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Making CJR Work for You: A Roadmap for Successful Implementation of Medicare Bundles

The document outlines the Comprehensive Care for Joint Replacement (CJR) program, a mandatory bundled payment initiative by Medicare for lower extremity joint procedures starting April 1, 2016. It emphasizes the importance of payer executive leadership, the need for effective post-acute care networks, and risk management strategies for successful implementation. Key details include target pricing based on regional historical data, reconciliation payments, quality scoring mechanisms, and the significance of analytics in managing the program effectively.

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Making CJR Work for You A Roadmap for Successful Implementation of Medicare Bundles https://innovation.cms.gov/initiatives/cjr December 10, 2015
shamburger@thearistonegroup.com (248) 613-7166 Sheldon Hamburger
Key Takeaways You’re the payer Executive leadership is essential Opportunity is in post-acute Doing the right thing is most profitable
Background “…HHS goal of 30 percent traditional FFS Medicare payment through alternative payment models by the end of 2016… 50 percent by the end of 2018” HHS Press Office 1-26-15
Anchor Stay 44% Ambulatory 4% HHA 5% Readmissions 13% IRF 9% LTAC 4% Other 2% SNF 18% Sample Hospital Total Program 100% $113,000,000 Anchor Stay 44% $50,000,000 Post-Acute 56% $63,000,000 Ambulatory 4% $5,000,000 HHA 5% $6,000,000 Readmissions 13% $15,000,000 IRF 9% $10,000,000 LTAC 4% $5,000,000 Other 2% $2,000,000 SNF 18% $20,000,000
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
The Program Comprehensive Care for Joint Replacement MANDATORY Bundled payment for lower extremity joints MS-DRG 469 & 470 – w/ & w/o CC/MCC Medicare FFS beneficiaries DRG + 90 days post-discharge All Part A and Part B (some exceptions) Hospitals only
The Program Only hospitals in one of 67 MSAs • MSA: Metropolitan Statistical Area • Census Bureau designation • CMS used only for selecting hospitals Target pricing is region-based MSA
The Program Included services  Physicians' services  Inpatient hospitalization (including readmissions)  Inpatient Psychiatric Facility (IPF)  Long-term care hospital (LTCH)  Inpatient rehabilitation facility (IRF)  Skilled nursing facility (SNF)  Home health agency (HHA)  Hospital outpatient services  Independent outpatient therapy  Clinical laboratory  Durable medical equipment (DME)  Part B drugs  Hospice Excluded services Acute clinical conditions not arising from existing episode- related chronic clinical conditions or complications of the LEJR surgery  Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care
The Program Timing • Begins April 1, 2016 • 5 “year” program • 2016 is 9 months (Apr 1 – Dec 31) • Phase-in of risk, targets, requirements
The Program Payment • FFS “as usual” for all parties • Retrospective reconciliation (annual) • Total episode spend – target price = ? • <0 means you get $ • >0 means you owe $
The Program Total episode spend over ~90 days • CMS totals all claims for: • DRG + SNF + HHA + DME + Part B Target price • CMS determines/revises 2x/yr • Based on history (you and your region)
The Program CMS Spend (Claims Paid) Target Price Result
The Program CMS Spend (Claims Paid) Target Price Result $18,000 $20,000 CMS pays you $2,000
The Program CMS Spend (Claims Paid) Target Price Result $18,000 $20,000 CMS pays you $2,000 $21,000 $20,000 You pay CMS $1,000 Shared Savings Model
The Program Target price • Variable over the program lifetime • Phase-in: 33% -100% on regional spend • Based on 3 year historical data • Stratified to accommodate fractures • Discounted for CMS “cut” CJR Target Baseline Pricing 2016 2017 2018 2019 2020 Jan 12-Dec 14 Jan 12-Dec 14 Jan 14-Dec 16 Jan 14-Dec 16 Jan 16-Dec 18
The Program
The Program DRG Pacific 469 $ 48,874 470 $ 23,425 DRG Mountain 469 $ 47,925 470 $ 23,734 West North DRG Central 469 $ 46,189 470 $ 23,800 West South DRG Central 469 $ 55,448 470 $ 27,464 East North DRG Central 469 $ 50,954 470 $ 25,480 East North DRG Central 469 $ 50,954 470 $ 25,480 Middle DRG Atlantic 469 $ 52,028 470 $ 27,406 New DRG England 469 $ 47,928 470 $ 24,858 South DRG Atlantic 469 $ 51,239 470 $ 25,989
