Gainsharing Model
• Recognizing Unique Challenges of Engaging Physicians
• Identifying Physician Leadership
• Timing Discussions is Critical
March 12, 2015
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Example Program:
Medicare Bundled Payment for Care
Improvement Model 2
March 12, 2015
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Medicare Bundled Payments for Care Improvement (“BPCI”)
• First group of applicants were enrolled on January 31,
2013; went live Q4 2013
• Largest voluntary Medicare payment innovation program
• Payment arrangements include financial and performance
accountability for episodes of care
• Enables gainsharing among collaborating providers
March 12, 2015
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Model 2: Inpatient Stay + Post-discharge Services
• Episodes initiated through “anchor” DRGs
• Episodes include the inpatient stay in the acute care hospital and all services
during the episode
• Episodes end 30/60/90 days after hospital discharge
• Retrospective comparison of target price and actual FFS payments
– Baseline and Target Prices based on provider’s own payments and trended
forward by national trend factor
• Required Discount: 2-3% off historical TCC
• Eligible Beneficiaries: Medicare FFS as Primary insurer
– No End Stage Renal Disease (ESRD)
– No Medicare Advantage
March 12, 2015
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Model 2: Services (Costs) Included
March 12, 2015
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– Physician
– Inpatient hospital
– Inpatient hospital
readmission
– Long term care hospital
(LTCH)
– Inpatient Rehab Facility
(IRF)
– Skilled nursing facility
(SNF)
Home health agency (HHA)
– Hospital outpatient
– Independent outpatient
therapy
– Clinical lab
– Durable Medical
Equipment (DME)
– Part B Drugs
Model 2: Risk Tracks
• “Risk Tracks” for Each Episode Selected to Establish Risk
and Inclusion of Outliers
– Bear 100% of risk up to risk track threshold
– Bear 20% of payment above the threshold
• I.e., 20% of episode payments above the threshold are included in reconciliation
calculations
March 12, 2015
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Risk Track Upper %ile TCC Limit Suggested Focus Notes
A 99th Care Management
of High Cost Cases
Higher Target TCC,
Higher Discount
B 95th
C 75th Internal Cost
Savings
Lower Target TCC,
Lower Discount
Implementation Protocol Components
• General Information
• Care Redesign and Implementation Plan
– Model Plan
– Care Redesign Interventions
• Gainsharing
• Fraud and Abuse Waivers
• Beneficiary Incentives
• Payment Waivers
March 12, 2015
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Gainsharing Example
March 12, 2015
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What is BPCI Gainsharing?
Gainsharing is an arrangement among BPCI participants that allows the
awardee to distribute to physicians (or non-physician practitioners) a
share of the gains that result from collaborative efforts to improve quality
and efficiency.
March 12, 2015
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“Typical” Gainsharing Structure
March 12, 2015
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Physician Group B
Awardee
Agreement
Physician Group A
Individual Physician(s)
Participant
Agreement +
Gainsharing
Agreement
Gainsharing
Agreement
Gainsharing
Agreement
Awardee (e.g., health
system, hospital)
Sources of BPCI Gainsharing Payments
Gainsharing payments can come from:
• Internal cost savings (ICS)
• Episode reconciliation payments (NPRA)
March 12, 2015
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Gainsharing Pool Options
Can be by
episode, by
group of
episodes,
by service
line
BPCI Gainsharing Cap =
50% of Medicare Part B Payments
Gainsharing payments made to individual physicians during a calendar
year are capped at 50% of the total Medicare approved amounts under
the Physician Fee Schedule for services furnished by that physician to
the Awardee’s BPCI Model 2 beneficiaries during the portion of a calendar
year when the physician is identified on the Gainsharing List after
CMS has confirmed the physician’s eligibility to participate in gainsharing.
March 12, 2015
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BPCI Gainsharing - Design
The Awardee must show:
• How gainsharing supports care re-design
• Methodology—how shared, with whom, frequency
• No limitation of medically necessary care
• Transparent, auditable, voluntary
• Practitioners not required to participate
• Eligibility criteria based on quality standards
March 12, 2015
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BPCI Gainsharing - Quality
• Minimum quality standards must be maintained or improved
• Awardee must identify:
– Minimum quality thresholds
– Quality monitoring process
– Metrics for improving quality
• Criteria for eligibility/ineligibility
March 12, 2015
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Regulatory Waiver Example
March 12, 2015
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BPCI Model 2 BPCI Waivers
• Fraud and Abuse Waivers
– Savings Pool Contribution Waiver
– Incentive Payments Waiver
– Group Practice Gainsharing Waiver
– Patient Engagement In-Kind Incentive Waiver
• Medicare Payment Policy Waivers
--Three-day hospital stay (for SNF) waiver
--Post-Discharge Home Visit
--Telehealth Waiver
March 12, 2015
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Fraud and Abuse Waivers
Waive application of Stark (as applicable), Anti-Kickback, and Civil Monetary
Penalties laws for the following:
• Savings Pool Contribution Waiver
-Contributions by Episode Initiating Provider (EIP) of internal cost savings
to the BPCI Savings Pool
• Incentive Payments Waiver
-Payments distributed from the BPCI Savings Pool
• Gainsharing Payments Made by Gainsharer Group to Gainsharer Group
Practitioners
• Patient Engagement In-Kind Incentives
-In-kind incentives from Awardee, EIP, or Gainsharer to Beneficiaries
March 12, 2015
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Fraud and Abuse Waivers
Process/Implementation
• Specific conditions and documentation requirements must be satisfied to
obtain the benefit of each waiver
• If these requirements are met, and the BPCI Agreement does not provide
otherwise, then the waivers will apply
• Waiver period begins on the Effective Date of the BPCI Agreement and ends
on the earlier of: (1) termination date of the BPCI Agreement; (2) expiration of
the last Performance Year + 6 months, or (3) 6 years + 6 months from the
Effective Date of the BPCI Agreement.
