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GE Healthcare Camden Group Insights Blog

MACRA Final Rule Released Revealing Changes

Posted by Matthew Smith on Oct 17, 2016 10:09:29 AM

MACRA_Image.pngThis past Friday morning, October 15, 2016, the Department of Health and Human Services released its final rule (with a comment period) on the Quality Payment Program ("QPP"), a part of the Medicare Access and CHIP Reauthorization Act of 2015 ("MACRA").

The QPP has two tracks: the Merit-Based Incentive Payment System ("MIPS") and the Advanced Alternative Payment Model ("APM").

Compared with the proposed rule, the main changes in the final rule include:

  • support for small and independent practices
  • expansion of APM opportunities
  • flexible 2017 reporting options
  • a focus on a unified program that supports clinician-driven quality. 

CMS launched a new Quality Payment Program website where the final rule, along with educational material, can be found. This website will be a great resource for eligible clinicians as they rollout QPP activities in 2017. 

For More Information:

Learn more about the details of the final rule in GE Healthcare Camden Group's webinar: "Chart Your Course for MACRA Success" this Thursday, October 20th. To register for this complimentary webinar, please click the button below.

Webinar, MACRA

Topics: CMS, Final Rule, MACRA, MIPS, QPP, APM

Truth Be Told: What CMS Doesn’t Tell You About the Medicare Shared Savings Program

Posted by Matthew Smith on Sep 28, 2016 11:10:56 AM

By Megan Calhoun, MS, MSW, Manager, and Andy McNerney, Manager, GE Healthcare Camden Group


Secrets.jpgWhen the Centers for Medicare & Medicaid Services ("CMS") launched its Medicare Shared Savings Program ("MSSP") in 2012, CMS leveraged the upside, risk only-design and the opportunity to be a care model redesign champion. It also intended to lead the market in value-based care delivery as a way to entice ACOs to join the program. Four years and 539 accepted MSSP ACOs later, CMS released its most recent set of performance results for the 80 percent of ACOs that have survived the program.

While savings of more than $429 million and overall quality improvement sounds like cause for celebration, the real story begins by acknowledging that program success doesn’t come easily and requires hard and transformative work…just ask the almost 70 percent (n=272) of MSSP participants who failed to achieve a shared savings distribution. Even for those participants that did achieve program savings, it is likely that the set-up and operating costs associated with the ACO program threatened bottom line financial success…today. But care transformation is not just about today’s bottom line, is it? Program veterans, or those who have participated for more than one Performance Year, have shown that it takes years to truly make an impact on cost and quality. The rest of the story will be written by their continued success as they gain a strategic advantage and encourage other providers to invest in their own transformation.

ACO_MSSP.png

If CMS Isn’t Telling the Whole Story, Define and Measure Your Own Success!

Participation in the MSSP is not only an opportunity to impact select quality metrics and recuperate some dollars lost as a result of reduced unnecessary utilization. It is a long-term strategic play to prepare for the not so distant future when up- and down-side risk taking will be the norm, not the exception. The data provided from CMS through the MSSP program is neither real-time nor risk-adjusted, making it extremely difficult for ACOs to assess their performance. In addition, the influx of participants makes it challenging to track and trend an ever-moving target. Furthermore, performance on quality measures is not released to the ACOs until Quarter 2 of the following performance year.

This leaves the ACO limited time to review performance, establish initiatives, and implement efforts to improve outcomes. ACOs need to develop a mechanism by which they can continuously monitor overall cost of care and performance on the established quality measures so that they are not relying on CMS to report on their progress. Instead, continuous process improvement and measurement needs to be the new normal in preparation for a time when CMS will not be the only value-based contract in place. The amount of shared savings achieved, the level of patient satisfaction, and the quality outcomes delivered at the end of each Performance Year should not be a surprise, but all too often it is!

The Focus On Quality Should Go Beyond MSSP Attributed Lives!

The overall quality improvement shown by the MSSP ACOs indicates a program-wide commitment to improved health outcomes that should be applauded. These measures focus on patient satisfaction, reduction in avoidable utilization, preventive care, and evidence-based protocols for at-risk populations. Successful performance on many of these measures requires substantial data aggregation and analysis and proactive outreach to MSSP ACO patients. Where many ACOs falter is by laser-focusing on only the MSSP population; those beneficiaries assigned to the MSSP receive proactive preventative care while other patients are overlooked.  While this can be a successful short-term strategy (particularly when resources are limited or information systems have not yet have matured), operationalizing it is a challenge and this approach will not position the organization for long-term success.

Quality outcomes initiatives should be inclusive of all patients, regardless of payer, to demonstrate that your model of care can be scaled and to attract similar shared savings arrangements beyond CMS. The bigger problem is that care delivery does not just change for a given population and organizations are realizing that other payers are benefiting from their performance improvement efforts, which causes barriers to engage these providers in value-based contracting because the organization is producing results that are benefiting the payer without the compensation.

In 2015, CMS set a goal of having 50 percent of Medicare payments made through alternative payment models by 2018. Providers have responded through strong participation in programs such as MSSP, Pioneer ACO, and Bundled Payments and indications are that value-based payments will become the standard. If your organization embraces a value-based world, then program participation can be a good step towards building the necessary muscle. But only if you make a full organization wide commitment to the cultural change required to support care model redesign and do so with a customized definition of success; because unsuccessful participation may be even more costly to an organization than no participation at all.

Organizations who don’t take the time to invest in the appropriate care coordination resources will find that they have spent money on ACO staff, slightly reduced inpatient utilization (and therefore revenue), and receive no shared savings distribution to offset these costs. This can be a very frustrating result, leading to dissatisfaction with the program and disillusionment with care coordination. So, jump in! But don’t leave the necessary people, data, or innovation behind. 


