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Update on Payment Reform and Changing Models
- 2. www.archwayhealth.com Contents • About Archway Health • Payment Reform Update • Bundled Payment Overview • Six Steps to Success • Case Studies • Getting Started • Q & A 2
- 3. www.archwayhealth.com Archway Health – Making Bundled Payment Simple 3 Unique team of healthcare operators, big data analysts, tech developers We are a Convener in the CMS BPCI program & we support other BPCI Conveners Currently working with over 50 providers of all types (Hospital, Physicians Groups, SNFs, HHAs) to manage their bundled payments programs. Built a comprehensive bundled payment platform including: Patient Tracking, Web-based Claims Data Analytics, Advisory Services, Preferred Provider Networks & Risk Sharing Focus To Partner with providers & payors to execute bundle payment programs Mission To fix healthcare through payment reform
- 4. www.archwayhealth.com Payment Reform Update • CMS Better, Smarter, Healthier Initiative • 50% of Medicare spending moving into alternative payment models by 2018 • Focus on ACO’s and Bundled Payment programs • Over $350 billion in Medicare spending • CMS is also encouraging private purchasers to participate • Group of Major employers & insurers commit to shifting 75% of their purchasing to alternative models by 2020 • Anthem Blue Cross shifting $38 billion to value based purchasing 4 Medicare is leading the way toward payment reform.
- 5. www.archwayhealth.com Payment Reform Update Alternative Payment Programs Overview Programs # of Participants Medicare ACO’s • Global cap • PCP attribution • Shared Savings • Pioneer • Next Gen • 333 • 19 • 21 Medicare Bundled Payment • Acute care focused • Episodic management • BPCI • CJR • OCM • 1,520 • 800 • 100 Commercial Initiatives • Generally smaller programs • Regional variation • Growing • Mostly global cap • Bundles emerging • 132 plans w/ ACO contracts • @40 plans with bundle contracts 5 Payment Reform Activity There are a myriad of ACO and bundled payment programs being implemented across the country.
- 6. www.archwayhealth.com Payment Reform Update 6 Fee-for-Service Pay-for-Performance Select Bundles Global Cap Global Cap + Bundles Provider Driven Demand Consumer Driven Demand Specialist engagement & accountability, driven by bundled payment initiatives, have the potential to reduce trend even further within traditional global cap programs. Shared Savings Bundle-Driven PPO Payment Reform Value Progression
- 7. www.archwayhealth.com Payment Reform Update 7 Orthopedics Hip & Knee Replacement Spine Procedures Sports Procedures Urology TURPs Bladder Surgery UTI Obstetrics Normal Deliveries High Risk Deliveries Neonates Gastroenterology Endoscopy Bowel Obstruction Cholecystectomy Cardiology AMI CABG/PTCA CHF Cancer Breast Lung Colorectal Chronic Care Diabetes COPD CHF Bundled Specialty Services The majority of healthcare costs are controlled by specialists and downstream providers. • Primary Care Services • Population Health • Wellness Management • Referral Management Accountable Care Organization Un-Bundled Specialty Care High Cost Outliers Catastrophic Events Out of Network Care Other Services 60-70% of the premium dollar
- 8. www.archwayhealth.com Bundled Payment Overview 8 Bundled payment programs create unique new opportunities for specialists, acute and post-acute care providers to benefit from improved care transition and coordination efforts. • Providers responsible for the full episode of care • Episode prices established up front • Meet episode specific quality metrics • Coordinate care along the continuum • Track patient progress • Respond to “red alerts” when patient has complications • Opportunity to access new revenue sources Provider as Healthcare “General Contractor”
- 9. www.archwayhealth.com 9 Major Joint Replacement (DRG470) Bundle Price Benchmarking 90 Day Episode $9,400 We often see significant variation in the cost of a bundle across providers, clinical conditions and regions. $8,400 $7,800 $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 DME LTCH IRF SNF HHA Readmission Out-patient Part B Index Hospital Bundled Payment Overview - Searching for the Best
- 10. www.archwayhealth.com dterry@archwayha.com 10 Enhances long term relationship with patients Significantly increase net revenue per Major Joint Case Increase Net Revenue Opportunity to enhance physician alignment & loyalty Enhance Physician Alignment Low risk way to prepare for other alternative payment initiatives Low Risk Facilitates development of a network of preferred post-acute provides Network Development Increase Patient Satisfaction Bundled Payment Overview Provider Strategic Alignment There are a number of strategic benefits for providers to participate in bundled payment programs.
- 11. www.archwayhealth.com 11 Archway has simplified the bundled payment management process into 6 key steps. 6 Keys to Bundled Payment Success 1 Opportunity Assessment 2 Preferred Provider Network Development 3 Simple Care Management Process 4 Real Time Patient Tracking 5 Claims Data Analytics 6 Integrated Performance Dashboard 6 Steps to Success in Bundled Payment
- 12. www.archwayhealth.com Step 1: Opportunity Assessment 12 Provider Benchmark Analysis Benchmarking analysis helps identify all types of opportunities for improvement.
- 13. www.archwayhealth.com Step 1: Opportunity Assessment 13 It is also important to drill into the key drivers of episode cost. Drivers of Cost
- 14. www.archwayhealth.com 14 We combine cost, quality, and discharge planner information to develop a preferred provider network. 90 day Hospital-Initiated Bundles from 1/1/2014 - 12/31/2014 0.40 0.40 0.10 0.10 Facility Episode Volume LOS Score Readmit Score Facility Cost Score Episode Cost Score Overall Star Rating Collaboration Total Score LAKE VIEW REHABILITATION & NURSING CENTER 120 0.74 0.46 0.73 0.85 2 2 0.64 OCEAN VIEW REHABILITATION & NURSING CENTER 123 0.69 0.80 0.75 0.87 3 1 0.76 MOUNTAIN VIEW REHABILITATION & NURSING CENTER 135 0.67 1.02 0.58 0.77 3 3 0.81 FOREST VIEW REHABILITATION & NURSING CENTER 147 0.84 0.87 0.85 0.93 4 3 0.86 CITY VIEW REHABILITATION & NURSING CENTER 137 1.14 0.55 1.15 0.93 4 2 0.89 ELMSTREET REHABILITATION & NURSING CENTER 150 1.41 0.57 1.22 0.94 3 2 0.92 OAK STREET REHABILITATION & NURSING CENTER 140 1.03 0.85 1.04 1.05 5 5 0.96 MAIN STREET REHABILITATION & NURSING CENTER 112 0.80 1.19 0.72 1.22 5 5 0.99 Score Weight Example Hospital - Skilled Nursing Facility Analysis Step 2: Preferred Provider Network Preferred Provider Network Development
- 15. www.archwayhealth.com 1. Where are my patients today? 2. Are they on track with their care plan? 3. Are we on budget? 4. Do we need to intervene to help the patient get back on track or change the care plan? Step 4: Real Time Patient Tracking 15 BPCI program management is simple if risk bearing providers can answer the following 4 questions.
- 17. www.archwayhealth.com Step 4: Real Time Patient Tracking 17 10 Second Updates The Carelink dashboard is populated by 10 second updates from downstream providers and family caregivers.
- 19. www.archwayhealth.com Benefits for AL & IL Facilities Occupancy • Additional referrals from : • Hospital/ACO discharge planners • Inclusion on provider of choice LTC list Length Of Stay Family & Resident Satisfaction Differentiation/Bra nd Pricing Power • Increased focused on care management and improving chronic disease management reduces movement to higher acuity settings • Ability to command a market premium due to increased facility demand, better quality of care and outcomes, and resident and family satisfaction • Recognition by acute providers, community, other key influencers as a premier provider • Development as a forward thinking, innovative long term care provider • Increased communication and visibility on resident’s care, health and wellness • Focus on improving depression, isolation, chronic condition symptom management There are a number of ways for senior living facilities to benefit through participating in risk programs.
- 20. www.archwayhealth.com Case Studies – CCRC Led Bundled Payment Network 20 • Offer post-acute care management to risk bearing ACO’s • Increase market share through preferred provider relationships • Walk the walk – “We’re taking risk too” • Earn gainshare revenue • Learn & build infrastructure • Recruited network leadership team • Growing the network • Building preferred partnerships with BPCI/ CJR hospitals & ACO’s • $100,000+ gains in first quarter Goals & Approach • Network of 12 SNFs and 1 HHA in BPCI program • Led by 2 large CCRC participants • Full post-acute continuum coverage • Very active alternative payment market • Strong central leadership & vision Program Description Results So Far
- 21. www.archwayhealth.com Case Studies – Model 2 PHO 21 • Develop specialist driven risk program • Earn referrals from risk bearing, PCP driven ACO’s • Develop specialty focused compensation model • Earn gainshare revenue • Learn, build infrastructure, access data • Developed preferred SNF network – from 32 down to 9 • Super sophisticated data team • Case management team moving outside hospital • 7 figure gains in first quarter • Developing commercial program Goals & Approach • Program led by Physician – Hospital Organization (PHO) • Specialty driven system – small PCP network • Large program - 3,000 bundled patients per year • Ortho surgeons, Hospitalists key participants • Strong case management team Program Description Results So Far
- 22. www.archwayhealth.com Case Studies – Orthopedic Surgeon Program 22 • Control the care of their patients • Stay engaged from pre-op until the patient is home & well • Improve outcomes • Earn gainshare revenue • Develop commercial bundles • Improved patient satisfaction • Initiated pre-surg home visits • 70% reduction in SNF days • Reduction in readmits • $2,000 - $4,000 in new revenue per case • Developing commercial joint bundle Goals & Approach • Surgeon initiated bundles • Major joint replacement only • Focused on reducing SNF stays and days • Some readmission opportunity • Physicians taking majority of the upside & the risk Program Description Results So Far
- 23. www.archwayhealth.com • Market Assessment – how much risk activity is there? • Opportunity Assessment – where do we stand? • Be proactive – approach big risk bearing providers • Stand out • Better data • Better performance • Great Communication • Patient tracking Getting Started 23 Key steps to getting started in a bundled payment program.
- 25. www.archwayhealth.com Bundle Payment Initiatives Market Size Key Participants* Bundled Payment for Care Improvement (BPCI) - CMS • 6,700 applicants • 1,520 participants • $8-10B of healthcare spend* • 720 Skilled Nursing facilities • 410 Hospitals • 180 Hospitalists groups • 100 Orthopedic groups • 100 Home Health Agencies Oncology Care Model (OCM) - CMS • 125 applicants • $2B in HC spend* • Oncology groups • Hospital systems w/Cancer services Comprehensive Care for Joint Replacement (CCJR) - CMS • 800 Hospitals • $3B in HC spend* • All Hospitals in 67 MSAs State Programs • Hundreds of Millions • States: OH, TN, AK • Specialties: Ortho, OB, Geriatrics Commercial Market • Billions • Self-Insured Employers • Health Plans • ACOs • Unions * Estimated based on publicly available information Bundled Payment Overview CMS Better, Smarter, Healthier Initiative • $300B of Medicare spend in alternative payment models by 2018 • Also encouraging commercial plans to participate Medicare is pushing aggressively toward new payment models, with bundled payment playing a key role. 25
- 26. www.archwayhealth.com Bundled Payment Overview 26 1. Provider case management teams can and want to do this • Don’t outsource care management 2. Collaborate closely with preferred providers 3. Real time patient information is essential • Don’t wait for interoperability 4. Integrate care management & claims data to track performance • Don’t wait for claims data run out 5. Don’t overpay for risk protection • CMS provides some of this for free 6. Keep it simple Bundled Payment Principles for Providers At Archway we have developed a number of principles for how we like to approach bundled payment programs and tools in partnership with providers.