March 12, 2015
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Medicare Payment Policy Waivers
SNF 3-Day Hospital Stay Waiver
Waiver
• Allows beneficiaries to be eligible for Part A SNF services within 30 days of a hospital
discharge without spending 3 days in the hospital.
Implementation
• Awardee submits list of SNF partners with Implementation Protocol
• Majority of listed SNFs must have rating of 3-star or better on Nursing Home Compare
for 7 of 12 months preceding Performance Year
• Beneficiaries are free to choose SNF
• Medicare will monitor for
-medically appropriate transfers
-majority of transfers prior to 3-day inpatient stay go to SNFs with 3 stars or better
March 12, 2015
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Medicare Payment Policy Waivers
Post-Discharge Home Visit Waiver
Waiver
• Permits general (rather than direct) supervision for certain in-home services
provided to Model 2 beneficiaries who do not qualify for home health services
-Services furnished in the beneficiary’s home
-After discharge from an Episode Initiator during an Episode of Care
-Services furnished by licensed clinical staff in accordance with all
other Medicare requirements, and appropriately billed
-Limited to once per 30 day Episode of Care (two per 60-day, three
per 90-day)
Implementation
• Self-implementing as long as requirements are met
March 12, 2015
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Medicare Payment Policy Waivers
Telehealth Waiver
Waiver
Medicare waives the geographic requirement for telehealth services. So, during
an Episode of Care, Model 2 Beneficiaries need not be located in a rural HPSA or
non-MSA county in order for Medicare payment to be made for telehealth.
Procedure
Self-implementing so long as all other telehealth billing requirements are met.
March 12, 2015
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March 12, 2015
41
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Introduction
Jessica serves as the AAMC’s Alternative Payment team’s policy content lead. In this role, she supports academic medical
centers’ involvement in the Bundled Payments for Care Improvement initiative using data and policy analyses to explain
financial trends and provide strategic advice regarding episode selection and risk mitigation. Jessica also utilizes the lessons
from this work to inform AAMC’s advocacy efforts.
Prior to this, Jessica spent two years as a Health Policy Analyst helping providers to navigate federal ACA regulations and
complex Medicare payment policy issues. She also completed graduate internships with the White House Office of
Management and Budget’s Health Division and Partners HealthCare’s Finance Department.
Jessica holds an M.S. in Health Policy and Management from the Harvard School of Public Health and a B.A. in Political
Science from the University of Richmond.
March 12, 2015
44
SEGMENT 2:
Jessica Walradt, M.S.
Senior Payment Reform Specialist
Association of American Medical Colleges
Strategic Episode Selection in a Bundled
Payment Model
Lessons from BPCI
March 12, 2015
45
SEGMENT 2:
Jessica Walradt, M.S.
Senior Payment Reform Specialist
Association of American Medical Colleges
AAMC as Facilitator Convener
March 12, 2015
46
 Advocacy
 Policy Analysis
 Project Management
 Data Analysis
Selecting Episodes
• Total of 48 optional episodes
• These episodes represent approximately 70% of all possible episodes by
Medicare volume and expenditures
• Participants must give careful consideration to:
• Which conditions to bundle
• The number of conditions to bundle (select from 1 to 48 episodes).
March 12, 2015
47
• Acute myocardial infarction
• AICD generator or lead
• Amputation
• Atherosclerosis
• Back & neck except spinal fusion
• Coronary artery bypass graft
• Cardiac arrhythmia
• Cardiac defibrillator
• Cardiac valve
• Cellulitis
• Cervical spinal fusion
• Chest pain
• Combined anterior posterior
spinal fusion
• Complex non-cervical spinal
fusion
• Congestive heart failure
• Chronic obstructive pulmonary
disease, bronchitis, asthma
• Diabetes
• Double joint replacement of the
lower extremity
• Esophagitis, gastroenteritis and
other digestive disorders
• Fractures of the femur and hip or
pelvis
• Gastrointestinal hemorrhage
• Gastrointestinal obstruction
• Hip & femur procedures except
major joint
• Lower extremity and humerus
procedure except hip, foot, femur
• Major bowel procedure
• Major cardiovascular procedure
• Major joint replacement of the
lower extremity
• Major joint replacement of the
upper extremity
• Medical non-infectious orthopedic
• Medical peripheral vascular
disorders
• Nutritional and metabolic
disorders
• Other knee procedures
• Other respiratory
• Other vascular surgery
• Pacemaker
• Pacemaker device replacement
or revision
• Percutaneous coronary
intervention
• Red blood cell disorders
• Removal of orthopedic devices
• Renal failure
• Revision of the hip or knee
• Sepsis
• Simple pneumonia and
respiratory infections
• Spinal fusion (non-cervical)
• Stroke
• Syncope & collapse
• Transient ischemia
• Urinary tract infection
CMMI BPCI Participants May Choose from 48 Episodes
March 12, 2015
48
Selecting Episodes: Optimal Criteria for Episode Selection
Is there adequate condition prevalence, with sample size sufficient to both predict costs and show
the effect of clinical interventions?
• What is the prevalence of the disease condition and volume of cases under consideration?
Is there significant resource consumption because of high expense on a per-episode basis or
because of high case volume?
• What is your market comparison for cost, both for the index stay and the post-discharge period?
Do clear, evidence-based care guidelines exist across the continuum?
• Are evidence-based clinical protocols available for the condition across multiple care settings?
• Are there clinical champions to drive care redesign?
Is there adequate variation in Medicare payment to allow for efficiency gains, but not so much
variation that the risk of outlier cases outweighs the reward?
 Evaluate outlier exposure in each clinical condition under consideration by reviewing the maximum
episode case cost at discrete intervals (e.g., 30, 60, and 90 days) post discharge
How do the episodes vary by site of service, utilization pattern, readmission rates, and first post-
discharge setting?
March 12, 2015
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AAMC Participant Episodes at Risk
March 12, 2015
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Major Joints PCI
Cervical
Spinal Fusion
CABG CHF Stroke
Cardiac
Valves
COPD
How Many Episodes?
