Learning the New Language of Healthcare
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As healthcare is a language “all its own,” PYA Principal David McMillan presented “Learning the New Language of Healthcare" at the Georgia Society of CPAs' 2014 Healthcare Conference.
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Learning the New Language of Healthcare
- 1. Learning the New Language of Healthcare February 7, 2014 9:35am – 10:25am The Georgia Society of CPAs February 7, 2014 Page 0
- 2. What am I Trying to Say? Everyone knows these… FYI For your information LOL Laughing out loud SMH Shaking my head BRB Be right back JK Just kidding But what about these? EBP Evidence-Based Protocol CQM Clinical Quality Measures GPRO Group Practice Reporting Option BFF Best friends forever BTW By the way CIN Clinically Integrated Network The Georgia Society of CPAs February 7, 2014 Page 1
- 3. Are We Speaking the Same Language? PQRS PHO VBP CIN ACO The Georgia Society of CPAs February 7, 2014 Page 2
- 4. PERFORMANCE The Curve First Curve Fee-for-Service Quality Not Rewarded Pay for Volume Fragmented Care Acute Hospital Focus Stand Alone Providers Thrive Straddle The Curve Second Curve Value Payment Continuity of Care Required Systems of Care Providers at Risk for Payment IT Centric Physician Alignment Revenue Drops Minimal Reward for Quality Volume Decreases No Decisive Payment Change Pay for Volume Continues High Cost IT Infrastructure Physicians in Disarray TIME The Georgia Society of CPAs February 7, 2014 Page 3
- 5. Old Healthcare New Healthcare • Sickness System • Wellness System • Health: No Disease • Health: Wellness • Acute Disease • Chronic Disease • Fee for Service • Value Based Payment • Hospital Beds Full • Hospital Beds Empty • Hospital Centric • Community Centric • Doctor Centric • Patient Centric • Doctor Decides • Shared Decision Making • Quality Decided by Doc • Measurable Metrics The Georgia Society of CPAs February 7, 2014 Page 4
- 6. Old Healthcare New Healthcare • Cost not considered • Decreased cost • Independent doctors • Integrated doctors • Independent hospital • Integrated delivery sys. • Medical record secret • Open access record • Opaque • Transparent • Artificial harmony • Cognitive conflict • Analogue • Digital • Hypothesis driven clinical trials • Predictive analytics actionable correlations The Georgia Society of CPAs February 7, 2014 Page 5
- 7. Evolution of Reimbursement Fee-forService Shared Savings Bundled Payments Partial Capitation Global Payment Visitor Patient Person Symptomatic Episode Overall Health Acute Needs Most Common Conditions Community Health Characteristics Services & Supplies Packaged Treatments Manage Well Being Unit Based Efficiency Based Outcome Based No Financial Risk Partial Financial Risk Full Financial Risk The Georgia Society of CPAs February 7, 2014 Page 6
- 8. The Healthcare System of the Past Physicians/Providers Patients Payers Inefficiency Lack of Coordinated Information Unsupportable Economics Hospitals & Other Providers The Georgia Society of CPAs February 7, 2014 Page 7
- 9. Hypothetical: Martha is a 67 year old women who needs a hip replacement Episodes of Care Hip Replacement • Orthopedic Surgeon (payment) • Surgery - Anesthesia (payment) - Pathology (payment) • Acute Care (payment) • Rehabilitation - PT(payment) Nine months later • ED • Admitted for pneumonia (payment) • Treated by hospitalist (payment) • Consulted by cardiologist (payment) Six months later – Well Check • Gaping hole in information • Information from previous two episodes of care may never reach primary care provider - Drug interactions - Duplicative testing The Georgia Society of CPAs February 7, 2014 Page 8
- 10. The Road to Clinical Integration PHO OLD IPA Payer Physician Narrow Network Physician Bundled Payment Primary Care Physician Patient-Centered Medical Home Specialist Shared Savings Capitation NEW + Coordinated Care + $ for Coord. Care ACO
- 11. What Does “Value” Look Like? + QUALITY = COST + EFFICIENCY VALUE The Georgia Society of CPAs February 7, 2014 Page 10
- 12. What is a “Value-Based Payment” Model? Efficiency: The state or quality of achieving maximum productivity with minimum wasted effort or expense Quality: The standard of something as measured against other things of a similar kind; the degree of excellence of something “quality of life” also the general Value: The regard that something is held to excellence of standard or level deserve; the importance or preciousness of something: “Your support is of great value” Value-Based Payment: A payment model which rewards healthcare providers for meeting certain predetermined performance measures related to quality and efficiency The Georgia Society of CPAs February 7, 2014 Page 11