Calhoun.jpgMs. Calhoun is a manager with GE Healthcare Camden Group and specializes in the areas of care management strategy and design, strategic and business planning analysis, accountable care organization applications, development and implementation, and the development of clinically integrated organizations. Ms. Calhoun has supported numerous clients with the completion of Medicare Shared Savings Program (“MSSP”) applications and implementation strategy and planning. She may be reached at megan.calhoun@ge.com.

 

mcnerney.jpgMr. McNerney is a manager with GE Healthcare Camden Group. His primary area of focus is bundled payments strategy, design, and implementation. Mr. McNerney also specializes in system and service line strategic planning and new business development for a variety of healthcare organizations. He may be reached at andrew.mcnerney@ge.com

 

 

 

Topics: MSSP, CMS, MSSP ACO, Megan Calhoun, Andy McNerney

Preparing for Episode Payment Models—Next Up: Cardiac Care Bundled Payments

Posted by Matthew Smith on Aug 15, 2016 9:53:21 AM

By Andy McNerney, Manager, GE Healthcare Camden Group

shutterstock_458338498.jpgCMS’s newly proposed Episode Payment Models (“EPM”), focused on cardiac care, is the second major push to mandate the national adoption of bundled payments’ in recent years. Perhaps your organization was spared as you watched 67 other markets forced to bundle joint replacements. If your reaction was only to feel lucky that you dodged the swipe of our government’s hand instead of better preparing your service lines for episode based care delivery, then it’s time to organize regardless of which markets are selected this time around. 

These cardiac mandates have been proposed under the umbrella of EPMs, and participation will qualify physicians towards Advanced Alternative Payment Models (“APMs”) credit suggests CMS’ intention to roll out more. Although a cardiac episode presents very different challenges than a joint replacement, the way your service line approaches the episode care design, standardization, and monitoring process is very similar. If you haven’t already started enabling your service lines to execute on a bundle, don’t wait for a government dart to land in your market to do so. Instead, start developing work teams responsible to design and standardize processes across the pre-acute, inpatient, and post-acute setting as well as work teams dedicated to the reporting and monitoring of outcomes and engagement of patients across the entire episode.

The Proposed Model

Three major components make up the mandatory EPM proposal:

1. Cardiac Bundles: Inpatient admissions will be paid under a bundled payment for Acute Myocardial Infarction (“AMI”) episodes and Coronary Artery Bypass Graft (“CABG”) episodes for the next 5 years as follows:

  • Episode length: 90 days post-discharge
  • Mandated Markets: 98 random markets (rural markets excluded)
  • Downside Risks and Gains: Phased in over time and max out at 20 percent in the final years
  • Target Price: Weighted to hospitals’ historical performance in year 1 and transitions to one regional price in year 5
  • Quality and patient satisfaction scores influence financial gain or downside risk

2. Cardiac Rehabilitation (“CR”) Incentives: CMS will incent cardiac rehabilitation services utilization post-discharge within the 90-day episode period through retrospective payments as follows:

  • First 11 CR Services post-discharge from CABG or AMI admission: $25
  • Remaining CR Services in 90-Day Episode: $175

3. CJR Addition: Surgery for Hip Fractures was added to the current CJR mandate and will only immediately affect those hospitals in CJR mandated regions.

Not surprisingly, the proposed cardiac bundles are designed with very similar objectives to the CJR bundles: reduce unnecessary utilization such as readmissions, incent discharge placement to the appropriate care setting, promote care coordination across providers, and improve quality through care model design and standardization. As such, organizations embracing this cross-continuum care delivery work for the first time should start by establishing work groups that represent the following four areas:

  • Inpatient Clinical Redesign: While some patients present as non-emergent cases, many are through the emergency department when episode expectations can’t be set in advance, as is done with pre-surgical joint placement classes. These cardiac episodes contain both surgical and medical care making physician engagement even more important. Form a work group now that identifies opportunities to improve quality and develop a standardized care approach. Consider the following representatives: cardiovascular surgeons, cardiologists, hospitalists, case managers, social workers, operating room leadership, supply and implant purchasers, emergency room physicians, and a strong physician lead driving change.
  • Post-Acute Care: Similar to CJR, a work groups’ time should be spent standardizing discharge placement protocols and identifying preferred providers (SNF, HH, IRF, Cardiac Rehab providers, and others) who commit to sharing data, adhering to best practice protocols, and meeting quality requirements. Much more important for cardiac bundles will be transitioning patients back to OP partners and processes dedicated to managing the chronic conditions that led to the original admission. Consider the following representatives: Post-acute care managers, SNFists, Cardiac Rehab clinicians, inpatient case managers, cardiac services line leaders, and other care coordinators.
  • Quality and Reporting: Monitoring your bundle performance as real-time as possible and ahead of the quarterly report from CMS will keep your care teams engaged and promote a culture of continuous improvement. Utilize representatives from finance and data / analytics to research dashboards and tools that help identify care delivery and cost variation and allow care coordinators to identify and track bundle patients in your system.
  • Patient Engagement: One major variable differs greatly to the CJR bundle—the patient population. Unlike an elective joint patient, this population has greater co-existing chronic conditions and will naturally have more unplanned services and complications which make achieving your objectives more unpredictable. Successfully engaging patients can make the difference and justifies the need for establishing a patient engagement work group. This work group should take a more social view and identify programs and tools to assist with adherence to treatments and medication management, compliance with Cardiac Rehab care plan and follow-up appointments, adherence to dietary and nutrition regimes, and social support services. This group may be an extension of other population health initiatives identifying high risk patients through risk assessment tools and empowers them with tactics and technologies to manage their recovery and prevention.

We recognize that resources are scarce, competing initiatives are many, and establishing work groups and initiatives without an actual mandate or direct incentive can be a tough sell. If you are not able to organize your operations and select service lines around the above work teams for the simple reason that it’s best for patients in your community, then do so under the assumption that bundles are here to stay, and the works needs to get done to succeed within them.    