March 12, 2015
51
Adequate Volume
March 12, 2015
52
Episode Family Annual Volume
Simple pneumonia and respiratory infections 439
Congestive heart failure 377
Major joint replacement of the lower extremity 350
Cardiac arrhythmia 305
Stroke 271
Chronic obstructive pulmonary disease, bronchitis, asthma 263
Urinary tract infection 238
Renal failure 206
Sepsis 197
Medical non-infectious orthopedic 167
Nutritional and metabolic disorders 164
Other respiratory 155
Cellulitis 154
Hip & femur procedures except major joint 123
Percutaneous coronary intervention 117
Major bowel procedure 105
Red blood cell disorders 98
Syncope & collapse 94
Medical peripheral vascular disorders 92
Pacemaker 75
Diabetes 73
Acute myocardial infarction 66
> 100/year
PCI Annual Volume = 450 Episodes
March 12, 2015
53
2013 CV: 0.71
PCI Annual Volume = 115 Episodes
March 12, 2015
54
2013 CV: 0.85
Examine Payment Trends
March 12, 2015
55
What is Driving the Trend?
March 12, 2015
56
What are the cost drivers?
March 12, 2015
57
What are the Cost Drivers?
March 12, 2015
58
Readmissions
• Readmission rate relative to regional, industry, and
national benchmarks
• Examine readmission DRGs
• Can you impact these readmits?
• % of readmissions returning to index hospital
March 12, 2015
59
Overarching Selection Strategies
Strategy 1: Start with surgical bundles.
• Examples:
• Major joint replacement of the lower extremity
• CABG
Strategy 2: Bundle clinically similar episode bundles.
• Examples:
• CHF and cardiac surgical procedures
• COPD and Simple Pneumonia
• Sepsis and UTI
March 12, 2015
60
Other Considerations
• Alignment with other strategic initiatives
• Medicare HRRP
• Physician champion
• Feasibility of gainsharing
• Precedence
March 12, 2015
61
Impact of Precedence on Volume
BPCI precedence rules ensure that a patient is only in one episode at a time.
Precedence rules involve the following factors:
• When the Awardee enters the risk phase;
• Type of Model (Model 2 vs. Model 3);
• Episode exclusions; and
• Awardee type (hospital vs. PGP).
March 12, 2015
62
Patient X
admitted for
MS-DRG Y to
Hospital B
Precedence Rule: Episodes initiated by Phase 2 Awardees
with earlier go-live dates trump episodes initiated by
Awardees with later go-live dates.
March 12, 2015
63
*CE- PoP = Clinical Episode Period of Precedence
Hospital A
Model 2 Patient X
discharged
Hospital B
Model 2
Model 2 BPCI
bundle triggered
by MS-DRG Z
admission of
patient X.
Hospital A entered Phase 2 prior to Hospital B
(e.g. Hospital A CE-PoP* = 1/1/14 while Hospital
B CE-PoP = 1/1/15)
Hospital A
retains
episode.
This happens
regardless of
whether or
not MS-DRG
Y is included
or excluded in
the MS-DRG
Z episode.
Precedence Rule: Within a given model, PGP episode
initiators trump non-PGPs.
March 12, 2015
64
Hospital
A
Model 2
Patient X receives
joint replacement at
Hospital A.
Physician in Model 2
PGP B performs the
procedure.
Do Hospital A and
PGP B have the
same CE-PoP?
YES
NO
PGP B claims
episode.
Does Hospital A
have the earlier
CE-PoP?
YES
NO
PGP B claims
episode.
Hospital
A
Model 2
Hospital A claims the
episode.
Episode Duration 30, 60 or 90 days post-discharge
March 12, 2015
65
Major Joint Replacement
Episode Duration
March 12, 2015
66
CHF
Risk Track Selection
• Winsorization and the application of risk corridors are used to mitigate the
financial risk associated with high cost outlier cases.
• Participants must choose one of three episode-specific risk tracks:
• Awardees are responsible for 20% of payments that fall above the risk track
threshold.
March 12, 2015
67
Example: Winsorization and Risk Corridors
Target Price: $50,000
Risk Track: B
5th Percentile: $15,000
95th Percentile: $75,000
March 12, 2015
68
Episode Payments Winsorized Amount Reconciliation
$10,000 $14,000 +$36,000
$54, 000 $54,000 -$4,000
$47,000 $47,000 +$3,000
$100,000 $80,000 -$30,000
Total +$15,000
What’s Next?
• HHS announcement: Drive towards value-based reimbursement
• Oncology bundles
• Capitation
March 12, 2015
69
Continuum of Risk-Based Payment Models
March 12, 2015
70
Bundled payments are one strategy in the progression from fee-for-
service to global capitation. Bundled payments encourage efficiency
and coordinated care.
Provider Risk
Payer
Savings
High
Low
HighLow
Fee-for-Service
Pay for Performance
Bundled
Payments
Shared Savings
Program (ACOs)
Capitation
► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type
your question in the box that appears and click send.
► Questions will be answered in the order they are received.
Q&A:
March 12, 2015
71
SEGMENT 1:
Christopher Wilson
Senior Manager
Pershing Yoakley & Associates, P.C.
cwilson@pyapc.com
(913) 232-5145
SEGMENT 2:
Jessica Walradt, M.S.
