Future of Physcian Payments


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Presentation for Central PA HFMA on July 25, 2013.

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  • Pittsburgh-based insurer Highmark Health Services is creating an accountable care network as the next step in an ambitious and nationally watched move into healthcare delivery. The Blue Cross and Blue Shield affiliate likened its model to an accountable care organization, rewarding physicians for efficient and effective patient-centric care and quality outcomes.   After a long and tumultuous courtship and regulatory vetting, Highmark acquired West Penn Allegheny Health System last year and has formed Allegheny Health Network to include West Penn along with several other provider acquisitions. This year Highmark acquired Jefferson Regional Medical Center in Jefferson Hills, Pa., and St. Vincent Health System in Erie, Pa. Physicians from six hospitals in the Allegheny Health Network—Allegheny General Hospital and Western Pennsylvania Hospital, both Pittsburgh; Allegheny Valley Hospital, Natrona Heights, Pa.; Canonsburg (Pa.) General Hospital; Forbes Regional Hospital, Monroeville, Pa.; and Jefferson Regional—will initially participate in the alliance, which will eventually include other Western Pennsylvania physicians and hospitals served by the insurer. St. Vincent, which already participates in a patient-centered medical home program, is likely to join the accountable care alliance next year. “We need to be paying for value and not just volume,” Mike Fiaschetti, president of health markets for Highmark Health Services, said in a release. “This collaborative arrangement will lead the transition to a modernized and more efficient delivery system that offers the opportunity to improve quality and achieve better health outcomes for patients and improve the patient experience.” The alliance includes about 500 primary-care physicians who will be evaluated on 28 quality and outcome measures. As it evolves, Highmark plans to add specialists, as well as expand it to the entire Highmark service area, which includes West Virginia and Delaware.
  • UnitedHealth Group Inc. (UNH) said it will more than double payments to physicians tied to quality and cost efficiency within five years, in the latest sign of transformation in the American medical system. UnitedHealth, the biggest U.S. insurer, said it expects to spend about $50 billion under accountable-care contracts by 2017, compared with $20 billion now. The programs already have slowed the increase in medical costs and reduced emergency-room visits by 17 percent. E/M shift to payments without face-to-face requirement
  • BAA If you have a BAA in place that meets the rules and everyone has complied, you don’t need a new BAA until 9/22/2014 If you get a new client, new BAA rules apply 9/13 If you get a new client now, you can use the old one until 9/13 and then tune it up
  •   The new MSSP organizations officially joined the program on Jan. 1, 2013. They comprise the third and largest round of additions to the Medicare ACO program, which launched in April 2012 with 27 organizations and added 89 organizations in July 2012, and join the 32 Pioneer ACOs, which were announced in December 2011. Altogether, CMS says as many as 4 million Medicare beneficiaries are now covered by ACOs. According to CMS, about 50% of Medicare ACOs are physician-led organizations that serve fewer than 10,000 Medicare beneficiaries. Moreover, about 20% of the ACOs include rural health centers, community health centers, and critical access hospitals that service rural and low-income communities. In addition, 15 organizations in the latest ACO cohort are Advanced Payment Model ACOs, which are physician-based or rural providers granted capital to invest in electronic health systems, staff, and other infrastructure improvements. CMS will recoup the advanced payments through future shared savings. Another 15 Advanced Payment Model ACOs were announced in the second round of ACOs.
  • CMS won’t say why the nine hospitals may drop out, but fear of losing money on the bundled payment could be factor. Earlier this year, Jim Hinton, chairman-elect of the American Hospital Association, warned that while pioneer demo hospitals are responsible for controlling patient costs, their ability to manage the patients’ care is limited. For example, they can’t forbid the patients from seeing doctors or other health providers who aren’t part of the pioneer system.   Compounding the problem is the delay the Pioneer systems have experienced in getting CMS to provide them the medical claims data they need to track spending on their assigned patients.