Cardiac Care Bundled Payments


mcnerney.jpgMr. McNerney is a manager with GE Healthcare Camden Group. His primary area of focus is bundled payments strategy, design, and implementation. Mr. McNerney also specializes in system and service line strategic planning and new business development for a variety of healthcare organizations. He may be reached at andrew.mcnerney@ge.com 

 

 

 

Topics: Bundled Payments, CMS, Andy McNerney, Cardiac Care, Episode Payment Models

Three Prep Tips for Hospitals Preparing for CMS’ CJR Model

Posted by Matthew Smith on May 24, 2016 11:00:29 AM

Via Managed Healthcare Executive

Hips-and-Knees.jpgApril 1 marked the start of the CMS Comprehensive Care for Joint Replacement ("CJR") model, which the government agency hopes will support better and more efficient care for its beneficiaries undergoing hip and knee replacement surgeries, the most common surgeries among Medicare patients.

According to CMS, the rate of complications such as infections or implant failures can be more than three times as high at some facilities than at others—and that leads to hospital readmissions.

In 2014, there were more than 400,000 hip and knee replacement procedures, which cost $7 billion in hospitalizations alone. The cost to the government agency was an average of $16,500 to $33,000 for surgery, hospitalization, and recovery across geographic areas in this time period.

With the CJR model, participating hospitals are held financially responsible for the quality and cost of the surgical procedure, which starts when the patient is admitted and ends 90 days after their discharge from the hospital.

Prep tip 1: Focus on post-acute recovery decision-making

The biggest opportunity for hospitals and health systems involved in the CJR model is in the post-acute recovery space, says Andrew McNerney, consulting manager with GE Healthcare Camden Group.

To continue reading this article on the Managed Healthcare Executive website, please click the button below. You will be directed immediately to the full article (no form required).

CJR, Bundled Payments


mcnerney.jpgMr. McNerney is a manager with GE Healthcare Camden Group. His primary area of focus is bundled payments strategy, design, and implementation. Mr. McNerney also specializes in system and service line strategic planning and new business development for a variety of healthcare organizations. He may be reached at andrew.mcnerney@ge.com

 

 

Topics: Bundled Payments, CMS, CJR, Andy McNerney

Evolving Physician Reimbursement Structures: Moving the Medical Group to Value-Based Success

Posted by Matthew Smith on May 19, 2016 10:17:08 AM

By Cami Hawkins, MHA, Manager, GE Healthcare Camden Group (originally published in Journal of Healthcare Management, May-June, 2016)

Stethoscope-And-Dollars-Illust-2622496-resized-600.jpgNow that the Medicare Sustainable Growth Rate ("SGR") formula has been repealed, physicians and other providers must prepare for the Merit-Based Incentive Payment System ("MIPS"). This article addresses several important questions about evolving physician reimbursement structures and provides guidance on how to succeed under the new programs.

With the passage of the Medicare Access and CHIP Reauthorization Act, what changes can physicians expect with regard to payment incentive models?

Repeal the Medicare SGR formula and passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) are bringing about significant changes to the Medicare physician fee schedule and reimbursement methodology (Centers for Medicare and Medicaid Services ("CMS"), 2015). MACRA established annual positive or flat fee updates for ten years and implemented a two-track fee update thereafter. In addition, MACRA created MIPS and consolidated the current Medicare fee-for-service incentive initiatives. The law also provides a mechanism for physicians to participate in alternative payment methods, including the patient-centered medical home model and others to be defined. In repealing the SGR and passing the MACRA, Congress's intent was to move away from the fee-for-service payment methodology and toward a value-based payment system.

To continue reading, please download a PDF version of this article by clicking the button below. You will be directed immediately to the full article (no form required).

Value-Based Success


Hawkins_headshot.png

Ms. Hawkins is a manager with GE Healthcare Camden Group and has more than 20 years of experience in the healthcare provider sector as a management consultant. She specializes in the areas of practice operations, contract negotiations, benefits administration, reimbursement management, and market development. Ms. Hawkins assists a wide range of provider organizations, healthcare systems, and independent and employed physician groups with addressing issues impacting their overall performance and competitive positioning. Her key areas of expertise include strategic planning, population health strategy, and hospital/physician integrations. She may be reached at cami.hawkins@ge.com.

Topics: CMS, MACRA, Value-Based Payments, Cami Hawkins, MIPS, Physician Reimursement, Value-Based Success

MSSP and NGACO Application Windows Quickly Approaching

Posted by Matthew Smith on Apr 6, 2016 11:50:17 AM

By Daniel Juberg, Manager, GE Healthcare Camden Group

ACO News, MSSP, NGACOCMS recently launched the first step of the application process for its Next Generation ACO (“NGACO”) Model, and next month opens the window to apply for the Medicare Shared Saving Program (“MSSP”) Initiative. The NGACO, CMS’ newest two-sided risk model, accepted 21 organizations for 2016. The MSSP, which also added enhanced risk-based options in 2016, had 100 new ACO participants this year, bringing the total to 434 ACOs at the start of the year. These numbers reinforce CMS’ stated goal to move 30 percent of traditional Medicare fee-for-service payments into alternative value-based payment models by 2016, and 50 percent by 2018.

MSSP: Zero Downside Risk

The MSSP Model was introduced in 2012 as a key component of the Medicare delivery system reform initiatives found in the Affordable Care Act and a new approach in the delivery of health care intended to facilitate coordination among providers to improve the quality of care. Among the primary attractions of the MSSP was the option to participate with zero downside risk, meaning if organizations outspent their target expenditures, they would not be liable to repay the difference to CMS. Through Track 1 there existed only upside, or the ability to share in any savings generated, an appeal that the MSSP Model maintains to this day. This allows organizations to dip their toes in the accountable, value-based waters and develop the infrastructure necessary for future success while still participating in a fee-for-service environment today. And the participating organizations have largely voiced their approval of the program – more than two-thirds renewed their participation when their initial agreement ended in December.

