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CMMI Remains Bullish Regarding Timeline for CJR and Value-Based Payments (and Rightfully So!)

Posted by Matthew Smith on Nov 19, 2015 2:27:19 PM

By Deirdre Baggot, Ph.D., Senior Vice President, GE Healthcare Camden Group

bp.jpgDespite increased pressures to postpone  the start of the Centers for Medicare & Medicaid Services' ("CMS") first mandatory bundled payment, the Center for Medicare and Medicaid Innovation ("CMMI") announced Monday, November 16, that they would, indeed, proceed with the Comprehensive Care for Joint Replacement ("CJR") program. This decision connotes a new level of accountability and commitment to upending the traditional orthodoxies that have governed U.S. healthcare. With CMS’ track record for delaying the tougher policy decisions, we are pleased to see that there is something more than ambition here. We have an obligation to fix the over-testing and over-treating that is pervasive in fee-for-service. It’s not only about creating new value, it’s also about doing the right thing for the American public, and I applaud the team at CMMI.

Patients historically have resisted price competition in the healthcare industry. This was validated in our work testing bundles with the CMS Acute Care Episode (“ACE”) Bundled Payments Demonstration. Prior to going live with the ACE pilot, we conducted focus groups with patients regarding bundles or fixed pricing strategy. Overwhelmingly, the data revealed in 2009 that patients associated lower prices with less care or lower quality care. A number of factors are contributing to a shift in the way patients view price competition. Digital ubiquity, transparency, and smart technologies have enabled patients to see that they weren’t getting more—they were just paying more.

With major joint replacement procedures being the most commonly performed procedure for Medicare beneficiaries, it makes sense that CMMI would begin with this population. We should expect to see continued movement in areas such as CRM (cardiac rhythm devices), and other high-spend areas for Medicare such as chronic conditions and outpatient procedures.

The following questions and answers provide insight into the CMS decision and what it means for providers as the program launch nears.

Q: Is proceeding with the CJR program a positive step at this time?

Yes. Without a doubt. It is evidence that the “New Deal” in U.S. healthcare is taking hold.

Q: When is the CJR program officially launching?

CMS announced that the program would begin April 1, 2016, instead of the originally proposed date of January 1, 2016.

Q: What about providers who worry that they aren't ready for the move to value-based payments?

If providers are asking for more time, I would suggest that they are asking the wrong question. New, smart technologies, digital ubiquity, and transparency are contributing to the transformation we are seeing right before our eyes. Further protracting the move to value-based payments is not good for consumers and not good for the economy. For providers worried that they aren’t “ready” and need more time, they need to remember that there is zero downside risk in year one.

Additionally, we need let go of this notion of being “ready.” Ready for what? Failure tolerance is what is needed. We don’t need perfect (which is good because the U.S. healthcare system is far from perfect. Think failure tolerance. Think about failure as nothing more than a data point and move on with the business of creating new value. The head in the sand approach will result in someone else raising their hand to do it better, faster, and cheaper. And if the question is really about managing demand destruction, I would recommend leaning in and taking it head-on. Yes, we already know that demand destruction will occur, particularly in areas such as diagnostics and therapeutics, IRF and SNF utilization, any area where one cannot justify the value of the services provided against the relative cost. Market advantage means taking this on NOW. Bundles aren’t the end game; they are a low-entry point on the path to managing total cost of care.

Q: With the CJR program moving forward, what would be the next logical programs to launch?

We should expect to see continued movement in areas such as CRM and outpatient procedures such as colonoscopy. Beyond the Medicare population, we are seeing interest in maternity care bundles across several Medicaid programs and recent movement in pediatric orthopedic bundles as well as oncology among commercial payers. Employers remain focused on high-end cardiology, cardiac surgery, bariatrics, orthopedics and spine. The take-away message? Follow the money.

CJR is aligned with Health and Human Services' commitment to reward providers for providing the highest quality of care in the most cost effective setting as compared with fee-for-service, which can reward over-testing and over-treating.

Q: Are the original 75 metropolitan statistical areas ("MSAs") still intact? 

CMMI announced in the final ruling that the number of metropolitan statistical areas ("MSAs") required to participate had been reduced to 67 markets. The reason for this is that while originally CMS had identified 75 MSAs that would be required to participate in this mandated bundle, after applying the Bundled Payment for Care Improvement ("BPCI") exclusions, a handful of markets no longer qualified. Specifically, when counting the number of CJR episodes in a region, they excluded episodes that were at Model 2 lower extremity joint replacement ("LEJR") hospitals as of October 1, 2015 (previously it was July 1, 2015). Additionally, when counting the number of CJR episodes in a region, they did not count episodes that would be accruing to a BPCI participating physician group practice. These two changes meant that the eight MSAs in question no longer met the MSA eligibility criteria, thus they are no longer subject to the mandate. The table of excluded MSAs can be found below and on page 76 of the final rule.

MSAs-1.png

Q: Where can I find a copy of the final rule?

The final rule may be found here: http://cdn2.hubspot.net/hubfs/161605/CCJR_Final_Rule.pdf

CJR Final Rule, GE Healthcare Camden Group


baggot_headshot.pngMs. Baggot is a senior vice president with GE Healthcare Camden Group and is a former CMS Expert Reviewer for BPCI and former lead for CMS Acute Care Episode Demonstration. Ms. Baggot is a frequently invited keynote speaker on payment reform and bundled payments. She has authored more than 20 papers on bundled payments, healthcare reform, and payment transformation, and has been a featured expert on National Public Radio’s Morning Edition, All Things Considered, and Planet Money. She may be reached at dbaggot@thecamdengroup.com or 303-335-7047.

 

Topics: Bundled Payments, Deirdre Baggot, Medicare Reimbursements, CCJR, CJR

Mandated Bundled Payments Compel Hospitals to Rethink Post-Acute Care

Posted by Matthew Smith on Oct 26, 2015 3:55:30 PM

By Deirdre Baggot, Ph.D., Senior Vice President, and Andy Edeburn, MA, Vice President,                       The Camden Group

Bundled Payments

Medicare's Comprehensive Care for Joint Replacement ("CCJR") program signals an evolution in payment that demands a strong strategic response from hospitals and health systems.To this end, hospitals should monitor the performance of their post-acute care partners using performance measures established with input from the partners. Measures such as complication rates, length of stay, and readmission rates (i.e., major drivers of cost) should be monitored and reported in as close to real time as possible. Additional measures such as patient experience of care, ancillary use, and physician utilizational so should be tracked, but with the understanding that they are secondary to the economics of the bundle.

Cross-continuum bundles succeed when there is concurrent information exchange through technology leveraged across settings and providers. A checklist can serve as an easy first-phase approach to ensure smart execution, especially when systems are not yet talking. Although systems to effectively track and monitor measures ideally will involve integration among health information platforms that capture actual utilization and cost data, most post-acute care measurement is likely to be manual or self-reported.

Click the button below to read this article in full at hfma.org

Bundled Payments, CCJR, The Camden Group, HFMA

(Introductory paragraphs courtesy of HFMA)

Topics: Bundled Payments, Deirdre Baggot, Post-Acute Care, Andy Edeburn, CCJR

The Bundled Payment Imperative: CMS Moves Closer to a Mandate

Posted by Matthew Smith on Jul 13, 2015 6:41:46 PM

By Deirdre Baggot, PhD, Former CMS Expert Reviewer, Bundled Payments for Care Improvement Initiative, Senior Vice President, The Camden Group

Kimberly Hartsfield, MPA, Vice President, The Camden Group

Bundled Payments, CMS, Joint ReplacementRapidly following on the heels of its oncology bundles announcement, the Centers for Medicare and Medicaid (“CMS”) announced on July 9 a new proposed mandate for a 90-day retrospective bundled payment model. This model impacts Medicare beneficiaries receiving lower extremity joint replacement or reattachment of lower extremity procedures, in the 75 designated geographic areas. Modeled after the Bundled Payments for Care Improvement (“BPCI”) program and evidenced by the Acute Care Episode (“ACE”) demonstration project, CMS puts forth that the Comprehensive Care for Joint Replacement (“CCJR”) model aims to improve cost efficiencies, patient outcomes, and collaboration among various types of providers for an episode of care.

Key Program Components

  • Only hospitals and health systems are eligible to “own” the bundle. Physicians and physician groups are not eligible to “own” the bundle. Financial liability for the 90-day episode is assigned to the hospital.
  • 90-day retrospective bundle
  • Joint replacements only
  • Gainshare waiver is available
  • No downside risk in year one
  • Five-year term (as compared with a three-year term for BPCI)
  • No lengthy or costly application process (relative to CMS bundled payments pilots)
  • BPCI participants are excluded from mandatory participation
  • Similar to the Medicare Shared Savings Program, there are minimum quality performance measures that must be achieved in order to be eligible for payment reconciliation.