Senior Payment Reform Specialist
Association of American Medical Colleges
jwalradt@aamc.org
(202) 862-6067
March 12, 2015
72
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Bundled Payments in Healthcare – The Next Generation LIVE Webcast

  • 1. Speaker Firms and Organization: Association of American Medical Colleges Jessica Walradt, M.S. Senior Payment Reform Specialist Thank you for logging into today’s event. Please note we are in standby mode. All Microphones will be muted until the event starts. We will be back with speaker instructions @ 9:55am. Any Questions? Please email: Info@knowledgecongress.org Group Registration Policy Please note ALL participants must be registered or they will not be able to access the event. If you have more than one person from your company attending, you must fill out the group registration form. We reserve the right to disconnect any unauthorized users from this event and to deny violators admission to future events. To obtain a group registration please send a note to info@knowledgecongress.org or call 646.202.9344. Presented By: March 12, 2015 1 Partner Firms: Pershing Yoakley & Associates, P.C. Christopher Wilson Senior Manager Association of American Medical Colleges
  • 2. March 12, 2015 2  Follow us on Twitter, that’s @Know_Group to receive updates for this event as well as other news and pertinent info.  If you experience any technical difficulties during today’s WebEx session, please contact our Technical Support @ 866-779-3239.  You may ask a question at anytime throughout the presentation today via the chat window on the lower right hand side of your screen. Questions will be aggregated and addressed during the Q&A segment.  Please note, this call is being recorded for playback purposes.  If anyone was unable to log in to the online webcast and needs to download a copy of the PowerPoint presentation for today’s event, please send an email to: info@knowledgecongress.org. If you’re already logged in to the online webcast, we will post a link to download the files shortly.  If you are listening on a laptop, you may need to use headphones as some laptops speakers are not sufficiently amplified enough to hear the presentations. If you do not have headphones and cannot hear the webcast send an email to info@knowledgecongress.org and we will send you the dial in phone number.
  • 3. March 12, 2015 3  About an hour or so after the event, you'll be sent a survey via email asking you for your feedback on your experience with this event today - it's designed to take less than two minutes to complete, and it helps us to understand how to wisely invest your time in future events. Your feedback is greatly appreciated. If you are applying for continuing education credit, completions of the surveys are mandatory as per your state boards and bars. 6 secret words (3 for each credit hour) will be given throughout the presentation. We will ask you to fill these words into the survey as proof of your attendance. Please stay tuned for the secret word.  Speakers, I will be giving out the secret words at randomly selected times. I may have to break into your presentation briefly to read the secret word. Pardon the interruption.
  • 4. March 12, 2015 4 Welcome to the Knowledge Group Unlimited Subscription Programs. We have Two Options Available for You: FREE UNLIMITED: This program is free of charge with no further costs or obligations. It includes:  Unlimited access to over 15,000 pages of course material from all Knowledge Group Webcasts.  Subscribers to this program can download any slides, white papers, or supplemental material covered during all live webcasts.  50% discount for purchase of all Live webcasts and downloaded recordings. PAID UNLIMITED: Our most comprehensive and cost-effective plan, for a one-time fee:  Access to all LIVE Webcasts (Normally $199 to $349 for each event without a subscription). Including: Bring-a-Friend – Invite a client or associate outside your firm to attend for FREE. Sign up for as many webcasts as you wish.  Access to all of Recorded/Archived Events & Course Material includes 1,500+ hours of audio material (Normally $299 for each event without a subscription).  Free Certificate of Attendance Processing (Normally $49 Per Course without a subscription).  Access to over 15,000 pages of course material from Knowledge Group Webcasts.  Ability to invite a guest of your choice to attend any live webcast Free of charge (Exclusive benefit only available for PAID UNLIMITED subscribers).  6 Month Subscription is $499 with No Additional Fees Other options are available.  Special Offer: Sign up today and add 2 of your colleagues to your plan for free Check the “Triple Play” box on the sign-up sheet contained in the link below. https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964
  • 5. March 12, 2015 5 Knowledge Group UNLIMITED PAID Subscription Programs Pricing: Individual Subscription Fees: (2 Options) Semi-Annual: $499 one-time fee for a 6 month subscription with unlimited access to all webcasts, recordings, and materials. Annual: $799 one-time fee for a 12 month unlimited subscription with unlimited access to all webcasts, recordings, and materials. Group plans are available. See the registration form for details. Best ways to sign up: 1. Fill out the sign up form attached to the post conference survey email. 2. Sign up online by clicking the link contained in the post conference survey email. 3. Click the link below or the one we just posted in the chat window to the right. https://gkc.memberclicks.net/index.php?option=com_mc&view=mc&mcid=form_157964 Questions: Send an email to: info@knowledgecongress.org with “Unlimited” in the subject.
  • 6. Partner Firm: March 12, 2015 6 As a professional corporation with 30 principals, PYA’s team of resources is more than 175 strong and continually growing. PYA’s people have backgrounds and degrees in nursing, healthcare administration, public health, medicine, economics, finance, management, accounting, tax, and law. Several have extensive prior experience with other healthcare-related organizations, and have specialized training in clinical medicine, clinical coding, and regulatory matters. Because of PYA’s focus on client service and the highly motivating environment in which it operates, PYA has been very successful in recruiting dedicated and experienced people from national consulting firms and healthcare organizations. Leveraging the diverse experience and expertise of its people allows PYA to gain a unique perspective on the industry and marketplace. PYA calls it “Vision Beyond the Numbers®.” It uses this perspective to develop tools and methodologies that help its clients identify opportunities and creative solutions where other consultants have only found problems. PYA values most the integrity and objectivity of its people. These values enable PYA to continuously deliver and maintain the quality of service that clients require. Additionally, PYA offers the following compelling reasons for selecting the firm: • PYA has built one of the largest dedicated healthcare consulting practices in the nation. • PYA utilizes experienced professionals to achieve superior results in a cost effective and timely manner. • PYA determines success not by completion of individual projects, but by the ultimate success of its clients. This, combined with PYA’s unmatched knowledge of the strategies and operational goals being implemented today by healthcare providers and businesses, makes it the firm of choice.