NGACO: Higher Risk/Higher Rewards

While the MSSP Model was the right first step for many organizations beginning their journey towards value-based care, it was in many ways insufficient for more advanced organizations experienced in care management and risk-based contracting. Thus the Next Generation ACO model was born, providing a higher-risk, higher-reward alternative to the MSSP, while simultaneously responding to and improving upon its oft-maligned and challenged predecessor, the Pioneer Model, with a refined attribution process and enhanced benchmarking methodologies. Now organizations can select between two risk options from 80 to 85 percent on the shared savings option all the way to a full-risk opportunity. Now if organizations overspend their benchmark expenditures, they will have to cut CMS a check at the end of the year. This may seem daunting, but many organizations view this as the natural programmatic evolution and that the increased skin in the game can be the push their organization might need to really enact the necessary transformation. In fact, seven of the new NGACO participants came from the MSSP program, demonstrating the interest of existing program participants to advance their risk exposure and opportunity based on their work and success to date.

The NGACO, with its enhanced risk profile, is obviously not for everyone, which explains why only 21 were accepted in the past cycle. As stated above, the NGACO was effectively developed for those organizations with experience in commercial ACOs or with value-based contracts, or that had experienced success in the MSSP and had outgrown the less-lucrative risk arrangement. Accordingly, in addition to the seven MSSP converts to the NGACO program, eight made the transition from the similarly two-sided, but less favorable Pioneer model.

Deadlines Approaching

The good news for organizations wanting to prepare for a value-based future is that the 2017 application windows for both programs are upon us. Organizations contemplating their fit in either initiative can apply for one or both, but need to submit their Notice/Letter of Intent by the respective deadlines to be considered. These submissions are non-binding, so we encourage organizations at all considering participation to file one and then assess their options in the next few months. One caveat is that while organizations can simultaneously apply for both models, they will ultimately only be able to participate in one of the two initiatives.

The NGACO Letter-of-Intent is due May 2, with the MSSP Notice-of-Intent due May 31. Additional key milestones for both models can be found below:

NGACO_Milestones.png

With the continuous innovations of both payment and delivery models, CMS is maintaining its commitment to the transformative shift to value-based care. While that momentum is undeniable, not all organizations are necessarily ready for that transition just yet, particularly in the riskier models. We recommend undergoing a comprehensive (and candid) self and market assessment of your organization’s present situation and evolution in what GEHC Camden Group considers the eight core domains essential for clinical transformation to successfully thrive in a value-based world. A commitment must be demonstrated in the below key operational competencies in order to achieve success in the changing landscape.

Key_operational_competencies.png

CMS has reiterated its commitment to population health with its ongoing development and support of these accountable initiatives. Even more encouraging, CMS has demonstrated a willingness to adapt and improve to encourage participation and collaboration. The strongest healthcare organizations tend to be the ones that are proactive rather than reactive. For organizations that can see what’s coming down the tracks, there may be no better time than now to begin preparing for a value-based future.

 

Next Generation ACO

 


juberg_headshot.pngMr. Juberg is a manager with GE Healthcare Camden Group and focuses on clinical integration, transactions, and strategic and business planning for healthcare organizations. He has extensive experience with the development of ACOs (financial planning and funds flow modeling), managing Medicare Shared Savings Program applications, and implementing clinically integrated networks. He is also experienced in master facility planning, CMMI Innovation Center grants, medical group valuations, and community needs projections. He may be reached at daniel.juberg@ge.com.

 

Topics: ACO, MSSP, Population Health, CMS, Next Generation ACO Model, MSSP ACO, NGACO, Daniel Juberg

The Math Behind CJR: The Top 10 Calculations You Should Be Considering

Posted by Matthew Smith on Mar 23, 2016 3:14:44 PM

By Kelly Tiberio, Manager, and Barbara Letts, Senior Manager, GE HealthCare Camden Group.

blackboard.jpgIn a time when healthcare organizations can shop around for risk-based contracts, the Comprehensive Care for Joint Replacement (“CJR”) mandate creates uncertainty that has hospital C-suite executives cautious if not uncomfortable. “Calculated risk” isn’t an option in the CJR mandate; on the contrary, CJR creates a new paradigm of widespread accountability for the cost of episodic care that the country hasn’t seen before. In less than three weeks, nearly 800 acute care hospitals will begin their mandatory participation in the CJR mandate. While CMS has delayed risk to begin in performance year 2 of the program, the preparation for going at-risk starting January 1, 2017 should start now.

In evaluating their potential upside opportunity and downside risk as hand-picked participants in this program, healthcare executives would be wise to consider the various calculations they can—and should—be making to best understand their organizations’ probability of financial success in CJR. Consider these 10 practical calculations as your hospital or health system embarks upon the new CJR reality.

For illustration purposes, the calculations in this table use a $25,000 baseline price (before the CMS discount is applied) for a lower extremity joint replacement (“LEJR”).  Read about each calculation below the table.

(Click here for a larger image)

Sample_CJR_Calculations.png

Calculation #1: The first question every healthcare executive asks about CJR is: how is this going to impact our bottom line? While the exact answer can only be reached through analysis using baseline data and CMS target pricing, what we know today is that CJR hospitals have until December 31, 2016 to figure out how to minimize their risk exposure in performance years 2 through 5 of the program. Year 4 is when the maximum CJR risk begins (capped at 20 percent). The “repayment amount” is what participant hospitals will owe CMS should they exceed their target price.