Defining the Impact on Providers

The overall impact of bundled payments will be demand destruction related to unnecessary testing and treatments. Providers should expect to see:

  • reduced inpatient diagnostic testing
  • shorter lengths of stay
  • reduced avoidable readmissions
  • significant decline in inpatient rehab and SNF utilization
  • closer scrutiny related to supply cost and physician preference items

Bundled payments motivate a new set of behaviors for physicians aimed at giving patients exactly what they need in the most cost effective setting and nothing more.

This is a retrospective bundle so the impact on day-to-day claims processing operations will be minimal. All hospitals participating in the CCJR program will continue to be paid Medicare fee-for-service payments under the Inpatient Prospective Payment System, and subject to yearly reconciliation against a set target price. The proposed rule states that hospitals that perform better than the target price will only be eligible for a positive reconciliation payment if the mandatory quality metrics are achieved, such as complications, readmissions, and patient experience measures. Similarly to BPCI, in the first year of CCJR, participating hospitals will not face any downside risk.

Other features of the CCJR model are similar to BPCI in terms of permissible waivers and the alignment of care redesign with potential gainshare payments to physicians. The 439-page proposed rule is open for public comment, which closes September 8, 2015.

Determining the 75 Markets

The selected markets were chosen because they represent a high density of Medicare recipients. CMS excluded regions that did not have sufficient volume of DRGs 469 and 470, as well as regions with very high BPCI penetration. CMS was left with just under 200 regions, from which they selected 75 of those 200. In addition, CMS differentially selected higher cost regions more often than lower cost regions (in terms of the average hip replacement episode cost). The 75 markets represent approximately 800 hospital providers.

Start Date and Eligible Providers for Mandatory Joint Replacement Bundles

The initiative is proposed to begin January 1, 2016, and would be in place for 5 years. The CCJR model will target lower-extremity joint replacement (“LEJR”) episodes for Medicare Severity-Diagnosis Related Groups 469 and 470. Similar to Model 2 in the BPCI program, the episodes of care will be initiated upon inpatient admission to an acute care hospital and include all related post-acute care for 90 days post-discharge. Only acute care hospitals will be eligible to be episode initiators under the CCJR program, as compared with other types of entities participating in BPCI such as physician group practices and post-acute providers. Given that this is a proposed mandate, there will be no enrollment or application process involved for eligible hospitals to participate. CMS has stated in the proposed rule that the CCJR is not an extension of BPCI itself, and will not impact hospitals that are currently live with LEJR episodes in the BPCI program.

Required Minimum Quality Reporting to be Eligible for Savings Pay Out

There are two quality aspects that are important to payment under this initiative:

  1. Hospitals must meet a certain threshold on three specific quality measures (30th percentile in years 1-3 and 40th percentile in years 4-5) in order to qualify for a reconciliation payment. If they do not meet the threshold, they are not eligible to receive a reconciliation payment. The National Quality Forum (“NQF”) measures are as follows:
    • NQF 1551: Hospital-level 30-day, all-cause risk-standardized readmission rate following elective primary total hip arthroplasty (“THA”) and/or total knee arthroplasty (“TKA”)
    • NQF 1550: hospital-level risk-standardized complication rate following elective primary THA and/or TKA
    • NQF 0166: HCAHPS survey
  2. If hospitals elect to submit THA/TKA voluntary data (a patient-reported outcome-based measure) as requested by CMS, the discount percentage applied to calculate their target will be reduced by 0.3%

For acute care hospitals within the 75 MSAs, especially those not currently participating in a payment reform initiative of this kind, this proposed rule represents a clear signal regarding CMS’s commitment to using bundled payments as an alternative to fee-for-service reimbursement.  Very consistent with CMS’s approach to policy change—carrot first and then the stick—all prior bundled payments pilots were voluntary whereas this initiative is mandatory. Last week’s announcement will press providers to accelerate their efforts to lock into a post-acute network.


Ms. Baggot is a senior vice president with The Camden Group and is a former CMS Expert Reviewer for BPCI and former lead for CMS Acute Care Episode Demonstration. Ms. Baggot is a frequently invited keynote speaker on payment reform and bundled payments. She may be reached at dbaggot@thecamdengroup.com or 303-335-7047.

 

 

 

Ms. Hartsfield is a vice president with The Camden Group. She specializes in payment transformation strategies with a focus on designing and implementing Medicare and commercial bundled payments. She frequently presents on a variety of topics including value-based payment models and provider engagement. She may be reached at khartsfield@thecamdengroup.com or 501-940-2526. 

 

 

Topics: Bundled Payments, Deirdre Baggot, Kimberly Hartsfield, BPCI, Medicare Bundled Payments, CCJR

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