  • 7. Partner Firm: March 12, 2015 7 Association of American Medical Colleges
  • 8. Brief Speaker Bios: Christopher Wilson Chris Wilson, JD, MPH, works with healthcare organizations to address strategic issues in an evolving market. He uses his unique combination of consulting and legal experience to design and implement clinical integration initiatives, public policy projects, mergers and acquisitions, and governance strategies. Chris also provides advisory services in the area of healthcare information technology and best practices in the delivery and measurement of evidence-based care for providers. March 12, 2015 8 Jessica Walradt, M.S. Jessica serves as the AAMC’s Alternative Payment team’s policy content lead. In this role, she supports academic medical centers’ involvement in the Bundled Payments for Care Improvement initiative using data and policy analyses to explain financial trends and provide strategic advice regarding episode selection and risk mitigation. Jessica also utilizes the lessons from this work to inform AAMC’s advocacy efforts. Prior to this, Jessica spent two years as a Health Policy Analyst helping providers to navigate federal ACA regulations and complex Medicare payment policy issues. She also completed graduate internships with the White House Office of Management and Budget’s Health Division and Partners HealthCare’s Finance Department. Jessica holds an M.S. in Health Policy and Management from the Harvard School of Public Health and a B.A. in Political Science from the University of Richmond. ► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/bundled-payments-in-healthcare-the-next-generation-live-webcast/
  • 9. A bundled payment is a single re-imbursement to a healthcare provider for all clinical services related to a single instance of medical care and away from fees-for-service. Bundling of payments to healthcare providers will be used more frequently to reduce the cost of healthcare in the United States. Theoretically, bundled payment schemes will improve the quality of care, reduce un-necessary care, and reduce variation in cost among payers. However, research results are varied. Pilot projects such as Prometheus have been slow to develop because of the difficulty of agreeing upon which services can be bundled. Provisions for bundled payments are included in both the Patient Protection and Affordable Care Act (PPACA) and the Affordable Health Care for America Act (AHCAA). The PPACA bill established a national Medicare program in 2013. The AHCAA bill requires reform of Medicare payments for post-acute services, including the bundled payments. Healthcare legal counsel face a number of legal and regulatory issues in structuring bundled and gain-sharing payment systems. The legal challenges arise from insurance, state laws, provider relationships, and fair market value dis-agreements. In the past, these arrangements were found potentially to violate the Anti-Kickback statute and Civil Monetary Penalties Act. Our panel of skilled practitioners will review bundled payment schemes and discuss the advantages and disadvantages of the schemes. The panel will discuss operational and regulatory concerns for healthcare providers, critical provision documentation, the effects of healthcare reform and other recent legislative, regulatory, and enforcement activities. Also addressed is gain-sharing. Key Topics include: • Public and Private Bundled Payment Initiatives & Gain-sharing Arrangements • Bundled Payments Programs and Current CMS initiatives • Implementation and Operational Challenges • Accountable Care Organizations (ACOs) and Bundled Payments • Medicare Bundled Payments for Care Improvement (BPCI) Initiative • Bundled Payment Transparency and Risk Arrangements • Bundled Payment Documentation, Data Analysis, & Reporting • Legal and Regulatory Compliance Issues March 12, 2015 9
  • 10. Featured Speakers: March 12, 2015 10 SEGMENT 1: Christopher Wilson Senior Manager Pershing Yoakley & Associates, P.C. SEGMENT 2: Jessica Walradt, M.S. Senior Payment Reform Specialist Association of American Medical Colleges
  • 11. Introduction Chris Wilson, JD, MPH, works with healthcare organizations to address strategic issues in an evolving market. He uses his unique combination of consulting and legal experience to design and implement clinical integration initiatives, public policy projects, mergers and acquisitions, and governance strategies. Chris also provides advisory services in the area of healthcare information technology and best practices in the delivery and measurement of evidence-based care for providers. March 12, 2015 11 SEGMENT 1: Christopher Wilson Senior Manager Pershing Yoakley & Associates, P.C.
  • 12. Agenda • Basics of Bundled Payments • Example Program: Medicare Bundled Payment for Care Improvement Model 2 • Gainsharing Example • Regularity Waiver Example March 12, 2015 12 SEGMENT 1: Christopher Wilson Senior Manager Pershing Yoakley & Associates, P.C.
  • 13. Basics of Bundled Payments March 12, 2015 13
  • 14. The Basics Bundled Payments March 12, 2015 14 Admission Discharge End of “Episode” 30/60/90 days post discharge $ $ $ $ $ Total Cost of Care (TCC) Post- Acute / Other $ = Reimbursement (Not Internal Costs)
  • 15. Basics of Retrospective Bundled Payments March 12, 2015 15 $ $ $ $ Historic Episode TCC Discounted Episode TCC Actual Episode TCC w/ Net Savings Actual TCC w/ Net Loss Discount $ = Distributed to Providers $ = Repaid by Risk-bearing Entity
  • 16. Public and Private Payer Activity March 12, 2015 16 Medicare Bundled Payment Opportunities: • Bundled Payments for Care Improvement (BPCI) Program • Physician on-ramp toward alignment and value-based purchasing • 48 episodes available • Claims data for population health analytics • Infrastructure to build commercial contracts • New outpatient pilot in development Commercial Payer / Large Employer Opportunities: • Vary by market, payer, and employer-sponsor • Favor cardiac, orthopedic, and spine procedures • Access to data for population health strategies • Infrastructure to build tiered or narrow networks
  • 17. Primary Bundled Payment Opportunities • Unnecessary/Avoidable Utilization – Readmissions – Post-Acute – Ancillaries • Lower Cost Care Setting – SNF v. IRF; HHA v. SNF – But “strike the right balance” – Consider Provider-Based Billing Impact • Internal Variable Costs – e.g., supply chain, materials management March 12, 2015 17