Calculation #2: Luckily, the converse scenario to downside risk is upside opportunity. Starting in CJR performance year 1, hospitals can be eligible to receive a reconciliation payment from CMS if their actual performance year episode costs are lower than the CMS target price. But first, hospitals have to achieve a quality threshold in order to reap the savings. The “upside” requires participants to meet a minimum composite quality score, explained in #5 below. Similar to maximum downside risk, maximum upside opportunity is capped at 20 percent in Years 4 and 5.

Calculation #3: Collaborators in CJR consist of providers who are directly involved in the patient care of a hospital’s CJR beneficiaries. A hospital may consider a multi-pronged approach to gain- and risk-sharing in order to incentivize all parties involved to better coordinate care, improve outcomes, and manage episode costs. Physicians are only one type of potential collaborator, but a highly influential stakeholder group in the game. Gainsharing payments to physicians must not exceed 50 percent of a physician’s Physician Fee Schedule payments in a performance year (in the example above, the Medicare FFS payment is $1,500). This is shown as a negative from the hospital’s perspective, as this would be considered an expense of the program. While the maximum calculation is based on the aggregate amount of services the physician bills, including multiple visits and other services after the patient is discharged, in the above sample, we have limited the calculation to just surgery – the one constant we can expect and is by far the largest proportion of the aggregate amount

Calculation #4: Just as reward can be shared with collaborators, so can risk. However, the hospital has to retain at least 50 percent of the repayment obligation to CMS. The remaining 50 percent of risk can be distributed among multiple collaborators, with no single collaborator at risk for more than 25 percent of the repayment amount. “Alignment payments” from collaborators to the hospital can be as equally incentivizing as gainsharing payments in CJR: in a risk-share scenario, everyone has skin in the game.

Calculation #5: Remember Calculation #2? CMS has intentionally linked reconciliation payments to quality performance in CJR. So, if your hospital achieves a windfall of $15,000 because it beat the target price but has not met the minimum quality threshold, there will be no reconciliation payment received from CMS (i.e., money will be left on the table). The quality strategy and methodology behind CJR is complex and involves two required measures and one voluntary measure. Fortunately, CMS will be managing the quality and cost reconciliation process on behalf of participant hospitals each year. But beware: don’t wait for CMS to tell you how your hospital is faring. Get ahead of your performance monitoring and understand where your weaknesses are.

Calculation #6: Quality incentive payments are “payback” mechanisms that CMS has created to effectively reduce the 3 percent CMS discount taken off the top across all five performance years of CJR. In other words, the better your composite quality score, the higher your potential reconciliation payment from CMS and the lower your repayment amount to CMS. While the maximum 1.5 percent discount reduction may not seem like much of a gift, it adds up when you have 100 or more episodes as illustrated in the example below. CMS will get its 3 percent discount immediately because it is factored into the target price. However, during reconciliation, the quality incentive payment will be applied to the final reconciliation or repayment amount.

Calculation #7: The total episode costs in an inpatient stay plus 90-days post-acute care can add up quickly. CMS credits many of the achievements of the Bundled Payments for Care Improvement program on the reduction of unnecessary post-acute care: reducing SNF utilization, as well as other high-cost post-acute providers, reducing readmissions, and shifting that utilization to clinically appropriate care settings. Evaluating your hospital’s utilization patterns against national and best practice benchmarks is a valuable exercise in understanding where savings can be achieved.

Calculation #8: There are two categories of savings that can be accrued in CJR: internal cost savings (ICS) and positive reconciliation payments from CMS. The ICS methodology is generated, calculated, and owned by the CJR hospital. These funds do not pass through or come from CMS at any time. Hospitals are, however, obligated to report on gain share payments that may have been paid out as a result of ICS generated. (Note: gain share payments to CJR collaborators can only be made once annually, and the payment must combine both ICS and/or positive reconciliation payments into a single payment.) ICS is often generated through a number of channels, such as care redesign that impacts length-of-stay and standardization of implant costs. There is no one-size-fits-all methodology for achieving ICS, and much of the work depends on the hospital’s existing care models, physician alignment initiatives, and clinical infrastructure.

Calculation #9: The adage “it costs money to make money” rings true in CJR. In building your hospital’s CJR program budget, don’t forget that you will need to invest in resources to be successful. Unless your organization is a regional Center of Excellence for joint replacements and is already well below the CMS target price, you probably have work to do. And more importantly, you need resources to actually do the work. Nurse navigators are a proven investment in episodic care because they follow your CJR patients throughout the entire episode, especially as it relates to post-acute care where many patients may fall off a hospital’s radar. Additionally, investments in data analytics software/vendor support and adaptation of existing IT infrastructure are common program costs in bundled payment programs.

Calculation #10: Last but not least, the halo effect. In performance year 5, your hospital will be a well-oiled machine for LEJRs (we hope). You will have invested, redesigned, improved over and over again, and you will have probably failed somewhere along the way, too. That failure becomes a little less daunting when you consider the competency and organizational muscle your hospital will have developed between now and 2020. Why? Because now you’ve done it, you’ve learned how to truly engage your clinical staff, your post-acute partners, your community, and most importantly, your patients. You can replicate all those efforts by expanding your muscle to other clinical episodes and to other payers in your market. Because the end goal in CJR is leveling the cost landscape (picture a bulldozer driven by CMS) and increasing the quality game, your patients and your network will know your hospital is best-in-class. This assumes, however, that you are performing better than your competitors. Remember that since CJR affects an entire market, you must compete not only against CMS’s target price, but against your competitors doing a better job in achieving savings and quality scores. Your CJR experience will also pave the way for other value-based care initiatives and service line strategies your organization may be planning now or on the horizon.

Bundled Payments, CJR


TiberioK.jpgMs. Tiberio is a manager with GE Healthcare Camden Group and has worked on a variety of projects involving the diverse, operational, and strategic needs of nonprofit and healthcare organizations. Her areas of focus include bundled payments and other healthcare and payment reform initiatives under the Center for Medicare & Medicaid Innovation. She may be reached at kelly.tiberio@ge.com.