- 27. www.archwayhealth.com dterry@archwayha.com 27 Dashboard Screen Shows highlights of your overall program, including 1) Overall cost breakdown 2) Total Program Summary 3) Length of Stay Trend for SNFs *Sample data shown Easy one-click access to all reports Keys to Success - 5. Claims Data Analytics Archway Analytics provides access to detailed claims data reporting via the web. Web-Enabled Claims Data Analytics
- 28. www.archwayhealth.com dterry@archwayha.com Keys to Success – 1. Opportunity Assessment 28 Financial Performance Estimates Hospital Annual Historical Volume Program Size ($M) Estimated CJR Price Historical Hospital Cost Status Quo Vs MSA Benchmark Vs Archway Best Practice A 617 $16.0 $24,740 $25,939 $(739,961) $1,850,761 $2,521,440 B 100 $2.6 $24,895 $26,172 $(127,057) $313,917 $422,074 C 26 $0.9 $30,794 $35,020 $(107,772) $230,870 $258,589 D 61 $1.5 $24,156 $25,063 $(55,344) $147,351 $213,658 E 5 $0.2 $27,972 $30,788 $(14,078) $31,162 $36,597 F 32 $0.6 $19,212 $17,647 $49,284 $49,284 $77,079 G 317 $6.9 $21,941 $21,740 $63,378 $63,471 $407,507 H 327 $6.9 $21,552 $21,158 $128,761 $128,761 $474,164 Source: Archway Medicare Claims Database Memphis Hospital CJR Risks & Opportunities 90 Day Performance for DRG 470 Hospitals have significant opportunity to earn new revenue in a well managed CJR program.
- 29. www.archwayhealth.com Searching for the Best - Select Analytics 29 OCM Opportunity Analysis by Cancer Type 6 Month Episodes There is also broad variability in the cost of cancer care
- 30. www.archwayhealth.com Searching for the Best - Select Analytics 30 Skilled Nursing Facility Mean Episode Costs 90 Day Episodes We have also seen dramatic differences in historical performance of Skilled Nursing Facilities.
- 31. www.archwayhealth.com 31 We see significant variation in bundled performance across post acute providers. 0 10 20 30 40 50 60 70 NumberofSNFs Total Episode Cost Example: 28 SNF’s with total episode cost between $15k-$16k MEAN: $18,929 MEDIAN: $19,213 STD. DEV: $3,345 CV: 0.18 Distribution of Skilled Nursing Facility Performance Average 60 Medicare Day Cost/Patient Source: Archway Medicare Claims Database Keys to Success - 2. Preferred Provider Network
- 32. www.archwayhealth.com 32 Keys to Success - 3. Care Management Process INACT Care Management Process Steps Description 1. Identify Identify patients in bundled payment programs 2. Notify Notify patients they are enrolled in a bundled payment program 3. Assess Assess patients to determine if they are Low, Medium or High risk for complications 4. Care Plan Develop a 90 day care plan that maps out key transition steps across the episode 5. Track Track patient progress as they transition from hospital to home Archway has collaborated with participating providers to develop a simple bundled payment care management model that is working well in the market.
- 33. www.archwayhealth.com 33 Bundled Payment Performance 5 Keys to Success - Results This 5 step process is leading to significant savings within our live BPCI programs. 11.4 3.4 - 2.0 4.0 6.0 8.0 10.0 12.0 Baseline Period BPCI Performance Period • Increased patient satisfaction • 85%+ provider compliance with INACT process • Reduced readmissions • 9-17% reconciliation savings Average Skilled Nursing Days/Case Overall Results
- 34. www.archwayhealth.com dterry@archwayha.com • Patient reported health status • Patient goals • Physical function • Quality of life • Clinical measures • Complications • Readmissions • Key clinical stats • Patient satisfaction • Provider communication • Overall experience • Employer measures • Back to work • Physical function 34 Source: International Consortium for Health Outcomes Measurement (ICHOM) ICHOM Standard Metrics Bundled payment enables focused, condition specific quality and outcomes measures. Condition Specific Quality Metrics Searching for the Best – Quality Metrics
- 35. Questions & answers B.C. Ziegler and Company is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site: www.nasba.org.Attendees are eligible to receive up to 12.0 credits for attendance at the 2016 Ziegler LeadingAge National Senior Living CFO Workshop. No prerequisites or advance preparation are required for this group-live educational conference. Program level is basic. For more information regarding administrative policies such as complaint and refund, please contact our offices at 312-705- 7262.Fees for this workshop are detailed on the registration form. ©2016 B.C. Ziegler and Company | Member SIPC & FINRA