  • 18. Bundled Payment Hospital Economic ROI March 12, 2015 18 INVESTMENTS RETURN • Price Discount • Program Costs • Foregone Revenue Possibility • Net Payment Reconciliation Amount • Internal Variable Cost Reductions • Hospital Gainshare • Spillover Effects • E.g., reduced LOS • Market Share Gains Often Significant Non-Economic, Strategic Returns
  • 19. High-Level Episode Selection Decision Guide (more to come) March 12, 2015 19 Economic Opportunity Strategic Opportunity Avoid Cost / Benefit / Learn Cost / Benefit / Learn Strongly Consider Economic Strategic Economic Strategic Economic Strategic Economic Strategic
  • 20. Engaging Physicians in Bundled Payments • Establishing Trust Among Parties • Creating a Business Case for Participation – “Fair” Gainsharing Model • Recognizing Unique Challenges of Engaging Physicians • Identifying Physician Leadership • Timing Discussions is Critical March 12, 2015 20
  • 21. Example Program: Medicare Bundled Payment for Care Improvement Model 2 March 12, 2015 21
  • 22. Medicare Bundled Payments for Care Improvement (“BPCI”) • First group of applicants were enrolled on January 31, 2013; went live Q4 2013 • Largest voluntary Medicare payment innovation program • Payment arrangements include financial and performance accountability for episodes of care • Enables gainsharing among collaborating providers March 12, 2015 22
  • 23. Model 2: Inpatient Stay + Post-discharge Services • Episodes initiated through “anchor” DRGs • Episodes include the inpatient stay in the acute care hospital and all services during the episode • Episodes end 30/60/90 days after hospital discharge • Retrospective comparison of target price and actual FFS payments – Baseline and Target Prices based on provider’s own payments and trended forward by national trend factor • Required Discount: 2-3% off historical TCC • Eligible Beneficiaries: Medicare FFS as Primary insurer – No End Stage Renal Disease (ESRD) – No Medicare Advantage March 12, 2015 23
  • 24. Model 2: Services (Costs) Included March 12, 2015 24 – Physician – Inpatient hospital – Inpatient hospital readmission – Long term care hospital (LTCH) – Inpatient Rehab Facility (IRF) – Skilled nursing facility (SNF) Home health agency (HHA) – Hospital outpatient – Independent outpatient therapy – Clinical lab – Durable Medical Equipment (DME) – Part B Drugs
  • 25. Model 2: Risk Tracks • “Risk Tracks” for Each Episode Selected to Establish Risk and Inclusion of Outliers – Bear 100% of risk up to risk track threshold – Bear 20% of payment above the threshold • I.e., 20% of episode payments above the threshold are included in reconciliation calculations March 12, 2015 25 Risk Track Upper %ile TCC Limit Suggested Focus Notes A 99th Care Management of High Cost Cases Higher Target TCC, Higher Discount B 95th C 75th Internal Cost Savings Lower Target TCC, Lower Discount
  • 26. Implementation Protocol Components • General Information • Care Redesign and Implementation Plan – Model Plan – Care Redesign Interventions • Gainsharing • Fraud and Abuse Waivers • Beneficiary Incentives • Payment Waivers March 12, 2015 26
  • 28. What is BPCI Gainsharing? Gainsharing is an arrangement among BPCI participants that allows the awardee to distribute to physicians (or non-physician practitioners) a share of the gains that result from collaborative efforts to improve quality and efficiency. March 12, 2015 28
  • 29. “Typical” Gainsharing Structure March 12, 2015 29 Physician Group B Awardee Agreement Physician Group A Individual Physician(s) Participant Agreement + Gainsharing Agreement Gainsharing Agreement Gainsharing Agreement Awardee (e.g., health system, hospital)
  • 30. Sources of BPCI Gainsharing Payments Gainsharing payments can come from: • Internal cost savings (ICS) • Episode reconciliation payments (NPRA) March 12, 2015 30 Gainsharing Pool Options Can be by episode, by group of episodes, by service line
  • 31. BPCI Gainsharing Cap = 50% of Medicare Part B Payments Gainsharing payments made to individual physicians during a calendar year are capped at 50% of the total Medicare approved amounts under the Physician Fee Schedule for services furnished by that physician to the Awardee’s BPCI Model 2 beneficiaries during the portion of a calendar year when the physician is identified on the Gainsharing List after CMS has confirmed the physician’s eligibility to participate in gainsharing. March 12, 2015 31
  • 32. BPCI Gainsharing - Design The Awardee must show: • How gainsharing supports care re-design • Methodology—how shared, with whom, frequency • No limitation of medically necessary care • Transparent, auditable, voluntary • Practitioners not required to participate • Eligibility criteria based on quality standards March 12, 2015 32
  • 33. BPCI Gainsharing - Quality • Minimum quality standards must be maintained or improved • Awardee must identify: – Minimum quality thresholds – Quality monitoring process – Metrics for improving quality • Criteria for eligibility/ineligibility March 12, 2015 33
  • 35. BPCI Model 2 BPCI Waivers • Fraud and Abuse Waivers – Savings Pool Contribution Waiver – Incentive Payments Waiver – Group Practice Gainsharing Waiver – Patient Engagement In-Kind Incentive Waiver • Medicare Payment Policy Waivers --Three-day hospital stay (for SNF) waiver --Post-Discharge Home Visit --Telehealth Waiver March 12, 2015 35
  • 36. Fraud and Abuse Waivers Waive application of Stark (as applicable), Anti-Kickback, and Civil Monetary Penalties laws for the following: • Savings Pool Contribution Waiver -Contributions by Episode Initiating Provider (EIP) of internal cost savings to the BPCI Savings Pool • Incentive Payments Waiver -Payments distributed from the BPCI Savings Pool • Gainsharing Payments Made by Gainsharer Group to Gainsharer Group Practitioners • Patient Engagement In-Kind Incentives -In-kind incentives from Awardee, EIP, or Gainsharer to Beneficiaries March 12, 2015 36
  • 37. Fraud and Abuse Waivers Process/Implementation • Specific conditions and documentation requirements must be satisfied to obtain the benefit of each waiver • If these requirements are met, and the BPCI Agreement does not provide otherwise, then the waivers will apply • Waiver period begins on the Effective Date of the BPCI Agreement and ends on the earlier of: (1) termination date of the BPCI Agreement; (2) expiration of the last Performance Year + 6 months, or (3) 6 years + 6 months from the Effective Date of the BPCI Agreement. March 12, 2015 37
