Massachusetts Bundled Payment Program (Presented by Katharine London)

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Massachusetts Bundled Payment Program (Presented by Katharine London)

  1. 1. Alternative Payment Opportunity Case Study: Massachusetts Children’s High-risk Asthma Bundled Payment Pilot Katharine London Center for Health Law and Economics June 13, 2013
  2. 2. Overview • What are alternative payment methods? • How can alternative payment methods support preventive care? • Case Study: Massachusetts Children’s High-risk Asthma Bundled Payment (CHABP) demonstration June 13, 2013 2
  3. 3. WHAT ARE ALTERNATIVE PAYMENT METHODS? June 13, 2013 3
  4. 4. Relevant ACA Provisions S.2704: Demonstration project to evaluate integrated care around hospitalization. Bundled payments for hospitals and physicians under Medicaid. S.3023: National pilot program on payment bundling. Bundled payment models under Medicare. S.2706: Pediatric Accountable Care Organization demonstration project. ACOs that meet quality targets and reduce costs share savings with the Medicaid program. S.3022: Medicare Shared Savings Program. ACOs that meet quality targets and reduce costs share savings with the Medicare program. June 13, 2013 4
  5. 5. What are Accountable Care Organizations (ACOs)? CMS definition: “Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients. “The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.” Examples: • Medicare Shared Savings Program • Advance Payment ACO Model • Pioneer ACO Model Source: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/aco/ June 13, 2013 5
  6. 6. Payment Methods • Fee-for-Service: A payment approach in which health care providers receive a separate fee for each service they deliver. (Traditional payment method) • Shared Savings: A payment approach whereby a provider or provider organization shares in the savings that accrue to a payer when actual spending for a defined population is less than a target amount. (Example: Medicare demonstration) Source: Adapted from “Payment Reform: Bundled Episodes vs. Global Payments: A debate between Francois de Brantes and Robert Berenson.” Timely Analysis of Immediate Health Policy Issues, September 2012. June 13, 2013 6
  7. 7. Payment Methods • Bundled Payment: A single payment to cover the cost of services delivered by multiple providers over a defined period of time to treat a given episode of care (e.g., a knee replacement surgery, or a year’s worth of diabetes care). (Example: MassHealth Primary Care Payment Reform Initiative) • Global Payment: A fixed-dollar payment (“capitation”) for the care that patients may receive in a given time period, such as a month or year. Global payments place providers at financial risk for both the occurrence of medical conditions as well as the management of those conditions. (Example: Blue Cross Blue Shield of MA Alternative Quality Contract) Source: Adapted from “Payment Reform: Bundled Episodes vs. Global Payments: A debate between Francois de Brantes and Robert Berenson.” Timely Analysis of Immediate Health Policy Issues, September 2012. June 13, 2013 7
  8. 8. Key Terms • Financial risk: Assuming liability for the financial loss that could occur if actual costs exceed expected costs. • Risk adjustment: A process of adjusting payments to providers to reflect patient characteristics, especially health status, age, sex, and other demographic characteristics. • Risk corridor: A provision that limits a provider’s financial losses or profits to a specified percentage above and below its break-even point, to prevent the provider from experiencing excessive profits or catastrophic losses. Source: Adapted from “Payment Reform: Bundled Episodes vs. Global Payments: A debate between Francois de Brantes and Robert Berenson.” Timely Analysis of Immediate Health Policy Issues, September 2012. June 13, 2013 8
  9. 9. HOW CAN ALTERNATIVE PAYMENT METHODS SUPPORT PREVENTIVE CARE? June 13, 2013 9
  10. 10. Opportunity Alternative payment methods: •Aim to reward providers for outcomes rather than volume of service provided •Give providers flexibility to provide care that best meets patients’ needs •Support preventive care that is cost-neutral or helps to contain total health care costs June 13, 2013 10
  11. 11. What is “cost-neutral”? Hypothetical example: Hospital discharge cost: Emergency visit cost: Preventive treatment: $6,000. $800. $60. $60 < $6,000. $60 < $800. Is that all you need to know? June 13, 2013 11
  12. 12. Example 1: Analysis Hospital discharge ED visit Total Number of patients 50 400 Cost each $6,000 $800 Savings if we prevent 60% Preventive treatment Total cost $300,000 $320,000 $620,000 ($372,000) 40,000 Net cost (savings) from intervention $60 $2,400,000 $2,028,000 June 13, 2013 12
  13. 13. Example 2: Analysis Hospital discharge ED visit Total Number of units 50 400 Cost each $6,000 $800 Savings if we prevent 50% Total cost $300,000 $320,000 $620,000 ($310,000) Preventive treatment 500 Net cost (savings) from intervention $600 $300,000 ($10,000) June 13, 2013 13
  14. 14. CASE STUDY: MASSACHUSETTS CHILDREN’S HIGH-RISK ASTHMA BUNDLED PAYMENT (CHABP) DEMONSTRATION June 13, 2013 14