 

 

LettsB.jpgMs. Letts is a senior manager with GE Healthcare Camden Group and specializes in financial advisory services for the healthcare industry. She has developed complex financial models for various types of healthcare entities including children’s hospitals, large public hospitals, academic medical centers, community providers, medical foundations, clinically-integrated networks, and hospitals in turnaround situations. She may be reached at barbara.letts@ge.com.

 

 

Topics: Bundled Payments, CMS, Barbara Letts, CJR, Kelly Tiberio

Should You Consider the Accountable Health Communities Model?

Posted by Matthew Smith on Feb 22, 2016 1:53:44 PM

By Tawnya Bosko, DHA, MS, MHA, MSHL, Vice President, and Megan Calhoun, MS, MSW, Manager,                   GE Healthcare Camden Group

questions.jpgOver the past five years, CMS has developed numerous innovative models, grants, and initiatives aimed at providing high-value care to vulnerable populations such as Medicaid and Medicare beneficiaries. CMS recently announced its most recent model, a five-year test named the Accountable Health Communities (“AHC”) Model. The underlying premise of this model is the assumption that enhanced coordination between providers and community-based social service organizations for Medicaid and Medicare patients can help to achieve the central tenets of the Triple AimTM: higher patient satisfaction, lower overall costs of care, and better clinical outcomes. With the introduction of each new model, organizations often wonder whether they would benefit from participation. 

Questions to Ask

If your organization answers “YES” to any of the questions below, you may want to consider application for the AHC Model!

  • Do you have a high volume of Emergency Department “frequent fliers” due to poorly managed psychosocial issues?

OR

  • Are healthcare services generally being mis-utilized due to the lack of sufficient psychosocial services?
  • Are there community-based organizations in your service area or surrounding neighborhoods that are not integrated into patient care plans or whose services are not fully utilized?
  • Does your payer mix consist of a high proportion of frail, underserved, or complex patients, such as Medicaid and/or Medicare patients or those dually eligible for Medicare and Medicaid?
  • Have you participated in or tried other care coordination initiatives (through CMS or otherwise) and been unable to successfully curb the cost curve?
  • Would you benefit from additional funding to integrate medical and behavioral care with social services?
  • Would your providers be open and willing to greater collaboration and coordination of care outside the four walls of current healthcare delivery sites?

It is clear that socioeconomic issues play a major role in the health of populations. According to CMS award recipients under the AHC model, referred to as “bridge organizations,” will oversee the screening of Medicare and Medicaid beneficiaries for social and behavioral issues, such as housing instability, food insecurity, utility needs, interpersonal violence, and transportation limitations, and help them connect with and/or navigate the appropriate community-based services.

If your organization struggles to manage the health of patient populations that have significant social support challenges, this program may be right for you. Up to 44 bridge organizations will be selected for the AHC model, which will deploy a common, comprehensive screening assessment for health-related social needs among all Medicare and Medicaid beneficiaries accessing care at participating clinical delivery sites.

Three Scalable Approaches

CMS has explained that the model will test three scalable approaches to addressing health-related social needs and linking clinical and community services – community referral, community service navigation, and community service alignment. Bridge organizations will inventory local community agencies and provide referrals to those agencies as needed. They may also provide intensive community service navigation such as in-depth assessment, planning, and follow-up until needs are

To measure the effectiveness of the model on impacting total cost of health care utilization and quality of care, the primary evaluation will focus on reduction in total health care costs, emergency department visits, and inpatient hospital readmissions.

Eligible applicants for the AHC model according to CMS are community-based organizations, hospitals and health systems, institutions of higher education, local government entities, tribal organizations, and for-profit and not-for-profit local and national entities with the capacity to develop and maintain a referral network with clinical delivery sites and community service providers.

Applications for the AHC model are due March 31, 2016.

Accountable Health Communities Model


bosko_headshot.pngDr. Bosko is vice president at GE Healthcare Camden Group and has over 20 years of experience in healthcare management and strategy. Her areas of focus and expertise include healthcare reform, market forces, and strategic analysis, specifically around hospital-physician alignment, emerging reimbursement and incentive models, performance optimization, payer strategy, and the intersection of health policy and delivery system transformation. Dr. Bosko is a nationally-recognized speaker on healthcare market trends and insights, focusing on the financing and delivery of care. She frequently presents at industry conferences and is the author of multiple articles for leading industry journals and publications on the transition to value-based reimbursement and health system strategy. She may be reached at Tawnya.Bosko@ge.com or 310-320-3990.

Megan.pngMs. Calhoun is a manager with GE Healthcare Camden Group and specializes in the areas of care management strategy and design, strategic and business planning analysis, accountable care organization applications, development and implementation, and the development of clinically integrated organizations. Ms. Calhoun has supported numerous clients with the completion of Medicare Shared Savings Program (“MSSP”) applications and implementation strategy and planning. Her experience includes care model design and implementation that spans the continuum. She may be reached at Megan.Calhoun@ge.com or 310-320-3990. 

 

Topics: CMS, Triple Aim, Tawnya Bosko, Megan Calhoun, Accountable Health Communities

10 Success Factors for an Effective Bundled Payments Strategy

Posted by Matthew Smith on Dec 3, 2015 10:49:52 AM

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

bp.jpgEarlier this year, Health and Human Services Secretary Sylvia Burwell updated the Centers for Medicare & Medicaid Services’ (“CMS”) timeline for moving fee-for-service to “alternative payment models” – the goal is to have 50 percent of Medicare fee-for-service payments be linked to “alternative payment models" by 2018. For the past 18 months, employers and commercial payers have explored bundled payments, one of the alternative payment methods, with more than 6,000 participants signed on to participate in testing and scaling bundled payments with Medicare in the BPCI program (Centers for Medicare & Medicaid Innovation, 2015). The evaluation of such tests will inform precisely how bundles will roll out nationally.

