• Save
Clinical Co-Management:  A Precursor to ACO Development
Upcoming SlideShare
Loading in...5
×
 

Clinical Co-Management: A Precursor to ACO Development

on

  • 1,643 views

 

Statistics

Views

Total Views
1,643
Views on SlideShare
1,639
Embed Views
4

Actions

Likes
1
Downloads
0
Comments
0

2 Embeds 4

http://www.linkedin.com 3
https://www.linkedin.com 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Clinical Co-Management:  A Precursor to ACO Development Clinical Co-Management: A Precursor to ACO Development Presentation Transcript

  • Clinical Co-Management: A Precursor toACO Development
    Presented by
    Murer Consultants, Inc.
    January 21, 2011 · 9:00 am – 3:30 pm
  • Speakers
    Lyndean L. Brick, J.D.
    Senior Vice President/Principal
    Murer Consultants, Inc.
    815-727-3355 · lbrick@murer.com
    Kyle A. Vasquez, J.D., LL.M.
    Senior Consultant
    Murer Consultants, Inc.
    815-727-3355 · kvasquez@murer.com
    2
    1/21/2011
    © Murer Consultants, Inc. 2011
  • ACO Stepping Stone
    If your organization is working towards an ACO model but is not fully prepared to make that leap, there is an effective model that your organization can use as a stepping stone
    Today, we will introduce you to clinical co-management
    3
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Clinical Co-Management Roadmap
    Why Collaborate with Physicians
    CCMA Nuts and Bolts
    CCMA Regulatory Guidelines
    High Level Steps to Develop a CCMA
    Frequently Asked Questions
    4
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Why Collaborate with physicians?
    5
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Why Collaborate with Physicians – Reimbursement Pressures
    Value-based purchasing is on the horizon = emphasis on quality over quantity (FY 2013)
    Reimbursement cuts for poorly performing providers
    Reimbursement increases for those providing high quality care
    Continued PFS reimbursement cuts = physicians will be much less likely to volunteer time; need to maximize practice revenue
    Integration, alignment, and engagement of physicians is a critical imperative for organizations seeking to create high-performing, future-ready organizations
    6
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Why Collaborate with Physicians – Reimbursement Pressures
    • Current reimbursement systems disincentivize effective collaboration
    Physician Fee for Service Payment = Incentive to maximize volume of services (each service = additional revenue)
    Hospital Prospective Payment = Incentive to maximize efficiency (each service provided to existing patient = revenue reduction
    7
    Physicians
    Hospitals
    Fee for Service
    Service Utilization
    Prospective Payment
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Why Collaborate with Physicians – Failure of Traditional Models
    Physicians are the gatekeepers and clinical experts, yet traditional physician integration models have historically failed to exploit this expertise
    Traditional models do not engage a sufficient # of physicians to make a “real” difference
    Traditional models lack a formal legal structure that brings most/all staff members together for a common purpose
    Traditional models do not provide incentives to a sufficient number of physicians that influence quality/efficiency
    8
    1/21/2011
    © Murer Consultants, Inc. 2011
  • 9
    Model Comparison
    Increased Physician Engagement   
    ACO
    1/21/2011
    © Murer Consultants, Inc. 2011
  • One Solution
    A clinical co-management agreement (CCMA) provides a legal structure to align the physicians’ / hospital’s interests (both economic and non-economic)
    CCMAs can financially incentivize physicians to be an active partner in the quality/efficiency/ satisfaction improvement process in specific areas of need
    CCMAs provide a fair market value payment to physicians who advance high quality and cost-efficient care
    CCMAs require very little startup funding
    10
    1/21/2011
    © Murer Consultants, Inc. 2011
  • One Solution
    Under a CCMA, physicians have greater day-to-day oversight
    For example, physicians may be more involved in policy drafting, budget preparation, human resources, etc.
    AND…CCMAs are effective in preparing hospitals and physicians for value-based reimbursement systems such as ACO’s, bundled payments, etc.
    11
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Ccma nuts and bolts
    12
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Sample CCMA Legal StructureJoint Venture Model
    13
    Class H Units
    Class P Units
    Class P Member
    Physicians and
    Physician Groups
    Class H Member
    Hospital Service Line
    Co-Management Company, LLC
    Base and Incentive Compensation
    Clinical Co-Management Duties
    Board of Managers
    Finance Comm.
    Quality Comm.
    Other Comm.
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Sample CCMA Legal StructurePhysician Ownership
    14
    Joint Operating Council
    Physician Investors
    Hospital Service Line
    Co-Management Company, LLC
    Base and Incentive Compensation
    Clinical Co-Management Duties
    Board of Managers
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA Legal Structure
    Generally, a separate company is formed to execute the CCMA with the hospital and to manage the service line or facility at issue
    Management company may be physician owned or a joint venture
    Via ownership share, hospital may be in the position to offer certain administrative support to the management company
    Entity typically an LLC
    15
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Defining a CCMA
    A CCMA can recognize and financially reward (through FMV incentive payments) physicians/physician groups for improving quality, efficiency, and satisfaction of a particular hospital service line or facility
    16
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Defining a CCMA
    Permissible purposes of CCMAs:
    (1) improve quality of care, including heightened accreditation (i.e. Centers of Excellence), and/or clinical pathways/protocols,
    (2) increase operating efficiencies,
    (3) increase patient/staff satisfaction, and/or
    (4) reduce unnecessary costs without reducing necessary medical services
    17
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Defining a CCMA
    Impermissible purposes of CCMAs:
    (1) increase referrals, retain referrals or promote goodwill of physicians or other referral sources,
    (2) cause change of payor mix of referring physicians, or
    (3) cause physicians to limit or deny medical services
    18
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Sample CCMA Service Lines
    19
    Whole Hospital
    Cardiology
    • Medical Cardiology
    • Interventional Cardio
    • CV Surgery
    • Cath Lab
    • Cardiac Rehab
    Post Acute
    • SNF
    • Rehab
    • LTACH
    • Home Health
    • Hospice
    Other Sub-Specialties
    • Orthopedics
    • Neurology
    • General Surgery
    • Colo-Rectal Surgery
    • Primary Care
    Ambulatory Surgery Center
    Oncology
    • Medical Oncology
    • Surgical Oncology
    • Radiation Oncology
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Common CCMA Financial Terms
    Compensation may include the following components that are payable to the management company:
    Base Fee: Hospital pays a fixed hourly base fee for the following:
    Operating Expenses (staff)
    Medical Directors
    Committee Members/Participation
    Other Miscellaneous Expenses
    Incentive Fee: Hospital pays a periodic (annual, semiannual) incentive bonus if the service line meets pre-defined performance targets (quality, satisfaction, efficiency, etc.)
    Typically, CCMA contract splits the total annual compensation 50/50, i.e. 50% base pay and 50% at-risk incentive pay
    Fair Market Value: ALL fees must be fixed, fair market value and meet other applicable regulatory requirements discussed below
    20
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA Compensation Introduction
    21
    Participating Physicians
    Prof. Fee Schedule Payments: Under a CCMA, physicians bill for and retain their professional fees. Physicians have access to additional revenue by providing CCMA management services = indirectly receive a portion of the hospital’s facility fee.
    CCMA Distributions: (1) Hourly- based distributions for documented time by individuals physicians + (2) per capita incentive fee distributions
    Distributions
    Time/Services
    Physicians provide administrative services to Hospital via the LLC
    MANAGEMENT COMPANY, LLC
    Medicare Reimbursement
    (Example)
    Administrative Services Agreement (billing, staff, etc.)
    Contract
    Base/Inc. Fees
    LLC executes a contract with Hospital to provide management services to a service line
    CCMA Payments: (1) Base Fee + (2) Incentive Compensation
    Inpatient / Outpatient Facility Fee and Bundled Payments: Hospitalreceives facility payments that represent the overhead expense
    Hospital Service Line
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Sample CCMA Budget
    22
    *Applied sample hourly rate of $200/hr. Hourly rate and time allocations subject to third-party, fair market value analysis. This is a sample illustration only, and can vary significantly based the services offered, the number of physicians involved, the particular specialties, etc. The approximate annual value reflects the total compensation available to the management company.
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Expansive List of CCMA Base Services
    Hospital and physicians can agree on a number of base services to include in the CCMA. The final list of services is dictated by the needs of the service line. Below is a very expansive list which is intended to show the various types of services that can be included in a CCMA.
    23
    • Development of Service Line
    • Development of New Business Lines
    • Develop / Implement Mkt Plan and Education
    • Medical Director Services (Jointly Agreed Upon by Physicians and Hospital)
    • Supervision of Program Director, if applicable
    • DirectDay-to-Day Management and / or Manager
    • Assistance with Budget Process
    • Assist with Financial / Operational / Strategic Business Planning
    • Community Relations and Education
    • Assist with Hiring and Human Resource Management
    • Staff Scheduling and Supervision
    • Human Resource Management
    • Committee Participation/Joint Operating Committee
    • Assist with Credentialing and Physician Staffing
    • Develop Clinical Protocols and Performance Standards
    • Draft and Maintain Department Policies
    • Assist in Quality Assurance / UR
    • Develop/Edit Operational Policies
    • Provide Standardized Documents / Forms
    • Develop Best Practices
    • Implement Programs to Reduce Adverse Effects
    • Prepare Service Line for 3rd Party Audits
    • Manage Expenses in Relation to Fluctuation of Revenue
    • Develop and Implement Patient Care Policies
    • Improve Productivity of Service Line
    • Obtain / Maintain Accreditation
    • Prepare Operational Statistics
    • Provide Staff Education
    • Medical and Service Liaison Line with Medical Staff, Administration, CaseManagement
    • Support/Direct Case Management
    • Patient, staff, and physician satisfaction surveys
    • Assist with Purchasing Supplies, Equipment and Decisions
    • Ongoing Assessment of Clinical Environment and Work Flow Processes
    • Call Coverage
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Incentive Compensation
    Permissible incentive compensation components:
    Achievement of quality goals
    Achievement of operational efficiency goals that do not result in reduction of care to patients
    Achievement of patient/staff satisfaction goals
    New program development
    Modified gainsharing (e.g. direct variable cost per case), but some additional risk involved
    24
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Sample CCMA Incentive Measures
    25
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Sample CCMA Incentive Measures
    26
    1/21/2011
    © Murer Consultants, Inc. 2011
  • More On Incentive Compensation
    Compensation must be targeted towards identified areas of need i.e. hospital must have a baseline
    Incentive measures can be based on improvement or on achievement of specified targets
    Incentive measures may be progressive or all-or-nothing
    Incentives should be objective, verifiable, supported by credible medical evidence, and individually tracked
    Independent, fair market value analysis required
    Parties may wish to use the services of an independent medical review organization (“IMRO”) to monitor compensation and compliance with objectives
    27
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Ccma regulatory Guidelines
    28
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Primary Regulatory Factors
    Physician Self-Referral Statute (Stark)
    No intent required
    Exceptions available (PSA/FMV)
    Anti-Kickback Statute/False Claims Act
    Intent-based
    No applicable safe harbor
    Analyzed under one-purpose test
    Civil Monetary Penalty (CMP) Statute
    Tax-Exemption/Bond Financing
    29
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    The following is a summary of important factors that should be present in CCMA agreements
    This list is based on a 2008 proposed Stark exception that addressed incentive payments/shared savings programs – the rule was never finalized, but it mirrored many previous advisory opinions and existing regs
    Failing to adhere to the following list does not equate to non-compliance. Providers and physicians should assess the desired level of risk and consult with legal counsel to make a final determination of the applicable factors
    30
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    Must meet typical Stark exception language:
    CCMA is set out in writing
    Signed by the parties
    Have a minimum term of one (1) year and a maximum of three (3) years
    Compensation is set in advance (percentage comp ok under Stark; issue under Anti-Kickback – analyzed under one purpose test)
    Compensation does not vary during the term of the agreement and is not determined in a manner that takes into account the volume or value of referrals
    31
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    Compensation must be at fair market value, and an independent appraisal is strongly recommended
    Incentive comp should not to exceed specific percentages identified in IRS Rev Proc 97-13 if tax-exempt bond-financed property involved; cost sharing incentive measures should not exceed 50% of total comp
    Quality/cost savings measures supported by objective, independent medical evidence indicating that the measures will not adversely impact patient care
    Quality measures must use objective methodology, be verifiable, be individually tracked and canbe derived from CMS’ Specifications Manual for National Hospital Quality Measures
    32
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    Quality measures reasonably related to patient population and hospital practice
    Performance measures clearly and separately identified
    Advisable to obtain an independent medical review prior to implementation and at least annually following implementation; review shouldgenerate a written report
    Participation shouldbe offered to all physicians on the medical staff that belong to the applicable specialty
    Per capita distributions to a pool of at least five (5) physicians
    Distributions supported by written documentation
    Physicians should be on medical staff for at least one (1) year prior to CCMA
    33
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    No limit on physicians’ discretion to make medically necessary/appropriate decisions for patients, including supplies or devices
    Notice given to patients
    Payment should notchange during term
    Payments mustnot reward change in case mix or increase in referrals
    Hospital should exercise ability to terminate agreement if there is a material change in acuity (cherry-picking issues)
    Payment for maintenance of performance questionable
    34
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    Should include protections against inappropriate reductions or limitations in patient care or services
    Physicians whose referral patterns significantly change in a manner beneficial to the hospital, due in any part to the rewards available, will be terminated from the arrangement
    Immediate corrective action if adverse impact on quality
    No length of stay incentives
    35
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Regulatory Guidelines
    If gainsharing / shared savings included in CCMA, agreement must also include the following:
    Transparency of cost savings and actions
    Payment to physicians based on all surgeries regardless of payer
    Same selection of materials/devices available under program
    Re-basing of baseline thresholds each year
    Case severity, ages, and payors of the subject patients monitored to ensure no significant changes from historical standard – physicians terminated from gainsharing agreement if significant change occurs
    Incentive comp should not exceed 50% of total comp
    Until further guidance is released, an Advisory Opinion might be considered if gainsharing components are included in a CCMA
    36
    1/21/2011
    © Murer Consultants, Inc. 2011
  • High level steps to develop a ccma
    37
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA Development Process
    Formation of a steering committee with hospital/medical staff representation
    Determination of scope of CCMA (service line, facility, DRGs, etc)
    Identification of areas need/baseline using hospital’s data
    Steering committee to develop quality, operational efficiency, and patient satisfaction metrics using historical baseline data
    Steering committee to develop list of base administrative duties
    38
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA Development Process
    Agree on duties, performance metrics, and compensation structure
    Obtain fair market value assessment of services and fees
    Engage services of an independent medical review organization (“IMRO”)
    Form management company
    Offer equity interests to all physicians in specialty at issue
    Execute CCMA
    Program roll-out
    39
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Frequently asked questions
    40
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA FAQ’s
    Who must be offered the opportunity to participate in the CCMA?
    According to CMS’s intent as previously expressed in the Stark exception, all medical staff members with privileges in the specialty or specialties at issue must be offered the opportunity to participate.
    Can the co-manager add physicians to the LLC during the contract period due to new staff members?
    No, participation should be limited to those who join when the contract is executed.
    If the non-participating physician’s services are needed and can be justified, co-manager may contract and pay the physician a fair market value consulting fee in order to recognize his/her expertise that is contributed to the co-management project.
    41
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA FAQ’s
    How do we ensure that participants contribute positively to quality, efficiency and satisfaction goals?
    Establish LLC entry requirements relative to licensure, initial capital contributions, minimum hours commitment, minimum individual quality monitoring/commitment to ensure that physicians consider effort necessary to join and remain in the co-management entity.