- 13. Hospital Value-Based Purchasing (“HVBP”) • Rewards and penalties based on quality measures and patient satisfaction scores • Penalties for high readmission rates – FY12-14 for AMI, heart failure, and pneumonia; expand list in FY15 – Reduce overall inpatient payment by 1%-3% • Penalties for Hospital Acquired Conditions (HACs)/Never Events – In FY15, top 25% in HACs will have payments reduced by 1% The Georgia Society of CPAs February 7, 2014 Page 12
- 14. Value: PVBP PVBP: Physician Value-Based Purchasing • Physician feedback program – Individual reports on resource use and quality of care as compared to peer group • Physician value-based payment modifier – Phased in between 2015 and 2017 – 2014 performance determines 2016 modifier – Budget neutral – wRVU x conversion factor x VBPM • Positive number = paid more • Negative number = paid less The Georgia Society of CPAs February 7, 2014 Page 13
- 15. PVBP vs. SGR The Georgia Society of CPAs February 7, 2014 Page 14
- 16. Sustainable Growth Rate (“SGR”) Fix • On October 30, 2013 the Senate Finance Committee and the House Ways and Means Committee released a discussion draft of a SGR fix, offering a comprehensive approach to MPFS payment reform. • Key provisions include: – Payment freeze – Termination of payment penalty programs (PQRS, MU) – New value-based performance (VBP) program – Alternative payment model (“APM”) participation – Complex chronic care management – Appropriate use criteria – Valuation of services The Georgia Society of CPAs February 7, 2014 Page 15
- 17. Physician Quality Reporting System (PQRS) • 2014: 201 quality measure available for reporting • Paid for reporting (pay-for-reporting or P4R), not attaining certain scores (pay-forperformance or P4P) • Carrots followed by sticks – 0.5% bonus for 2012-2014 – 1.5% penalty for 2015 – 2.0% penalty for 2016 and thereafter The Georgia Society of CPAs February 7, 2014 Page 16
- 18. PQRS: How Patients are Identified Patients whose care you directed: you billed 35% or more of all their outpatient E&M visits Patients whose care you influenced: you billed less than 35% of outpatient E&M visits but 20% or more of their costs Patients whose care you contributed are those you billed less than 35% of visits and less than 20% of their total cost The Georgia Society of CPAs February 7, 2014 Page 17
- 19. Tiered Value-Based Payment Modifier Assessment Low Cost Average Cost High Cost High Quality 2.0%* 1.0%* 0.0% Average Quality 1.0%* 0.0% -0.5% Low Quality 0.0% -0.5% -1.0% * Physicians who score in these categories who treat high-risk beneficiaries could receive an additional one percentage point in bonus money. Source: Proposed 2013 physician fee schedule, Centers for Medicare & Medicaid Services, Federal Register, July 30. The Georgia Society of CPAs February 7, 2014 Page 18
- 20. Other Forms of PQI Meaningful Use Incentives/Penalties - Stage One objectives and clinical quality measures MU - Stage 2 delayed – if attested Stage 1 in 2011 attest Stage 2 in 2014 (instead of 2013) - 1% penalty in 2015 if not MU in 2014; 2% in 2016; 3% in 2017; 4% in 2018 or 2019 eRx Electronic Prescription Incentive Program - 2.0% penalty in 2014 unless used eRx 10x by 06/30/13 (only receive 98% of Medicare Part B PFS amount for covered professional service in 2014) The Georgia Society of CPAs February 7, 2014 Page 19
- 21. Fundamentals Driving Clinical Integration The Georgia Society of CPAs February 7, 2014 Page 20
- 22. Defining Clinical Integration The Georgia Society of CPAs February 7, 2014 Page 21
- 23. Plotting Your Course on the way to Managing Population Health The Georgia Society of CPAs February 7, 2014 Page 22
- 24. PCMH PCMH: Patient-Centered Medical Home • Improves primary care through patientcentered care, cooperation among physicians, and coordination and tracking care over time • Facilitates partnerships among patients, their physicians and the patient’s family members • Care is facilitated by registries, health information technology (HIT), health information exchange (HIE), etc. to ensure that patients receive the appropriate care at the appropriate time in the appropriate manner Primary Care Physician Patient-Centered Medical Home + Coordinated Care + $ for Coordinated Care The Georgia Society of CPAs February 7, 2014 Page 23
- 25. IPA IPA: Independent Practice association • Association of medical doctors (primary care physicians and specialists) and other healthcare professionals that have contracted with most PPO, POS, and HMO insurance plans Physician Physician Primary Care Physician Specialist The Georgia Society of CPAs February 7, 2014 Page 24
- 26. PHO PHO: Physician Hospital Organization • Joint venture between hospital(s) and physician group(s) • Acts as a single agent for managed care contracting • Aligns interests of hospitals and physicians but allows each to retain autonomy • Opportunity to act as a vehicle to advance clinical integration network initiatives Physician Primary Care Physician Physician Specialist The Georgia Society of CPAs February 7, 2014 Page 25
- 27. CIN What is a CIN? A network of physicians working in collaboration with a hospital, using a performance management infrastructure to develop and implement initiatives to improve the quality and efficiency of healthcare services Network negotiates and contracts with payers for improved reimbursement based on quality and efficiency The Georgia Society of CPAs February 7, 2014 Page 26
- 28. Understanding Basic CIN Economics The Georgia Society of CPAs February 7, 2014 Page 27
- 29. What Does a CIN Do? The Georgia Society of CPAs February 7, 2014 Page 28
- 30. ACO ACO: Accountable Care Organization • “Under the program, primary care physicians are encouraged to join together with other providers to take responsibility for the full continuum of their primary care patients’ care.” • “[Physicians] must commit to reporting comprehensive measures of the quality and -- eventually -- outcomes of care. If they are able to improve quality and thereby reduce costs, they will receive a share of the savings achieved.” • “The term “accountable” is intended to mean just that; ACOs should only receive additional payments to the extent that they are demonstrably improving care for their patients.” – The Dartmouth Atlas of Health Care – The Georgia Society of CPAs February 7, 2014 Page 29
- 31. MSSP ACO MSSP ACO: Medicare Shared Savings Program ACO • Clinically integrated networks that have contracted with CMS to share in whatever money the community saves – To be eligible for shared savings, must meet minimum performance standards for 33 ACO quality measures. – How do we know if they have “saved”? – CMS reviews the historic costs of the patients in the network and uses that as the baseline to determine savings. – As of January 1, 2014, 343 MSSP ACOs approved by CMS. The Georgia Society of CPAs February 7, 2014 Page 30
- 32. MSSP ACO Functions What Really Matters Establish and maintain quality assurance and improvement program Promote evidence-based medicine, patient engagement, care coordination, patientcenteredness Compile and report participants’ quality measure scores Distribute shared savings and assess shared losses The Georgia Society of CPAs February 7, 2014 Page 31
- 33. Calculating Shared Savings/Losses Each ACO participant continues to bill fee-for-service independently Eligibility for and level of shared savings based on performance score Calculate actual annual Medicare spent for assigned beneficiaries against pre-determined benchmark Apply formula to determine share of savings (losses) The Georgia Society of CPAs February 7, 2014 Page 32
- 34. BPP BPP: Bundled Payment Program • A single “bundled” payment covers the entire range of services delivered by two or more healthcare providers that are rendered during a single episode of care or over a specified time period Episode 1: Hip Replacement • • • • Orthopedic Surgeon Surgery o Anesthesia o Pathology Acute Care Rehabilitation Facility o PT - payment - payment - payment - payment - payment - payment Single payment The Georgia Society of CPAs February 7, 2014 Page 33
- 35. Success in Bundling for Episodes of Care Create Efficiencies Decrease Costs • Re-design Care Model Improve Care • Financial/Gainsharing Model • Quality Focus Successful Bundling for episode of care The Georgia Society of CPAs February 7, 2014 Page 34
- 36. What is Next? The Georgia Society of CPAs February 7, 2014 Page 35
- 37. Other Interesting Developments/Disruptions • Gamification • Big Data • Quantified Self Movement • Nanomedicine • Digital Medicine The Georgia Society of CPAs February 7, 2014 Page 36
- 38. Questions? The Georgia Society of CPAs February 7, 2014 Page 37
- 39. Terms ACO Accountable Care Organization BPP Bundled Payment Program CIN Clinical Integrated Network eRx Electronic Prescription MU Meaningful Use P4P Pay-for-Performance P4R Pay-for-Reporting PCMH PHO Physician Hospital Organization PQI FFS Patient Centered Medical Home Physician Quality Incentives Fee-for-Service HACs Hospital Acquired Conditions HIE Health Information Exchange HIT Health Information Technology PQRS HVBP Hospital Value-Based Purchasing IPA Independent Practice Association IQR Inpatient Quality Reporting MSSP Patient Quality Reporting System PQRS Physician Quality Reporting System PVBP Physician Value-Based Purchasing VBP Value-Based Purchasing Medicare Shared Savings Program The Georgia Society of CPAs February 7, 2014 Page 38
- 40. Thank you! David McMillan Principal PYA dmcmillan@pyapc.com 865-673-0844 The Georgia Society of CPAs February 7, 2014 Page 39