The Program In addition…… • Based on BPCI Model 2 • Stop-loss & stop-gain phased in • CMS takes up 3% off the top • Could be as little as 1.5% based on….. • Your achievement of quality metrics
The Program CJR Reconciliation Payments 2016 2017 2018 2019 2020 Upside cap 5% of target 10% of target 20% of target 20% of target 20% of target
The Program CJR Reconciliation Payments 2016 2017 2018 2019 2020 Upside cap 5% of target 10% of target 20% of target 20% of target 20% of target Downside* None 10% of target 20% of target 20% of target 20% of target
The Program CJR Reconciliation Payments 2016 2017 2018 2019 2020 Upside cap 5% of target 10% of target 20% of target 20% of target 20% of target Downside* None 10% of target 20% of target 20% of target 20% of target * Exceptions None 3% of target 5% of target 5% of target 5% of target Spend > 2sd from the mean are excluded
The Program Quality issues • Quality results = $ • Composite Quality Score determines discount • Higher discount = less $ for you
The Program CJR Composite Quality Scoring Quality Category Maximum Points Score Allocation Notes RSCR for THA/TKA (NQF #1550) 10 50% Based on hospital's decile performance nationally
The Program CJR Composite Quality Scoring Quality Category Maximum Points Score Allocation Notes RSCR for THA/TKA (NQF #1550) 10 50% Based on hospital's decile performance nationally HCAHPS (NQF #0166) 8 40% Based on hospital's decile performance nationally
The Program CJR Composite Quality Scoring Quality Category Maximum Points Score Allocation Notes RSCR for THA/TKA (NQF #1550) 10 50% Based on hospital's decile performance nationally HCAHPS (NQF #0166) 8 40% Based on hospital's decile performance nationally THA/TKA outcomes 2 10% Voluntary yr 1-3, may be mandatory yr 4-5
The Program CJR Composite Scoring Performance Percentile (national) THA/TKA Complications HCAHPS Survey >= 90th 10.00 8.00 80-90th 9.25 7.40 70-80th 8.50 6.80 60-70th 7.75 6.20 50-60th 7.00 5.60 40-50th 6.25 5.00 30-50th 5.50 4.40 <30th 0.00 0.00
The Program CJR Discount Structure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0%
The Program CJR Discount Structure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0% 4.0-6.0 Acceptable Yes No 3.0% N/A 2.0% 3.0%
The Program CJR Discount Structure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0% 4.0-6.0 Acceptable Yes No 3.0% N/A 2.0% 3.0% 6.0-13.2 Good Yes Yes 2.0% N/A 1.0% 2.0%
The Program CJR Discount Structure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0% 4.0-6.0 Acceptable Yes No 3.0% N/A 2.0% 3.0% 6.0-13.2 Good Yes Yes 2.0% N/A 1.0% 2.0% >13.2 Excellent Yes Yes 1.5% N/A 0.5% 1.5%
The Program Data • CMS will provide several data sets – Aggregated data on target pricing (automatically) – Claim level data on target pricing (on request) – Monthly (?) updates on performance • Process for data request not yet defined • Target pricing data available prior to launch • Privacy issues and patient opt-out
The Program Gainsharing • Allowable with “CJR collaborators” • Providers/suppliers supporting the program • Care redesign efforts during the episode • Portion of reconciliation amount or… • Internal cost savings • Contract in place prior to patient care • Upside and downside risk (some limits)
The Program Waivers • SNF 3-day rule – starts in year 2 • Home health visits • Telehealth CMS & OIG joint statement • Protects gainsharing arrangements
The Program Other • Beneficiary incentives allowable • >$25 must be “documented” • Technology must be <= $1,000 • Items >$50 returned to the hospital after episode • Post-acute care options • Must provide a “complete list” to patient • Preferred provider network is not prevented
The Program Compared to BPCI • Regional target pricing • Hospitals only • Quality measures required for gainsharing • CMS discount as low as 1.5%
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
What It Means Game changer • Responsibilities extend beyond discharge • New business/care models • Synergies with other value-based models • Competitors as collaborators