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  • Future of Physcian Payments

    1. 1. Presented by David J. Zetter, PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC Presented by David J. Zetter, PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC © 2013 Zetter HealthCare 1 The Future of Physician Payments
    2. 2. • No copyright claimed on government material or information. This material is designed to offer basic information. The information presented is based on the experience, training and interpretation of the author. Although the information has been carefully researched and reviewed for accuracy and completeness, neither the author or PAHFMA accept any responsibility or liability with regard to errors, omissions, misuse or misinterpretation. 2 © 2013 Zetter HealthCare Disclaimer 2
    3. 3. State of Healthcare Recent Observations Capital Hill Update Emerging Opportunities Accountable Care Models ACO Flaws? Initiatives The Patient, Reforms, Trends Predictions © 2013 Zetter HealthCare 3 Takeaways
    4. 4.  Healthcare Reform/Transformation • 24.4% 2013 Medicare rate cut if Congress doesn’t act by Jan 1, 2014 • 201 2“doc fix” cost $24.4B, now $26B • MedPAC recommendations to realign fee-schedule to support primary care and ACOs, bundled payments, capitated models & shared savings programs • MedPAC SGR recommendation slides – http://tiny.cc/u58qv • March 2013 MedPAC recommendations (10 chapters) improving equity & efficiency of payments, improving quality & integrity • Delays in elements of ACA Legislation/Regulation • Employer mandate • Verification of consumer claims of no health insurance • Scale back oversight of earnings • Delayed electronic notices ‘til 2015 © 2013 Zetter HealthCare 4 State of Healthcare
    5. 5.  National & Global Efforts • Create efficiencies, increase access & “stabilize rocketing costs” (sure, we know better… NOW) • As compared globally, we ranked #1 on costs, but 20-40th on outcomes  Beginning the Shift to Paying for Reporting, Quality & Value • 423 known ACOs active in 49 states (Jan 2013 cumulative to date) • Hospital-sponsored: 189 • Physician group-sponsored: 202 • Payor-sponsored: 32 • 106 ACOs added to shared savings program (Jan 2013):259 © 2013 Zetter HealthCare 5 State of Healthcare
    6. 6.  Highmark launching accountable care network in Pennsylvania rewarding physicians for efficient & effective patient-centric care and quality outcomes  Latest effort to repeal SGR formula calls for 0.5% pay hike & 5 yrs stable payment increases  Two Pioneer ACOs failed to save money, but one was; Pioneer – promising, but unproven due to Medicare’s extremely low budget. Claim all 32 report success w/quality metrics.  Seven Pioneer ACOs leaving program and going to Shared Savings Program model. © 2013 Zetter HealthCare 6 Recent Observations
    7. 7.  Another two Medicare ACO participants leaving accountable care entirely  Amplified movement away from FFS towards Shared Savings  Increased momentum and security for care coordination strategies and more pressure for aligning incentives and creating efficient care models © 2013 Zetter HealthCare 7 Recent Observations
    8. 8.  All payers seem to be moving in direction of quality and value vs just volume  UHC sees accountable care work more than doubling to $50B by 2017  CMS moving toward patient-care management reimbursement – 605 pg proposed rule © 2013 Zetter HealthCare 8 Recent Observations
    9. 9. These possible changes will have an effect on reimbursement down the road  Republicans urge unions to back ACA repeal effort  GOP continues push for individual mandate delay  Senator Mark Begich introduces bill delaying employer mandate for two years © 2013 Zetter HealthCare 9 Recent Observations
    10. 10.  Meaningful Use Stage 2 • Final Rule for MU Stage 2 – Complete, but delayed to 2014  White House • Heavily engaged in HITECH progress w/ frequent panels & town halls lately • REC, HIE, Beacon, Standards, Interoperability, etc.  FDA, ONC & FCC • FDA Safety and Innovation Act, S 3187 • Prescription Drug User Fee Amendments Act of 2012 • Requires the HHS w/i 18 months to publish report “that contains a proposed strategy & recommendations on an appropriate, risk- based regulatory framework pertaining to health IT, incl. mobile medical applications, that promotes innovation, protects patient safety and avoids regulatory duplication  Energy & Commerce Committee – 2/14/13 • SGR: Data, Measures and Models; Building a Future Medicare Physician Payment System • http://energycommerce.house.gov/hearing/sgr-data-measures-and-models-building-future- medicare-physician-payment-system © 2013 Zetter HealthCare 10 Capital Hill Update
    11. 11.  EHR Meaningful Use Stages 2 & 3  Preventing payment reductions  Regional Extension Centers  Health Information Exchanges  ACOs  Accountable Care  Payment Bundling  Medical Home Models  Patient-Centered Medical Home  Communities of Health  EHR-enabled Clinical Research  Primary Care Reimbursement Increases  Proactive preparation – Best practices! …..Navigating Payment & Delivery Reform © 2013 Zetter HealthCare 11 Emerging Opportunities
    12. 12. “There is pressure to increase pay to primary care doctors. That money is going to come from somewhere, and some of it is probably going to come from us. We’re the highest-paid providers in the healthcare economy, and we have no friends in this game. If we want to preserve our income opportunities in the future, we will need to become more creative and much more capable of managing risk.” John Cherf, MD, MPH, MBA AAOS 2012 Annual Meeting © 2013 Zetter HealthCare 12 Emerging Opportunities
    13. 13.  EHR Meaningful Use • Over $27B available w/ no cap (protected in Medicare Trust Fund) • As of May 2013 – over 264,292 care providers registered for MU • 120,002 Medicaid registrants • 4,299 hospitals • Over 102,000 care providers achieving incentive payments • Over $12.7B in incentives paid to EPs & hospitals already • Audits are fast and furious • Know what to expect to provide to validate attestation • Meaningful Use Stage 2 Overview Chart – http://bit.ly/z0MHUC © 2013 Zetter HealthCare 13 State of ARRA & HITECH
    14. 14.  EHR Certification • 6 ONC-ATCB certifying entities  CCHIT remains industry gold standard  Regional Extension Centers  Operations underway at various levels of execution  Find your local REC http://www.healthit.gov/providers-professionals/regional-extension-centers-recs  Health Information Exchanges  Operations underway at various levels of operation  “Revised” BAAs required September 23, 2013 © 2012 Zetter HealthCare 14 State of ARRA & HITECH
    15. 15. © 2013 Zetter HealthCare 15 The Evolution …essential building blocks for a sustainable healthcare system
    16. 16.  Electronification / Health IT & EHR Utilization  Interoperability (what’s this?)  Coordinating Care (with Care Team)  Best Practices  Quality Improvement / Outcomes Improvement  Patient Education  Patient Satisfaction (the future? DUH!)  Cost Containment  Cost Reduction (to increase Shared Savings) © 2013 Zetter HealthCare 16 Accountable For What?
    17. 17.  Single Provider ACO: Usually an integrated delivery system that receives payment for a population and takes on the responsibility of providing accountable care  Multiple-Provider ACO: Two or more entities have partnered to provide accountable care for a population  Insurer ACO: A regional or national insurer who organizes providers so that the insurer bears the burden of assuring accountable care  Insurer-Provider ACO: The insurer and the provider are equal partners in providing accountable care © 2013 Zetter HealthCare 17 ACO Organization Types
    18. 18. © 2013 Zetter HealthCare 18 Accountable Care Models In the past year, the numbers of ACOs sponsored by physician groups has almost doubled. 32 106 189 202
    19. 19. 1. ACOs will prompt physicians to alter their care delivery. “ Many proponents of ACOs believe that doctors automatically will begin to provide care different from what they have offered in the past. Physicians need to be reeducated and retrained to provide care in an ACO, but even after that effort, the result would be uncertain. © 2013 Zetter HealthCare 19 ACO “Flaws”
    20. 20. 3. ACOs will save significant amounts of money. The Congressional Budget Office estimated the savings from CMS' 32 Pioneer ACOs would be about $1.1 billion over five years, according to the authors. This is "insignificant," as Medicare's budget is $468 billion. Commercial organizations will provide "relatively small reductions" in healthcare spending, if any. © 2013 Zetter HealthCare 20 ACO “Flaws”
    21. 21. 2. Change in patient behavior is not necessary. Providers in an ACO are responsible for their patients' care costs, regardless of where they receive care — a flaw the authors find unfair. ACOs hold caregivers accountable without requiring patient accountability. How can this work? Patients may not comply with treatments suggested by physicians and can also choose to not share their medical history or claims data with the organization, which can be a detriment to the ACO responsible for their care. © 2013 Zetter HealthCare 21 ACO “Flaws”
    22. 22.  Every major carrier has an ACO-type plan  Aetna, Blue Cross Blue Shield, CIGNA, UHC, and Anthem/Wellpoint  Various approaches utilized across the board  Shared Savings, Shared-Risk, Partial Capitation  Real world example – CIGNA  22 programs in 13 states; 270,000 customer/patients  Primary care focus, open to multi-specialty, IDNs, physician- hospital organizations  Must meet quality improvement and cost reduction criteria to receive benefits  Acquisitions changing the landscape  Aetna & Coventry (what next?) © 2013 Zetter HealthCare 22 Private Payer Initiatives
    23. 23.  Medicare Shared Savings Program (MSSP)  Initial 27 Medicare ACOs announced in April 2012  Next round of Medicare ACOs slated for July  Pioneer ACO Model  32 chosen to improve patient care and save $1.1B over five years (4 have decision requirement pending)  Rapid movement from Shared Savings to population-based payment model back to Shared Savings  Offers heightened risk/reward with more flexible payment methods  Advance Payment ACO Models  Initial 5 organizations named in April 2012; Not necessarily for this world  Upfront payments awarded to design care coordination infrastructure *All programs found at http://innovations.cms.gov © 2013 Zetter HealthCare 23 Medicare ACO Initiatives
    24. 24.  9 of 32 hospitals and health systems involving bundled payments may quit the three-year “pioneer” demonstration  4 or more may switch to a second ACO demonstration that carries less risk.  History: The experimental ACO programs, which now have more than 250 hospital participants, are intended to save Medicare as much as $940 million through 2015 by reducing rehospitalizations of seniors with diabetes, heart failure and other chronic diseases. Participating hospitals were projected to gain as much as $1.9 billion in bonus payments. The Pioneer hospitals and affiliated physician groups agreed to a three-year plan to forgo traditional fee-for-service payments, where hospitals charge for every procedure, and instead get a fixed monthly stipend for individual patients. © 2013 Zetter HealthCare 24 Medicare ACO Initiatives
    25. 25.  Combining care processes with patient expectations  Improve patient adherence, satisfaction & enrollment  Care processes: Evidence-based team plan for:  Surgical procedure, care transition, preventive care, cost containment, low readmission  Utilizing EHR, PHR, and case management software  Example: EHR clinical extracts & HIE for specific reporting requirements (home health, skilling nursing) CMS data  Beacon Community Model – information systems supporting care processes matched with performance goals exist © 2013 Zetter HealthCare 25 Integrating the Patient
    26. 26.  Patient Engagement, Empowerment & Management Strategies  Produce analytics on patient/ consumer population  Sample Functionality  Phone & “text” reminders  eMail calendar invites  Customized (automatic) patient education materials that incorporate video and “smart” self-help tools  Robust Patient “CRM” –type Strategies & Functionality  Analytics comparing and contrasting outcomes & quality reports  eMail marketing tools & “smart” patient education materials © 2013 Zetter HealthCare 26 Managing the Patient
    27. 27.  The transition from fee-for-service to risk-based reimbursement is inevitable  The most important clinical components of managing risk-based payments are patient care coordination & population care management – with robust use of data aggregation, analytics & shared information  Innovation will fuel health IT adoption and usability  Payment reform will fuel health IT usability as well • Pay for quality & value, not for “clicks” © 2013 Zetter HealthCare 27 Payment Reform Trends
    28. 28.  Consumers will drive change as they become responsible for higher percentage of cost & tools and incentives become readily available  Government will likely follow rather than lead the transition to risk-based payments as we are witnessing  Macro variables like economic growth and the ability of the federal government to borrow capital will greatly impact the transition to risk-based payment, but to varying degrees. © 2013 Zetter HealthCare 28 Payment Reform Trends
    29. 29.  Ensure 3-5 year Operating or Growth Plans  If you are approached by a local Accountable Care Plan or ACO…  Financial incentives to join ACO?  Strategic incentives to join ACO?  Access to bi-directional data/ interoperability?  Legacy vs. Innovation  Standards-based interoperability  What data requirements are they requesting?  Binding?  Non-binding? © 2013 Zetter HealthCare 29 Practice or Community Strategy
    30. 30.  Assess EHR, interoperability & overall technology infrastructure  Assess beneficiary patient volume; patients can opt in/out voluntarily  Engage peers, associations, payers, employers & health systems in your community  Identify CMS, private payer or combined care coordination/ACO opportunities  ACOs, Accountable Care & “At-Risk” communities are forming today around the country © 2013 Zetter HealthCare 30 Accountable Care Positioning
    31. 31.  Pinpoint patients for clinical teams at the point of care  Engage & educate patients to hold them accountable for outcomes  Counseling and coordination of care is paramount  Identify reporting requirements which will include a key focus on patient satisfaction, screenings and assessments  Utilize Health IT to increase the velocity of coordination in your community by placing a focus on the importance of EHRs and meaningful use  Develop care management resources to monitor delivery and ensure that patients receive appropriate follow-up care © 2013 Zetter HealthCare 31 Accountable Best Practices
    32. 32. © 2013 Zetter HealthCare 32 Insurance Exchanges Source: Robert Glus, FSA, MAAA Conrad Siegel Actuaries Initial Offerings
    33. 33.  Exchanges • States will continue to innovate • ACOs and other integrated systems will begin to offer coverage  Health Care Reform • States will be primary drivers • Payment and delivery system reform  Patients • More engaged; savvy consumers • Defined contribution and employee choice will become the norm • Consumer driven plan designs • Evolution of price transparency tools  HIT • Lynchpin for all other reforms • Will make health care more digital, measurable, and mobile © 2013 Zetter HealthCare 33 Predictions Beyond 2013
    34. 34.  Provider Risk Sharing • Away from FFS -> ACOs/Medical Homes (P4P) • Provider Consolidation  Limited Network Plans • Direct contracting for some services (limited reimbursements)  Employer Plans • Must align incentives • Plan Design, Premium-Sharing, Eligibility • More wellness programs & health standards expectations • Increases in Employer Self-Insured  Additional delays in ACA implementation  Hospital reimbursement to decrease © 2013 Zetter HealthCare 34 Predictions Beyond 2013
    35. 35. © 2013 Zetter HealthCare 35 For Follow-up & Further Questions Contact: David J. Zetter, PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC 717.691.7100 Email: djzetter@zetter.com Subscribe to our newsletter at Follow us on www.twitter.com/djzetter and www.linkedin.com/in/djzetter