    Establish requirements that participants/owners must continue to meet in order to remain in LLC such as hours and quality requirements (i.e. must meet or exceed the average SCIP compliance scores of the entire group – if below average in two consecutive semiannual periods, physician may be removed)
    Base fee is a means to recognize individual time/efforts
    42
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA FAQ’s
    How are base and incentive payments distributed?
    Base Payment – Typical approach is physicians turn in time cards and hospital pays the LLC a fair market value hourly rate for the individual physician’s work (whether its committee participation, reviewing and revising policies, etc.). The LLC distributes the hourly payments accordingly.
    Incentive Fees – Hospital pays LLC a fair market value incentive payment based on attainment of certain pre-established goals. Must be distributed to physician owners on a per capita basis (Equal share to all owners – must have a minimum of five owners/participants)
    43
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA FAQ’s
    Can we continue to receive incentive payments for maintenance of performance (i.e. meet and stay at 100% compliance)?
    Some disagreement in this area. Conservative approach says no due to the language in the proposed Stark exception i.e. providers must always improve or payments will not be considered fair market value = Stark/Anti-Kickback risk; others consider payment for maintenance acceptable, particularly when maintaining performance above a national benchmark
    Important to select enough measures and set goals high enough that you will not easily reach all goals in year one
    44
    1/21/2011
    © Murer Consultants, Inc. 2011
  • CCMA FAQ’s
    Is the co-manager responsible for the performance of those physicians who choose not to join the co-management entity?
    Yes, performance measurement and metrics pertain to all physicians of the ENTIRE service line, regardless of whether they are owners in the management company
    Must use committees, individual meetings, procedures under medical staff bylaws, etc. to ensure that all other physicians are performing up to expectations
    45
    1/21/2011
    © Murer Consultants, Inc. 2011
  • What We Know Today
    Value-based purchasing is inevitable
    Reimbursement cuts will continue due to an attempt to reduce health care spending
    Hospitals, physicians, and other types of providers will need to collaborate in order to fit within future reimbursement models
    More covered lives will require providers and physicians to be more efficient than ever
    Hospitals and physicians will be required to share patient data and reduce the silos of health information
    1/21/2011
    © Murer Consultants, Inc. 2011
    46
  • What Can We Do To Prepare For Tomorrow
    Re-align relationships between physicians, hospitals, and other venues of care
    Develop internal incentive programs that focus on quality and efficient care delivery
    Develop formal legal structures and engage in quality/efficiency incentive programs with private payers
    Participate in government-sponsored demonstration projects that focus on alternative reimbursement structures
    1/21/2011
    © Murer Consultants, Inc. 2011
    47
  • What Can We Do To Prepare For Tomorrow
    Wecan provide both on-site and off-site training sessions to further discuss innovative alignment models, such as CCMAs
    We can facilitate the CCMA development process and provide sound consulting support that results in a trusting relationship between the hospital and participating physicians
    The Murer/Reinhart team of experts is available to address your health care consulting and legal needs
    1/21/2011
    © Murer Consultants, Inc. 2011
    48
  • Feel free to call us if you have any questions or concerns:
    Lyndean L. Brick, J.D.
    Senior Vice President/Principal
    Murer Consultants, Inc.
    815-727-3355 · lbrick@murer.com
    Kyle A. Vasquez, J.D., LL.M.
    Senior Consultant
    Murer Consultants, Inc.
    815-727-3355 · kvasquez@murer.com
    49
    1/21/2011
    © Murer Consultants, Inc. 2011
  • Clinical Co-Management: A Precursor to ACO Development
    Clinical Co-Management: A Precursor to ACO Development © 2011 was developed by Murer Consultants, Inc. All rights reserved. No part of this presentation may be reproduced in any form without the prior written consent of Murer Consultants, Inc.
    This presentation is intended to provide accurate and authoritative guidance on the subject matter covered, but does not constitute legal advice. If legal advice is required, please consult counsel prior to implementing a CCMA.
    1/21/2011
    © Murer Consultants, Inc. 2011
    50
  • THANK YOU
    51
    1/21/2011
    © Murer Consultants, Inc. 2011