What It Means Mandatory • No opt-out for you • Need to respond now (not tomorrow) ! • Risky to interpret year 1 as ramp-up • April 1, 2016 is sooner than you think
What It Means Extended care • 90 days post-discharge • Care settings are unfamiliar • Creating partnerships will be a challenge • Following patients is hard
What It Means Financial implications • Risk management • Measuring exposure • Skill sets; e.g., analytics • Managing new resources and requirements
What It Means Care reengineering • Pathways, protocols, alignment • Working with post-acute partners • Ongoing education challenge • Care navigator role
What It Means Data/analytics • Challenge to existing capabilities • Likely require outside products/services • Merging with internal data warehouse/systems • Deployment of data to users (real time)
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
What To Do Right Now Top to-do’s • Planning • Gainsharing arrangements • Post-acute network
What To Do Right Now Planning • Hire/contract/appoint/conscript a leader • Acquire industry knowledge/lessons learned • Establish a working team • Get an analytics partner
What To Do Right Now 0-30 30-60 60-90 Tactical planning
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting Post-acute care network
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting Post-acute care network Performance metrics
What To Do Right Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting Post-acute care network Performance metrics
What To Do Right Now Gainsharing arrangements • Identify partners (surgeons) • Begin discussions • Establish terms • Draft/execute contracts
What To Do Right Now Gainsharing contract considerations • Oversight, gainsharing, quality issues • Payments must be quality based • Negotiate quality measures and thresholds • Providers may be in other programs • Co‐management, professional service arrangements, medical directorships
What To Do Right Now Gainsharing contract considerations • What happens to unallocated $ • Payments off the top • Who owns the data?
What To Do Right Now Post-acute network • Identify key partners (SNF, HHA) • Review historical usage patterns • Establish formal selection/integration process • Determine selection criteria/metrics
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Understanding The Data Key drivers for your strategy • Availability of data - Internal and payer systems - Experiential • It’s all about post-acute spend • Ability to drive positive change • Volume creates leverage
Understanding The Data
~3% Savings here Pays for ~3% here Understanding The Data
Understanding The Data
Understanding The Data
Understanding The Data
Understanding The Data
Understanding The Data
Understanding The Data
SNF # Episodes Total Payment Average Payment Readmissions Readmission Rate SNF 1 80 $785,461 $9,818 6 8% SNF 2 25 $301,225 $12,049 4 16% SNF 3 25 $187,522 $7,501 1 4% SNF 4 23 $354,001 $15,391 0 0% SNF 5 17 $196,222 $11,542 4 24% SNF 6 12 $164,526 $13,711 3 25% SNF 7 11 $255,124 $23,193 2 18% SNF 8 11 $91,230 $8,294 1 9% SNF 9 10 $115,235 $11,524 3 30% SNF 10 8 $152,134 $19,017 0 0% SNF 11 7 $48,256 $6,894 2 29% SNF 12 6 $44,120 $7,353 1 17% SNF 13 4 $56,125 $14,031 0 0% SNF 14 3 $14,597 $4,866 1 33% SNF 15 4 $39,256 $9,814 0 0% SNF 16 3 $13,021 $4,340 1 33% Understanding The Data
HHA # Episodes Total Payment Average Payment Readmissions Readmission Rate Our own HHA 132 $422,123 $3,198 12 9% Competitor 22 $93,213 $4,237 4 18% Competitor 15 $87,456 $5,830 3 20% Competitor 12 $48,213 $4,018 3 25% Competitor 10 $35,124 $3,512 1 10% Competitor 9 $15,784 $1,754 2 22% Competitor 8 $23,549 $2,944 0 0% Competitor 7 $22,056 $3,151 5 71% Competitor 7 $18,452 $2,636 2 29% Competitor 7 $18,547 $2,650 0 0% Competitor 6 $18,213 $3,036 1 17% Competitor 6 $24,153 $4,026 1 17% Competitor 5 $17,918 $3,584 0 0% Competitor 4 $72,123 $18,031 1 25% Understanding The Data
Understanding The Data Sample Readiness KPIs / Data Sets Average annual CJR volume by year, location, DRG (past 5 years)
Understanding The Data Sample Readiness KPIs / Data Sets Average Annual CJR volume by year, location, DRG (past 5 years) Average internal cost data / DRG
Understanding The Data Sample Readiness KPIs / Data Sets Average annual CJR volume by year, location, DRG (past 5 years) Average internal cost data / DRG List of orthopedic practices, ownership, relationship, quality ratings
Understanding The Data Sample Readiness KPIs / Data Sets Average annual CJR volume by year, location, DRG (past 5 years) Average internal cost data / DRG List of orthopedic practices, ownership, relationship, quality ratings List of SNFs, HHAs, others, discharges patterns, quality ratings, readmission rates, LOS
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Post-Acute Networks Bundles are about post-acute spend • This is the source of your profit • Efforts should be focused here • Strategy is in optimizing that spend - Direct post-acute care utilization - Readmissions
Anchor Stay 44% Ambulatory 4% HHA 5% Readmissions 13% IRF 9% LTAC 4% Other 2% SNF 18% Total Program 100% $113,000,000 Anchor Stay 44% $50,000,000 Post-Acute 56% $63,000,000 Ambulatory 4% $5,000,000 HHA 5% $6,000,000 Readmissions 13% $15,000,000 IRF 9% $10,000,000 LTAC 4% $5,000,000 Other 2% $2,000,000 SNF 18% $20,000,000 Post-Acute Networks
Post-Acute Networks Key post-acute partners • SNF, HHA, IRF • Your own ED (and other EDs) • Community resources • Partner’s effect is bundle specific • Optimizing utilization is the goal
Post-Acute Care Network SNF # Episodes Total Payment Average Payment Readmissions Readmission Rate SNF 1 80 $785,461 $9,818 6 8% SNF 2 25 $301,225 $12,049 4 16% SNF 3 25 $187,522 $7,501 1 4% SNF 4 23 $354,001 $15,391 0 0% SNF 5 17 $196,222 $11,542 4 24% SNF 6 12 $164,526 $13,711 3 25% SNF 7 11 $255,124 $23,193 2 18% SNF 8 11 $91,230 $8,294 1 9% SNF 9 10 $115,235 $11,524 3 30% SNF 10 8 $152,134 $19,017 0 0% SNF 11 7 $48,256 $6,894 2 29% SNF 12 6 $44,120 $7,353 1 17% SNF 13 4 $56,125 $14,031 0 0% SNF 14 3 $14,597 $4,866 1 33% SNF 15 4 $39,256 $9,814 0 0% SNF 16 3 $13,021 $4,340 1 33%
0 10 20 30 40 50 60 70 80 90 SNF1 SNF5 SNF9 SNF13 SNF17 SNF21 SNF25 SNF29 SNF33 SNF37 SNF41 SNF45 SNF49 SNF53 SNF57 SNF61 SNF65 SNF69 SNF73 SNF Referrals Post-Acute Networks
Post-Acute Care Network HHA # Episodes Total Payment Average Payment Readmissions Readmission Rate Our own HHA 132 $422,123 $3,198 12 9% Competitor 22 $93,213 $4,237 4 18% Competitor 15 $87,456 $5,830 3 20% Competitor 12 $48,213 $4,018 3 25% Competitor 10 $35,124 $3,512 1 10% Competitor 9 $15,784 $1,754 2 22% Competitor 8 $23,549 $2,944 0 0% Competitor 7 $22,056 $3,151 5 71% Competitor 7 $18,452 $2,636 2 29% Competitor 7 $18,547 $2,650 0 0% Competitor 6 $18,213 $3,036 1 17% Competitor 6 $24,153 $4,026 1 17% Competitor 5 $17,918 $3,584 0 0% Competitor 4 $72,123 $18,031 1 25%
Post-Acute Networks Why a post-acute network? • Ensures best quality/performance • Creates standardized/compliant care • Develops competition toward improvement How to create the network? • Formal selection process • Internal input to performance metrics • Open to everyone
Post-Acute Networks Challenges • Timeframe • Internal pushback • External pushback Sample performance criteria • Reduction in LOS • Reduction in readmissions • Adherence to our protocols/pathways
Post-Acute Networks Special considerations • Understanding of PAC drivers • Limitations and capabilities • Hospital support of PAC needs • Integration; e.g., your staff in their facility
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Agenda The CJR program What it means to you What to do right now Understanding the data Post-acute networks
Questions ? Sheldon Hamburger shamburger@thearistonegroup.com (248) 613-7166

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Making CJR Work for You: A Roadmap for Successful Implementation of Medicare Bundles

  • 1.
    Making CJR Workfor You A Roadmap for Successful Implementation of Medicare Bundles https://innovation.cms.gov/initiatives/cjr December 10, 2015
  • 2.
  • 3.
    Key Takeaways You’re thepayer Executive leadership is essential Opportunity is in post-acute Doing the right thing is most profitable
  • 4.
    Background “…HHS goal of30 percent traditional FFS Medicare payment through alternative payment models by the end of 2016… 50 percent by the end of 2018” HHS Press Office 1-26-15
  • 5.
    Anchor Stay 44% Ambulatory 4% HHA 5% Readmissions 13% IRF 9% LTAC 4% Other 2% SNF 18% Sample Hospital TotalProgram 100% $113,000,000 Anchor Stay 44% $50,000,000 Post-Acute 56% $63,000,000 Ambulatory 4% $5,000,000 HHA 5% $6,000,000 Readmissions 13% $15,000,000 IRF 9% $10,000,000 LTAC 4% $5,000,000 Other 2% $2,000,000 SNF 18% $20,000,000
  • 6.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 7.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 8.
    The Program Comprehensive Carefor Joint Replacement MANDATORY Bundled payment for lower extremity joints MS-DRG 469 & 470 – w/ & w/o CC/MCC Medicare FFS beneficiaries DRG + 90 days post-discharge All Part A and Part B (some exceptions) Hospitals only
  • 9.
    The Program Only hospitalsin one of 67 MSAs • MSA: Metropolitan Statistical Area • Census Bureau designation • CMS used only for selecting hospitals Target pricing is region-based MSA
  • 10.
    The Program Included services Physicians' services  Inpatient hospitalization (including readmissions)  Inpatient Psychiatric Facility (IPF)  Long-term care hospital (LTCH)  Inpatient rehabilitation facility (IRF)  Skilled nursing facility (SNF)  Home health agency (HHA)  Hospital outpatient services  Independent outpatient therapy  Clinical laboratory  Durable medical equipment (DME)  Part B drugs  Hospice Excluded services Acute clinical conditions not arising from existing episode- related chronic clinical conditions or complications of the LEJR surgery  Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care
  • 11.
    The Program Timing • BeginsApril 1, 2016 • 5 “year” program • 2016 is 9 months (Apr 1 – Dec 31) • Phase-in of risk, targets, requirements
  • 12.
    The Program Payment • FFS“as usual” for all parties • Retrospective reconciliation (annual) • Total episode spend – target price = ? • <0 means you get $ • >0 means you owe $
  • 13.
    The Program Total episodespend over ~90 days • CMS totals all claims for: • DRG + SNF + HHA + DME + Part B Target price • CMS determines/revises 2x/yr • Based on history (you and your region)
  • 14.
    The Program CMS Spend (ClaimsPaid) Target Price Result
  • 15.
    The Program CMS Spend (ClaimsPaid) Target Price Result $18,000 $20,000 CMS pays you $2,000
  • 16.
    The Program CMS Spend (ClaimsPaid) Target Price Result $18,000 $20,000 CMS pays you $2,000 $21,000 $20,000 You pay CMS $1,000 Shared Savings Model
  • 17.
    The Program Target price •Variable over the program lifetime • Phase-in: 33% -100% on regional spend • Based on 3 year historical data • Stratified to accommodate fractures • Discounted for CMS “cut” CJR Target Baseline Pricing 2016 2017 2018 2019 2020 Jan 12-Dec 14 Jan 12-Dec 14 Jan 14-Dec 16 Jan 14-Dec 16 Jan 16-Dec 18
  • 18.
  • 19.
    The Program DRG Pacific 469$ 48,874 470 $ 23,425 DRG Mountain 469 $ 47,925 470 $ 23,734 West North DRG Central 469 $ 46,189 470 $ 23,800 West South DRG Central 469 $ 55,448 470 $ 27,464 East North DRG Central 469 $ 50,954 470 $ 25,480 East North DRG Central 469 $ 50,954 470 $ 25,480 Middle DRG Atlantic 469 $ 52,028 470 $ 27,406 New DRG England 469 $ 47,928 470 $ 24,858 South DRG Atlantic 469 $ 51,239 470 $ 25,989
  • 20.
    The Program In addition…… •Based on BPCI Model 2 • Stop-loss & stop-gain phased in • CMS takes up 3% off the top • Could be as little as 1.5% based on….. • Your achievement of quality metrics
  • 21.
    The Program CJR ReconciliationPayments 2016 2017 2018 2019 2020 Upside cap 5% of target 10% of target 20% of target 20% of target 20% of target
  • 22.
    The Program CJR ReconciliationPayments 2016 2017 2018 2019 2020 Upside cap 5% of target 10% of target 20% of target 20% of target 20% of target Downside* None 10% of target 20% of target 20% of target 20% of target
  • 23.
    The Program CJR ReconciliationPayments 2016 2017 2018 2019 2020 Upside cap 5% of target 10% of target 20% of target 20% of target 20% of target Downside* None 10% of target 20% of target 20% of target 20% of target * Exceptions None 3% of target 5% of target 5% of target 5% of target Spend > 2sd from the mean are excluded
  • 24.
    The Program Quality issues •Quality results = $ • Composite Quality Score determines discount • Higher discount = less $ for you
  • 25.
    The Program CJR CompositeQuality Scoring Quality Category Maximum Points Score Allocation Notes RSCR for THA/TKA (NQF #1550) 10 50% Based on hospital's decile performance nationally
  • 26.
    The Program CJR CompositeQuality Scoring Quality Category Maximum Points Score Allocation Notes RSCR for THA/TKA (NQF #1550) 10 50% Based on hospital's decile performance nationally HCAHPS (NQF #0166) 8 40% Based on hospital's decile performance nationally
  • 27.
    The Program CJR CompositeQuality Scoring Quality Category Maximum Points Score Allocation Notes RSCR for THA/TKA (NQF #1550) 10 50% Based on hospital's decile performance nationally HCAHPS (NQF #0166) 8 40% Based on hospital's decile performance nationally THA/TKA outcomes 2 10% Voluntary yr 1-3, may be mandatory yr 4-5
  • 28.
    The Program CJR CompositeScoring Performance Percentile (national) THA/TKA Complications HCAHPS Survey >= 90th 10.00 8.00 80-90th 9.25 7.40 70-80th 8.50 6.80 60-70th 7.75 6.20 50-60th 7.00 5.60 40-50th 6.25 5.00 30-50th 5.50 4.40 <30th 0.00 0.00
  • 29.
    The Program CJR DiscountStructure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0%
  • 30.
    The Program CJR DiscountStructure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0% 4.0-6.0 Acceptable Yes No 3.0% N/A 2.0% 3.0%
  • 31.
    The Program CJR DiscountStructure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0% 4.0-6.0 Acceptable Yes No 3.0% N/A 2.0% 3.0% 6.0-13.2 Good Yes Yes 2.0% N/A 1.0% 2.0%
  • 32.
    The Program CJR DiscountStructure Composite Quality Score Quality Category Eligible for Reconciliation Payment Eligible for Quality Incentive Payment Discount for Reconciliation Payment Discount for Repayment Year 1 Discount for Repayment Years 2-3 Discount for Repayment Years 4-5 < 4.0 Below Acceptable No No 3.0% N/A 2.0% 3.0% 4.0-6.0 Acceptable Yes No 3.0% N/A 2.0% 3.0% 6.0-13.2 Good Yes Yes 2.0% N/A 1.0% 2.0% >13.2 Excellent Yes Yes 1.5% N/A 0.5% 1.5%
  • 33.
    The Program Data • CMSwill provide several data sets – Aggregated data on target pricing (automatically) – Claim level data on target pricing (on request) – Monthly (?) updates on performance • Process for data request not yet defined • Target pricing data available prior to launch • Privacy issues and patient opt-out
  • 34.
    The Program Gainsharing • Allowablewith “CJR collaborators” • Providers/suppliers supporting the program • Care redesign efforts during the episode • Portion of reconciliation amount or… • Internal cost savings • Contract in place prior to patient care • Upside and downside risk (some limits)
  • 35.
    The Program Waivers • SNF3-day rule – starts in year 2 • Home health visits • Telehealth CMS & OIG joint statement • Protects gainsharing arrangements
  • 36.
    The Program Other • Beneficiaryincentives allowable • >$25 must be “documented” • Technology must be <= $1,000 • Items >$50 returned to the hospital after episode • Post-acute care options • Must provide a “complete list” to patient • Preferred provider network is not prevented
  • 37.
    The Program Compared toBPCI • Regional target pricing • Hospitals only • Quality measures required for gainsharing • CMS discount as low as 1.5%
  • 38.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 39.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 40.
    What It Means Gamechanger • Responsibilities extend beyond discharge • New business/care models • Synergies with other value-based models • Competitors as collaborators
  • 41.
    What It Means Mandatory •No opt-out for you • Need to respond now (not tomorrow) ! • Risky to interpret year 1 as ramp-up • April 1, 2016 is sooner than you think
  • 42.
    What It Means Extendedcare • 90 days post-discharge • Care settings are unfamiliar • Creating partnerships will be a challenge • Following patients is hard
  • 43.
    What It Means Financialimplications • Risk management • Measuring exposure • Skill sets; e.g., analytics • Managing new resources and requirements
  • 44.
    What It Means Carereengineering • Pathways, protocols, alignment • Working with post-acute partners • Ongoing education challenge • Care navigator role
  • 45.
    What It Means Data/analytics •Challenge to existing capabilities • Likely require outside products/services • Merging with internal data warehouse/systems • Deployment of data to users (real time)
  • 46.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 47.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 48.
    What To DoRight Now Top to-do’s • Planning • Gainsharing arrangements • Post-acute network
  • 49.
    What To DoRight Now Planning • Hire/contract/appoint/conscript a leader • Acquire industry knowledge/lessons learned • Establish a working team • Get an analytics partner
  • 50.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning
  • 51.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment
  • 52.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation
  • 53.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering
  • 54.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting
  • 55.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting Post-acute care network
  • 56.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting Post-acute care network Performance metrics
  • 57.
    What To DoRight Now 0-30 30-60 60-90 Tactical planning Organizational alignment Bundle evaluation Care process reengineering Contracting Post-acute care network Performance metrics
  • 58.
    What To DoRight Now Gainsharing arrangements • Identify partners (surgeons) • Begin discussions • Establish terms • Draft/execute contracts
  • 59.
    What To DoRight Now Gainsharing contract considerations • Oversight, gainsharing, quality issues • Payments must be quality based • Negotiate quality measures and thresholds • Providers may be in other programs • Co‐management, professional service arrangements, medical directorships
  • 60.
    What To DoRight Now Gainsharing contract considerations • What happens to unallocated $ • Payments off the top • Who owns the data?
  • 61.
    What To DoRight Now Post-acute network • Identify key partners (SNF, HHA) • Review historical usage patterns • Establish formal selection/integration process • Determine selection criteria/metrics
  • 62.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 63.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 64.
    Understanding The Data Keydrivers for your strategy • Availability of data - Internal and payer systems - Experiential • It’s all about post-acute spend • Ability to drive positive change • Volume creates leverage
  • 65.
  • 66.
    ~3% Savings here Pays for~3% here Understanding The Data
  • 67.
  • 68.
  • 69.
  • 70.
  • 71.
  • 72.
  • 73.
    SNF # Episodes Total Payment Average Payment Readmissions Readmission Rate SNF1 80 $785,461 $9,818 6 8% SNF 2 25 $301,225 $12,049 4 16% SNF 3 25 $187,522 $7,501 1 4% SNF 4 23 $354,001 $15,391 0 0% SNF 5 17 $196,222 $11,542 4 24% SNF 6 12 $164,526 $13,711 3 25% SNF 7 11 $255,124 $23,193 2 18% SNF 8 11 $91,230 $8,294 1 9% SNF 9 10 $115,235 $11,524 3 30% SNF 10 8 $152,134 $19,017 0 0% SNF 11 7 $48,256 $6,894 2 29% SNF 12 6 $44,120 $7,353 1 17% SNF 13 4 $56,125 $14,031 0 0% SNF 14 3 $14,597 $4,866 1 33% SNF 15 4 $39,256 $9,814 0 0% SNF 16 3 $13,021 $4,340 1 33% Understanding The Data
  • 74.
    HHA # Episodes Total Payment Average Payment Readmissions Readmission Rate Ourown HHA 132 $422,123 $3,198 12 9% Competitor 22 $93,213 $4,237 4 18% Competitor 15 $87,456 $5,830 3 20% Competitor 12 $48,213 $4,018 3 25% Competitor 10 $35,124 $3,512 1 10% Competitor 9 $15,784 $1,754 2 22% Competitor 8 $23,549 $2,944 0 0% Competitor 7 $22,056 $3,151 5 71% Competitor 7 $18,452 $2,636 2 29% Competitor 7 $18,547 $2,650 0 0% Competitor 6 $18,213 $3,036 1 17% Competitor 6 $24,153 $4,026 1 17% Competitor 5 $17,918 $3,584 0 0% Competitor 4 $72,123 $18,031 1 25% Understanding The Data
  • 75.
    Understanding The Data SampleReadiness KPIs / Data Sets Average annual CJR volume by year, location, DRG (past 5 years)
  • 76.
    Understanding The Data SampleReadiness KPIs / Data Sets Average Annual CJR volume by year, location, DRG (past 5 years) Average internal cost data / DRG
  • 77.
    Understanding The Data SampleReadiness KPIs / Data Sets Average annual CJR volume by year, location, DRG (past 5 years) Average internal cost data / DRG List of orthopedic practices, ownership, relationship, quality ratings
  • 78.
    Understanding The Data SampleReadiness KPIs / Data Sets Average annual CJR volume by year, location, DRG (past 5 years) Average internal cost data / DRG List of orthopedic practices, ownership, relationship, quality ratings List of SNFs, HHAs, others, discharges patterns, quality ratings, readmission rates, LOS
  • 79.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 80.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 81.
    Post-Acute Networks Bundles areabout post-acute spend • This is the source of your profit • Efforts should be focused here • Strategy is in optimizing that spend - Direct post-acute care utilization - Readmissions
  • 82.
    Anchor Stay 44% Ambulatory 4% HHA 5% Readmissions 13% IRF 9% LTAC 4% Other 2% SNF 18% Total Program100% $113,000,000 Anchor Stay 44% $50,000,000 Post-Acute 56% $63,000,000 Ambulatory 4% $5,000,000 HHA 5% $6,000,000 Readmissions 13% $15,000,000 IRF 9% $10,000,000 LTAC 4% $5,000,000 Other 2% $2,000,000 SNF 18% $20,000,000 Post-Acute Networks
  • 83.
    Post-Acute Networks Key post-acutepartners • SNF, HHA, IRF • Your own ED (and other EDs) • Community resources • Partner’s effect is bundle specific • Optimizing utilization is the goal
  • 84.
    Post-Acute Care Network SNF# Episodes Total Payment Average Payment Readmissions Readmission Rate SNF 1 80 $785,461 $9,818 6 8% SNF 2 25 $301,225 $12,049 4 16% SNF 3 25 $187,522 $7,501 1 4% SNF 4 23 $354,001 $15,391 0 0% SNF 5 17 $196,222 $11,542 4 24% SNF 6 12 $164,526 $13,711 3 25% SNF 7 11 $255,124 $23,193 2 18% SNF 8 11 $91,230 $8,294 1 9% SNF 9 10 $115,235 $11,524 3 30% SNF 10 8 $152,134 $19,017 0 0% SNF 11 7 $48,256 $6,894 2 29% SNF 12 6 $44,120 $7,353 1 17% SNF 13 4 $56,125 $14,031 0 0% SNF 14 3 $14,597 $4,866 1 33% SNF 15 4 $39,256 $9,814 0 0% SNF 16 3 $13,021 $4,340 1 33%
  • 85.
  • 86.
    Post-Acute Care Network HHA# Episodes Total Payment Average Payment Readmissions Readmission Rate Our own HHA 132 $422,123 $3,198 12 9% Competitor 22 $93,213 $4,237 4 18% Competitor 15 $87,456 $5,830 3 20% Competitor 12 $48,213 $4,018 3 25% Competitor 10 $35,124 $3,512 1 10% Competitor 9 $15,784 $1,754 2 22% Competitor 8 $23,549 $2,944 0 0% Competitor 7 $22,056 $3,151 5 71% Competitor 7 $18,452 $2,636 2 29% Competitor 7 $18,547 $2,650 0 0% Competitor 6 $18,213 $3,036 1 17% Competitor 6 $24,153 $4,026 1 17% Competitor 5 $17,918 $3,584 0 0% Competitor 4 $72,123 $18,031 1 25%
  • 87.
    Post-Acute Networks Why apost-acute network? • Ensures best quality/performance • Creates standardized/compliant care • Develops competition toward improvement How to create the network? • Formal selection process • Internal input to performance metrics • Open to everyone
  • 88.
    Post-Acute Networks Challenges • Timeframe •Internal pushback • External pushback Sample performance criteria • Reduction in LOS • Reduction in readmissions • Adherence to our protocols/pathways
  • 89.
    Post-Acute Networks Special considerations •Understanding of PAC drivers • Limitations and capabilities • Hospital support of PAC needs • Integration; e.g., your staff in their facility
  • 90.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 91.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 92.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 93.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 94.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 95.
    Agenda The CJR program Whatit means to you What to do right now Understanding the data Post-acute networks
  • 96.