Conceptually simple with a relatively low entry point, it is no surprise that when considering the alternatives, healthcare organizations and physicians are enthusiastically test-driving bundled payments. Looking to avoid the “head in the sand” or “do nothing” approach but not quite ready for population risk, many healthcare executives view bundled payments as their middle game on the path to fusion reimbursement. Bundles can be a reasonable approach to fending off competitors and new entrants while introducing the organization and market to their new future. With bundles in pediatrics, newborn delivery, outpatient services, chronic disease, and oncology, bundled payments have moved far beyond the version 1.0 elective procedures.

If bundled payments are your preferred strategy, make sure you have a smart approach to execution. Here are the top 10 success factors to the latest in bundled payments:

1. Establish a culture of doing

Innovation is about doing. Healthcare organizations that can adopt a start-up culture will triumph in a time of payment reform and industry transformation. The pace is intense but necessary, and like a muscle that needs developing, your team will adapt. Implementing bundled payments and other alternative payment models is highly doable but does take discipline, and it will surely be disruptive. Smart leaders understand and prepare their team to rise to the challenge with a start-up attitude.

2. Find your pitch perfect

Many healthcare executives remain confused about what exactly “it” is that they are selling to payers when it comes to bundled payments. A provider’s “value” isn’t about jargon, or words at all. Your value, or your “pitch” – the pitch that will close new contracts and secure new partners and new revenue – is often lost to healthcare executives. Merely stating that you will compete on price or demonstrate “fee-for-value” is not different from what your competitors are promising. Take the time, typically two to three work sessions, to figure out your value proposition, and do not assume you know it. What is your story? Before taking another meeting with a payer, go back to the drawing board, and rethink and repackage your pitch. Your pitch or presentation likely involves a new method of delivery in the form of a real patient story where you contrast “what is” versus “what could be” as a result of this new contract or partnership. The message also needs to include a re-defining of partnership that is not about annual rate increases. Take rate increases off the table, and acknowledge that the task at hand is to manage the total cost of care. Newly structured arrangements where the onus is on the providers to ensure that patients do not get what they do not need… now that is a new conversation worth a payer’s time and your time.

3. Think digital market share

Healthcare is mobile. Are you in it? Health information being ubiquitous is closer than you think, thanks to companies such as reCaptcha (the security encryption technology that verifies you are not spam by asking you to enter letters, etc. on a website), that give secure access to health records and physicians online. The health reform play book assumes real-time predictive analytics at a provider level… at your patient’s finger tips. Managing bundled payments requires the ability to predict which patients are most at risk for falling off course, thus enabling early intervention. Bundles also require the ability to dodge avoidable readmissions. Now is the time to rethink how we define market share to include digital market share, which will matter (a lot) over the next five years.

 4. Rethink your capital strategy (hint: radically different)

Organizations should approach developing and implementing new payment models the way a venture capital start-up would. The major constructs of payment reform, whether it be managing episodic risk through bundles or assuming risk for a population, require significant analytic capability that many healthcare organizations today do not possess. Re-envisioning your business model to support total cost of care contracts requires rethinking the capital strategy. Letting go of historical allocation can be a tough cultural pill to swallow, but it is absolutely necessary. Many department directors have grown accustomed to an annual capital budget envelope to manage. Help department directors understand the future; situating the conversation with the context of transparency enables department directors to shift from a place of resistance to staunch support.

5. Open your architecture

The traditional “closed architecture” system is not only bad for patients and their families, it is bad for business. Healthcare and payment reform require providers to open their assets – their brands, their contact list, and their distribution channels – in an effort to monetize big ideas and opportunities. Rethinking traditional organization structures by opening up teams across functions and settings will position healthcare organizations to more quickly respond to the market and scale-up new innovations.

6. Build scale-ups

Many of our best ideas are not scalable, and yet our business plans are often predicated on our ability to scale big ideas. What if you were able to scale even 10 percent more of your organization’s big ideas? Implementing new payment models and getting them to “stick” require a strategic approach to scale. For example, even holding shorter, more efficient meetings, preferably walking or standing, supports this new “scale-up” mentality that will be your competitive advantage and enable you to maximize the full revenue opportunity of new payment innovations.

7. Get over the hiring hurdle

Bundled payments and other disruptive innovations are not for everyone, and healthcare executives may find they are having difficulty finding “good talent.” As important as it is to have innovative thinkers, we also all need masters of execution in the new world of healthcare reform. Much of the work of healthcare reform is counter culture to an organization in the ways described above. In addition to opening up their architecture, smart leaders are taking new approaches to their talent search to ensure the right dose of disruption while ensuring speed to market and ability to stick.

8. Redesign the care model

Bundled payment success is predicated on predictable cost and quality for an episode of care. As new interest in areas such as pediatrics, outpatient, and chemotherapy come into play, providers will need to develop and execute a care model that is right for the population for which they are accepting a bundled price. Standardize your approach to care model development to enable scalability. Common tools and processes, regardless of population, will enable organizations to more quickly scale up bundles.

9. Focus on the end game

Successful bundled payments implementation is the prelude for total cost of care and population health management. On the reimbursement continuum, the methodologies and approaches will support episodic risk are not different from the methodologies and approaches necessary for managing a population. Smart scaling of bundles means keeping an eye on the end game with bundles and ensuring your bundled payment strategy aligns with your population health strategy. Intentional overlap in roles and work in this area will ensure that you are not building bundles in silos, but building bundles within the context of total cost of care management.