  • 38. Medicare Payment Policy Waivers SNF 3-Day Hospital Stay Waiver Waiver • Allows beneficiaries to be eligible for Part A SNF services within 30 days of a hospital discharge without spending 3 days in the hospital. Implementation • Awardee submits list of SNF partners with Implementation Protocol • Majority of listed SNFs must have rating of 3-star or better on Nursing Home Compare for 7 of 12 months preceding Performance Year • Beneficiaries are free to choose SNF • Medicare will monitor for -medically appropriate transfers -majority of transfers prior to 3-day inpatient stay go to SNFs with 3 stars or better March 12, 2015 38
  • 39. Medicare Payment Policy Waivers Post-Discharge Home Visit Waiver Waiver • Permits general (rather than direct) supervision for certain in-home services provided to Model 2 beneficiaries who do not qualify for home health services -Services furnished in the beneficiary’s home -After discharge from an Episode Initiator during an Episode of Care -Services furnished by licensed clinical staff in accordance with all other Medicare requirements, and appropriately billed -Limited to once per 30 day Episode of Care (two per 60-day, three per 90-day) Implementation • Self-implementing as long as requirements are met March 12, 2015 39
  • 40. Medicare Payment Policy Waivers Telehealth Waiver Waiver Medicare waives the geographic requirement for telehealth services. So, during an Episode of Care, Model 2 Beneficiaries need not be located in a rural HPSA or non-MSA county in order for Medicare payment to be made for telehealth. Procedure Self-implementing so long as all other telehealth billing requirements are met. March 12, 2015 40
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  • 44. Introduction Jessica serves as the AAMC’s Alternative Payment team’s policy content lead. In this role, she supports academic medical centers’ involvement in the Bundled Payments for Care Improvement initiative using data and policy analyses to explain financial trends and provide strategic advice regarding episode selection and risk mitigation. Jessica also utilizes the lessons from this work to inform AAMC’s advocacy efforts. Prior to this, Jessica spent two years as a Health Policy Analyst helping providers to navigate federal ACA regulations and complex Medicare payment policy issues. She also completed graduate internships with the White House Office of Management and Budget’s Health Division and Partners HealthCare’s Finance Department. Jessica holds an M.S. in Health Policy and Management from the Harvard School of Public Health and a B.A. in Political Science from the University of Richmond. March 12, 2015 44 SEGMENT 2: Jessica Walradt, M.S. Senior Payment Reform Specialist Association of American Medical Colleges
  • 45. Strategic Episode Selection in a Bundled Payment Model Lessons from BPCI March 12, 2015 45 SEGMENT 2: Jessica Walradt, M.S. Senior Payment Reform Specialist Association of American Medical Colleges
  • 46. AAMC as Facilitator Convener March 12, 2015 46  Advocacy  Policy Analysis  Project Management  Data Analysis
  • 47. Selecting Episodes • Total of 48 optional episodes • These episodes represent approximately 70% of all possible episodes by Medicare volume and expenditures • Participants must give careful consideration to: • Which conditions to bundle • The number of conditions to bundle (select from 1 to 48 episodes). March 12, 2015 47
  • 48. • Acute myocardial infarction • AICD generator or lead • Amputation • Atherosclerosis • Back & neck except spinal fusion • Coronary artery bypass graft • Cardiac arrhythmia • Cardiac defibrillator • Cardiac valve • Cellulitis • Cervical spinal fusion • Chest pain • Combined anterior posterior spinal fusion • Complex non-cervical spinal fusion • Congestive heart failure • Chronic obstructive pulmonary disease, bronchitis, asthma • Diabetes • Double joint replacement of the lower extremity • Esophagitis, gastroenteritis and other digestive disorders • Fractures of the femur and hip or pelvis • Gastrointestinal hemorrhage • Gastrointestinal obstruction • Hip & femur procedures except major joint • Lower extremity and humerus procedure except hip, foot, femur • Major bowel procedure • Major cardiovascular procedure • Major joint replacement of the lower extremity • Major joint replacement of the upper extremity • Medical non-infectious orthopedic • Medical peripheral vascular disorders • Nutritional and metabolic disorders • Other knee procedures • Other respiratory • Other vascular surgery • Pacemaker • Pacemaker device replacement or revision • Percutaneous coronary intervention • Red blood cell disorders • Removal of orthopedic devices • Renal failure • Revision of the hip or knee • Sepsis • Simple pneumonia and respiratory infections • Spinal fusion (non-cervical) • Stroke • Syncope & collapse • Transient ischemia • Urinary tract infection CMMI BPCI Participants May Choose from 48 Episodes March 12, 2015 48
  • 49. Selecting Episodes: Optimal Criteria for Episode Selection Is there adequate condition prevalence, with sample size sufficient to both predict costs and show the effect of clinical interventions? • What is the prevalence of the disease condition and volume of cases under consideration? Is there significant resource consumption because of high expense on a per-episode basis or because of high case volume? • What is your market comparison for cost, both for the index stay and the post-discharge period? Do clear, evidence-based care guidelines exist across the continuum? • Are evidence-based clinical protocols available for the condition across multiple care settings? • Are there clinical champions to drive care redesign? Is there adequate variation in Medicare payment to allow for efficiency gains, but not so much variation that the risk of outlier cases outweighs the reward?  Evaluate outlier exposure in each clinical condition under consideration by reviewing the maximum episode case cost at discrete intervals (e.g., 30, 60, and 90 days) post discharge How do the episodes vary by site of service, utilization pattern, readmission rates, and first post- discharge setting? March 12, 2015 49