  15. 15. Statutory Mandate – Key Provisions FY11 Budget outside section (St. 2010, C.131, S.154) • Provides for EOHHS to develop a global or bundled payment system for high-risk pediatric asthma patients enrolled in the MassHealth program • Goal is to prevent unnecessary hospital admissions and emergency room utilization. • The global or bundled payments are to reimburse expenses necessary to manage pediatric asthma, including, but not limited to, patient education, environmental assessments, mitigation of asthma triggers and purchase of necessary durable medical equipment. • The global or bundled payments shall be designed to ensure a financial return on investment through the reduction of costs related to hospital and emergency room visits and admissions June 13, 2013 15
  16. 16. Expenditure Authority • On December 20, 2011 CMS approved Massachusetts Medicaid’s request to extend its 1115 Demonstration Waiver through June 30, 2014 • Waiver allows MassHealth to make “Expenditures related to a pilot program … focused on pediatric asthma that will provide a payment such as a per member/per month (PMPM) payment to participating providers for asthma-related services.” • “The pilot may include multiple phases and may include nontraditional services, supplies, and community supports for environmental home mitigation associated with pediatric asthma.” • “The authority for this pilot program to receive FFP is not effective until CMS approval of the [required] protocols.” June 13, 2013 16
  17. 17. Goal and Objectives • Goal: To evaluate the degree to which a bundled payment and flexible use of funds enhances the effects of delivery system transformation, as demonstrated by improved health outcomes at the same or lower cost. • Objectives: • To develop a bundled payment system for MassHealth members to support a comprehensive chronic disease management approach to asthma; • To demonstrate whether a financial return on investment can be achieved through the reduction of costs related to hospital admissions and emergency department visits; • To help pediatric providers begin developing the skills and infrastructure that they will need to manage global payments; and • To help children and their families learn practical and actionable methods for managing asthma in the context of their lives and for optimally controlling asthma symptoms to minimize asthma’s impact on their health, well-being and quality of life. June 13, 2013 17
  18. 18. Patient Enrollment Criteria Patients must meet all criteria to be enrolled in the CHABP: 1. Age 2-18 at CHABP Enrollment 2. Current MassHealth Member enrolled in PCC Panel and Participating Practice site panel 3. Clinical diagnosis of Asthma 4. High-risk asthma: In 12 months prior to enrollment have at least one: a. Inpatient admission for asthma, b. Hospital observation stay for asthma, c. Hospital emergency department visit for asthma, or d. Oral systemic corticosteroid prescription for asthma 5. Poorly controlled asthma: Asthma Control Test (ACT) score of 19 or lower twice within a 2 month period in 12 months prior to enrollment June 13, 2013 18
  19. 19. Payment Bundled payment = $50.00 per member per month Adjusted in certain circumstances to avoid duplication June 13, 2013 19
  20. 20. Participating Practice Staffing A Participating Practice must designate: 1. Financial/Operational Project Leader 2. Clinical Project Leader 3. Health care professionals to participate in Interdisciplinary Care Team 4. Community Health Worker (CHW) 5. Clinical Supervisor for CHW 6. Care Coordinator: may be CHW, case manager or clinician 7. Licensed Clinician to provide clinical care management June 13, 2013 20
  21. 21. Clinical Services 1. Traditional MassHealth Covered Services • Practice must continue to provide all medically necessary MassHealthcovered services to assess, monitor & manage asthma • Continue to bill as usual (mostly fee for service) 1. Required Services • At least once per month, review all CHABP Enrollees to identify need for follow-up or review by Interdisciplinary Care Team • Make best effort to contact families at specified times to offer services 1. Optional Services • Practice shall prioritize use of CHABP funds to best meet CHABP Enrollees’ needs. Services may include, but are not limited to: • CHW home visits, environmental assessment, care coordination, additional family contacts and assistance • Environmental supplies to mitigate asthma: mattress & pillow covers, vacuum, HEPA filter, pest management supplies, etc. June 13, 2013 21
  22. 22. Reporting & Communications Participating Practices will: • Participate in monthly Learning Collaboratives • Submit Required Reports 1. Enrollment Report, monthly 2. Utilization Report, quarterly • Maintain record of home visits, telephone contacts, inoffice education, and supplies provided • Notify EOHHS of significant changes in the Practice • Participate in Evaluation activities, including pre- and postintervention interviews June 13, 2013 22
  23. 23. Current Status ■ MassHealth issued a Request for Responses (RFR) to procure pediatric practices to participate in the Pilot ■ Responses due June 7, 2013 ■ Goal is to enroll 100-200 high-risk pediatric asthma patients at 2-6 pediatric practice sites ■ Expect to generate savings by preventing expensive inpatient hospitalizations and emergency department visits ■ Positive return on investment expected within 3 years June 13, 2013 23
  24. 24. For more information Katharine London Principal Associate Center for Health Law and Economics University of Massachusetts Medical School katharine.london@umassmed.edu Detailed requirements for the Massachusetts Children’s High-risk Asthma Bundled Payment demonstration are available on the state procurement website, www.Comm-PASS.com, under “closed procurements.” Document number: 13LCEHSCHILDRENSHIGHRISKASTHMARFR June 13, 2013 24

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