10. Keep in mind the fight and the stakes

It bears repeating that in 2014, the price tag for U.S. healthcare came in at a hefty $3.8 trillion dollars – nearly double what other wealthy nations spent during the same time period (Commonwealth Fund, 2015). What is most disappointing about that number is just how little we got for our money. Not only do we still have 41 million uninsured Americans, but also, once again in 2014, the U.S. ranked dead last on infant mortality, dead last on life expectancy, and dead last on efficiency.

The orthodoxies governing healthcare finance are so entrenched that it will take disruptive leaders and disruptive innovations such as bundled payments to focus our transformation efforts on what actually works. Old hierarchies are crumbling not only inside healthcare but across the entire U.S. economy. Healthcare leaders who are willing to think digital market share and reconceive their business model will find the bigger and more exciting world of total cost of care to be a fight worth fighting.

Bundled Payments, Payment Reform, Deirdre Baggot, The 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, CMS, Bundled Payment, Deirdre Baggot

Are You Ready for Medicare’s Payment for Value? Do You Know Your Value Modifier Score?

Posted by Matthew Smith on Nov 16, 2015 2:58:18 PM

By Cami Hawkins, MHA, Manager, GE Healthcare Camden Group

Payment for ValueThe Affordable Care Act established the Value Based Payment Modifier (“VBPM”) to begin moving Medicare payments toward physician reimbursement that rewards value over volume. While it began with medical groups with more than 100 eligible providers (“EP”), all practices, regardless of practice size, are subject to payment adjustments in 2017 as a result of their performance in calendar year 2015. The Value Modifier (“VM”) adjusts the Medicare Physician Fee Schedule (“PFS”) payment based on the quality and cost of care provided(1).

Given the potential for future financial penalties, it is important to understand what your VM is and how you are performing as reported in the 2014 Annual Quality Resource Use Report (“QRUR”), which was released to all physicians by tax identifier numbers on September 9, 2015. The QRUR provides a snapshot of whether your practice is scoring in the acceptable range to avoid a penalty or exceeding the target and eligible for an incentive. Groups with ten or more EPs are subject to penalties in 2016 based on 2014 performance (those participating inMedicare Shared Savings Program ACOs, the Pioneer ACO Program, or the Comprehensive Primary Care Initiative are excluded) and should quickly review their QRUR report. 

If you are not performing within the acceptable range, there is still time to impact your VM and Medicare payments for 2017. Because the QRUR report provides a view into how a practice performs under a fee-for-value model, it is a valuable data source to use in identifying gaps in care and operations. You can use the data to facilitate your efforts to transform your practice to improve your quality of care, streamline resource use, optimize technology, and identify opportunities for care coordination.

Here are four ways your QRUR can help you on your path to success under fee-for-value:

  1. Use QRUR data to stratify your Medicare patients into the four chronic disease categories (diabetes, chronic obstructive pulmonary disease, coronary artery disease, and chronic heart failure) being measured to identify opportunities for care improvement. CMS is measuring this data to determine per capita costs(2). Perform an analysis of current workflows, physician and staff responsibilities, and practice resources to identify gaps in addressing care needs of these patients and develop an implementation plan to strengthen the practice’s care coordination capabilities. Implement a care management program using a team-based care model and use disease registries to track these patients to ensure they are receiving the care they need. Work with your hospitals to develop effective care transition planning.
  2. Review the last hospital admission data and date of last claim filed supplied in the QRUR to identify opportunities for follow-up visits after hospital admission and hospital admissions that could have been prevented. Develop and/or refine processes to ensure effective care transitions and follow-up of recently discharged patients. Create processes to stay in touch with your sickest patients who are at risk of hospitalization and implement interventions to prevent hospitalization.
  3. To ensure that your data accurately attributes the providers in your practice, review “Providers associated with TIN.” Check provider participation and specialty and confirm accuracy against Provider Enrollment, Chain, and Ownership System (“PECOS”).
  4. Non-participation in Physician Quality Reporting System (“PQRS”) will impact your score in VBPM because it relies on PQRS participation for the purposes of reporting quality. While closely connected to PQRS, the VBPM levies penalties separate from PQRS for non-participation. VBPM adjustments are made in addition to the PQRS penalties that EPs may receive for not successfully reporting in that program. Your PQRS scores as compared to benchmarks is another valuable tool in assisting practices in identifying gaps in care.

The move to fee-for-value has started, and your practice can’t afford to be left behind. Both the QRUR and PQRS reports provide practices and physicians with data to use in transforming their practices for success under value-based payment. It is time to start the journey to practice transformation now.

(1) Claims data is used to measure both quality and cost. Quality measures included in the QRUR report are the 30-day All Cause Hospital Readmission, Acute Ambulatory Care-Sensitive Condition (ACSC) Composite, and Chronic ACSC Composite measures. The cost measures included are Per Capita Costs for All Attributed Beneficiaries, Per Capita Costs for Beneficiaries with Diabetes, Per Capita Costs for Beneficiaries with Chronic Obstructive Pulmonary Disease (COPD), Per Capita Costs for Beneficiaries with Coronary Artery Disease (CAD), Per Capita Costs for Beneficiaries with Heart Failure, and Medicare Spending per Beneficiary (MSPB).
(2) For detailed CMS guidelines to evaluate and improve performance, refer to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Downloads/2014-Understanding-Your-QRUR.pdf for more information.

Ms. Hawkins is a manager with GE Healthcare Camden Group and has more than 20 years of experience in the healthcare provider sector as a management consultant. She specializes in the areas of practice operations, contract negotiations, benefits administration, reimbursement management, and market development. Ms. Hawkins assists a wide range of provider organizations, healthcare systems, and independent and employed physician groups with addressing issues impacting their overall performance and competitive positioning. Her key areas of expertise include strategic planning, population health strategy, and hospital/physician integrations. She may be reached at chawkins@thecamdengroup.com or 512-792-5600.

Topics: Medicare, CMS, Payment Reform, Value Modifier, Cami Hawkins

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