  • 50. AAMC Participant Episodes at Risk March 12, 2015 50 Major Joints PCI Cervical Spinal Fusion CABG CHF Stroke Cardiac Valves COPD
  • 52. Adequate Volume March 12, 2015 52 Episode Family Annual Volume Simple pneumonia and respiratory infections 439 Congestive heart failure 377 Major joint replacement of the lower extremity 350 Cardiac arrhythmia 305 Stroke 271 Chronic obstructive pulmonary disease, bronchitis, asthma 263 Urinary tract infection 238 Renal failure 206 Sepsis 197 Medical non-infectious orthopedic 167 Nutritional and metabolic disorders 164 Other respiratory 155 Cellulitis 154 Hip & femur procedures except major joint 123 Percutaneous coronary intervention 117 Major bowel procedure 105 Red blood cell disorders 98 Syncope & collapse 94 Medical peripheral vascular disorders 92 Pacemaker 75 Diabetes 73 Acute myocardial infarction 66 > 100/year
  • 53. PCI Annual Volume = 450 Episodes March 12, 2015 53 2013 CV: 0.71
  • 54. PCI Annual Volume = 115 Episodes March 12, 2015 54 2013 CV: 0.85
  • 56. What is Driving the Trend? March 12, 2015 56
  • 57. What are the cost drivers? March 12, 2015 57
  • 58. What are the Cost Drivers? March 12, 2015 58
  • 59. Readmissions • Readmission rate relative to regional, industry, and national benchmarks • Examine readmission DRGs • Can you impact these readmits? • % of readmissions returning to index hospital March 12, 2015 59
  • 60. Overarching Selection Strategies Strategy 1: Start with surgical bundles. • Examples: • Major joint replacement of the lower extremity • CABG Strategy 2: Bundle clinically similar episode bundles. • Examples: • CHF and cardiac surgical procedures • COPD and Simple Pneumonia • Sepsis and UTI March 12, 2015 60
  • 61. Other Considerations • Alignment with other strategic initiatives • Medicare HRRP • Physician champion • Feasibility of gainsharing • Precedence March 12, 2015 61
  • 62. Impact of Precedence on Volume BPCI precedence rules ensure that a patient is only in one episode at a time. Precedence rules involve the following factors: • When the Awardee enters the risk phase; • Type of Model (Model 2 vs. Model 3); • Episode exclusions; and • Awardee type (hospital vs. PGP). March 12, 2015 62
  • 63. Patient X admitted for MS-DRG Y to Hospital B Precedence Rule: Episodes initiated by Phase 2 Awardees with earlier go-live dates trump episodes initiated by Awardees with later go-live dates. March 12, 2015 63 *CE- PoP = Clinical Episode Period of Precedence Hospital A Model 2 Patient X discharged Hospital B Model 2 Model 2 BPCI bundle triggered by MS-DRG Z admission of patient X. Hospital A entered Phase 2 prior to Hospital B (e.g. Hospital A CE-PoP* = 1/1/14 while Hospital B CE-PoP = 1/1/15) Hospital A retains episode. This happens regardless of whether or not MS-DRG Y is included or excluded in the MS-DRG Z episode.
  • 64. Precedence Rule: Within a given model, PGP episode initiators trump non-PGPs. March 12, 2015 64 Hospital A Model 2 Patient X receives joint replacement at Hospital A. Physician in Model 2 PGP B performs the procedure. Do Hospital A and PGP B have the same CE-PoP? YES NO PGP B claims episode. Does Hospital A have the earlier CE-PoP? YES NO PGP B claims episode. Hospital A Model 2 Hospital A claims the episode.
  • 65. Episode Duration 30, 60 or 90 days post-discharge March 12, 2015 65 Major Joint Replacement
  • 67. Risk Track Selection • Winsorization and the application of risk corridors are used to mitigate the financial risk associated with high cost outlier cases. • Participants must choose one of three episode-specific risk tracks: • Awardees are responsible for 20% of payments that fall above the risk track threshold. March 12, 2015 67
  • 68. Example: Winsorization and Risk Corridors Target Price: $50,000 Risk Track: B 5th Percentile: $15,000 95th Percentile: $75,000 March 12, 2015 68 Episode Payments Winsorized Amount Reconciliation $10,000 $14,000 +$36,000 $54, 000 $54,000 -$4,000 $47,000 $47,000 +$3,000 $100,000 $80,000 -$30,000 Total +$15,000
  • 69. What’s Next? • HHS announcement: Drive towards value-based reimbursement • Oncology bundles • Capitation March 12, 2015 69
  • 70. Continuum of Risk-Based Payment Models March 12, 2015 70 Bundled payments are one strategy in the progression from fee-for- service to global capitation. Bundled payments encourage efficiency and coordinated care. Provider Risk Payer Savings High Low HighLow Fee-for-Service Pay for Performance Bundled Payments Shared Savings Program (ACOs) Capitation
  • 71. ► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type your question in the box that appears and click send. ► Questions will be answered in the order they are received. Q&A: March 12, 2015 71 SEGMENT 1: Christopher Wilson Senior Manager Pershing Yoakley & Associates, P.C. cwilson@pyapc.com (913) 232-5145 SEGMENT 2: Jessica Walradt, M.S. Senior Payment Reform Specialist Association of American Medical Colleges jwalradt@aamc.org (202) 862-6067
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  • 74. March 12, 2015 74 ABOUT THE KNOWLEDGE GROUP, LLC The Knowledge Group, LLC is an organization that produces live webcasts which examine regulatory changes and their impacts across a variety of industries. “We bring together the world's leading authorities and industry participants through informative two-hour webcasts to study the impact of changing regulations.” If you would like to be informed of other upcoming events, please click here. Disclaimer: The Knowledge Group, LLC is producing this event for information purposes only. We do not intend to provide or offer business advice. The contents of this event are based upon the opinions of our speakers. The Knowledge Group does not warrant their accuracy and completeness. The statements made by them are based on their independent opinions and does not necessarily reflect that of The Knowledge Group‘s views. In no event shall The Knowledge Group be liable to any person or business entity for any special, direct, indirect, punitive, incidental or consequential damages as a result of any information gathered from this webcast. Certain images and/or photos on this page are the copyrighted property of 123RF Limited, their Contributors or Licensed Partners and are being used with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited