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GE Healthcare Camden Group Insights Blog

HFMA Forum Networking Webinar: Bundled Payment Models-- CJR and More

Posted by Matthew Smith on May 5, 2016 11:08:28 AM

webinar, bundled paymentsPlease join GE Healthcare Camden Group's Kelly Tiberio and Novato Community Hospital's Brian Alexander for this Forum-exclusive webinar as they share their perspectives about the challenges healthcare organizations face when implementing bundled payment programs--specifically related to orthopedic episodes. Practical tips and lessons learned will be shared. Critical areas covered during the webinar include the following:

  • The importance of physician champions and strategies for their engagement
  • Considerations for physician incentive design
  • A sample physician-level performance dashboard
  • Accountability for program compliance and continual performance improvement

Participants will be able to ask questions and discuss bundled payment challenges and approaches specific to their own facilities. 

Please note: This webinar is only available for HFMA Forum subscribers. Learn more about the Forums—and join.

Date and Time

May 17 — 10:00 a.m. – 11:00 a.m., CDT

Discussion Leaders

Brian Alexander
Chief Administrative Officer
 
Kelly Tiberio
Manager
GE Healthcare Camden Group
 
Bundled Payment, CJR, Webinar

Recommended For:

HFMA Forum members interested in bundled payment models, including CFOs, revenue cycle leaders, and managed care directors 

Field of Study: Specialized Knowledge and Applications
Delivery Method: Group Internet
Level: Intermediate
Prerequisites: A basic understanding of bundled payment models     
CPEs: 1.0  

Price:

HFMA Forum members: Free

Non-Forum subscribers: N/A| This virtual networking webinar is only available to HFMA Forum subscribers. HFMA has four Forums: CFO, Revenue Cycle, Payment & Reimbursement, and Legal & Regulatory. This webinar is open to subscribers to all four Forums. Learn more about the Forums—and subscribe.  

Forum subscribers can now earn 1 CPE credit by attending Forum virtual networking webinars. The webinar presentation and audio will be available on the Forum website after the webinar. However, CPE credits are only awarded to Forum members who attend the live webinar on May 17.  

Topics: Bundled Payments, Webinar, CJR, Kelly Tiberio

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

Webinar: The Next Generation of Bundled Payments

Posted by Matthew Smith on Feb 2, 2016 10:52:16 AM

webinar_Clouds_icon-resized-600.jpgPlease join GE Healthcare Camden Group's Kelly Tiberio and Barbara Letts this Thursday, February 4th at 2 PM Eastern for a real-time look at bundled payments and a discussion on how to succeed today and in the future in this arena, in the Healthcare Web Summit event frommcol: The Next Generation of Bundled Payments: Charting a Course for Financial Success.

This 60-minute webinar, presented by GE Healthcare Camden Group, examines the current bundled payments environment and what successful organizations are doing to position themselves in the new era of payment reform and value-based care.

Learning Objectives

After attending this webinar, attendees will be able to:

  1. Identify bundled payment trends—especially related to the CMS Comprehensive Joint Replacement (“CJR”) program.
  2. Ascertain key factors impacting success in bundled payment participation
  3. Initiate a plan for success for participating in the CJR program
  4. Distinguish the necessary next steps for short-, mid-, and long-term success
  5. Engage in interactive learning through online question submission, attendee feedback and opportunity for follow up questions, and networking with attendees, faculty and other professionals through dedicated LinkedIn group.

Who Should Attend

Interested attendees would include:

  • C-Suite Executives
  • Medical Directors
  • Transformation, Innovation and Integration Executives and Staff
  • Managed Care Executives and Staff
  • Revenue Cycle Executives and Staff
  • Care Management Executives and Staff
  • Network Management Executives and Staff
  • Provider Relations Executives and Staff
  • Accountable Care Executives and Staff
  • Finance Executives and Staff
  • Planning and Strategic Executives and Staff
  • Business Intelligence Staff
  • Information Technology Executives
  • Other Interested Parties

Attendees represent organizations including:

  • Hospitals and Health Systems
  • Provider Networks
  • Accountable Care Organizations
  • Health Plans
  • Third Party Administrators
  • Employers
  • Government
  • Care Management Organizations
  • Pharmaceutical Organizations
  • Solutions Providers
  • Associations, Institutes and Research Organizations
  • Media

Individual Registration Fee: $195. Post-event materials, with video syncing slides and recorded audio, plus presentation pdf file: $45 for attendees; $260 for non-attendees after the event. To register for this webinar, please click the button below (note: you will be redirected from the GEHC Insights Blog to the home page of Healthcare Web Summit).

Webinar, Bundled Payments, CJR, Financial Success

Topics: Bundled Payments, Barbara Letts, Value-Based Payments, CJR, Kelly Tiberio

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