Bundled Payments as an Alternative Payment Model: BPCI Advanced and the Future

1. Bundled Payments as an Alternative Payment Model: BPCI Advanced and the Future Virginia Cardiac Services Quality Initiative Quarterly Meeting December 6, 2018

2. Title XVIII and XIX of the Social Security Act Medicare and Medicaid EstablishedJuly 30,1965

3. Health-Care Spending, American-Style Source: Centers for Medicare & Medicaid Services

5. Attempts at controlling costsValue Driven Healthcare: Legislation Affordable Care Act (ACA) of 2010 Title III: Improving the Quality and Efficiency of Health Care Subtitle A – Transforming the Health Care Delivery System Medicare Access and Children’s Health Insurance Plan Reauthorization Act (MACRA) of 2015

6. Triple Aim Better Health Better Care Lower Costs

7. Health Care Reality • Payment Methods are changing • Value not Volume • Consumer engagement • Risk models • Winners/Losers: Flexibility and adaptability

8. Deflators of Cost • High Performance Networks • Benefit Design: • Narrow Networks • Increased Deductibles/ Premiums • Increased Risk for Providers • Pharmacy Benefit Manager Programs PWC Cost Trends 2016

9. Deflators of Cost • High Performance Networks • Benefit Design: • Narrow Networks • Increased Deductibles/ Premiums • Increased Risk for Providers • Pharmacy Benefit Manager Programs PWC Cost Trends 2016

10. Deflators of Cost • High Performance Networks • Benefit Design: • Narrow Networks: COEs • Increased Deductibles/ Premiums • Increased Risk for Providers • Pharmacy Benefit Manager Programs PWC Cost Trends 2016

12. Deflators of Cost • High Performance Networks • Benefit Design: • Narrow Networks • Increased Deductibles/ Premiums • Increased Risk for Providers • Pharmacy Benefit Manager Programs PWC Cost Trends 2016

14. H.R. 2The Medicare Access and CHIP Reauthorization Act of 2015(MACRA)

15. Quality Payment Plan (QPP) Under MACRA, the QPP was established and created a fork in the road for physician payment beginning in 2017: 2017

16. CMS APM Framework

17. Alternative Payment Models (Category 3A)

19. Advanced Alternative Payment Models (3B)

23. A Mandatory CABG Bundle will be considered an Advanced APM Shared Savings Program Tracks 2 and 3

24. Bundled Payments

25. Definition of Bundling • Bundling is a marketing strategy that joins products or services together in order to sell them as a single combined unit. Bundling allows the convenient purchase of several products and/or services from one company.

26. Bundled Payments

27. Benefits of Bundled Payments:Predictability • Consumer: Can plan their costs • Insurers/Employers: Can plan expenses • Hospitals: Will work to optimize cost accounting, supply chain, operations • Physicians: Learn to think about relationship between quality, costs and care optimization

28. Do Bundles Decrease Costs? Decrease in Implant Costs and PAC Costs July 2015 BPCI $21,208 July 2009 $26,785 Cost of Joint Replacement Using Bundled Payments JAMA Intern Med. 2017;177(2):214-222

29. Do Bundles Affect Quality? *Length of Stay Decreased for ACE and BPCI *ER Visits and Readmissions Remained Stable Cost of Joint Replacement Using Bundled Payments JAMA Intern Med. 2017;177(2):214-222

30. Key Pressure Points: Design is Critical • Anchor procedure and diagnosis codes • Target services/procedures and diagnosis codes • Complications • The pre- and post-episode window • The success of bundling really depends on these agreed upon time frames • Inclusion Criteria • Exclusion Criteria

31. Key Pressure Points: Design is Critical • Attributable costs • MACRA committee on cardiovascular care has deliberated extensively on this topic • Open concurrent episodes = high risk • Prospective pricing vs retrospective reconciliation

32. Overview of Bundle Modeler Tool • CC creating bundles using the Bundle Modeler tool Historical Data • Reports: • Pricing • Exclusions • Complications Bundle Engine Bundle Editor Bundle Definitions 32

33. Episode Development Process Base definition • Leverage the Bundle Modeler tool to build CC’s customized bundle definition using claims data • Definition is used to price bundle, understand cost and utilization of an episode by hospital and physicians/health care providers

34. Steps to create Custom Bundle • Determine the Bundle/Episode DRG’s/CPT’s • Determine Excluded Conditions • Determine Time Period • Analyze data and determine routine care for pre and post period • Analyze data and determine complications for post period • Utilize Bundle Modeler to collect Claims Data • Partner with Payers

35. Any One MS-DRG Any One Primary Procedure CABG Bundle - Anchor Procedure and DRG Codes

36. Steps to create Custom Bundle • Determine the Bundle/Episode DRG’s • Determine Excluded Conditions • Determine Time Period • Analyze data and determine routine care for pre and post period • Analyze data and determine complications for post period • Utilize Bundle Modeler to collect Claims Data • Partner with Payers

37. CABG Episode: Exclusions *Conditions that exclude patient from entire episode

38. Steps to create Custom Bundle • Determine the Bundle/Episode DRG’s • Determine Excluded Conditions • Determine Time Period • Analyze data and determine routine care for pre and post period • Analyze data and determine complications for post period • Utilize Bundle Modeler to collect Claims Data • Partner with Payers

39. CABG Bundle Definition- Time Frames CABG Bundle includes coverage for services divided into 3 distinct time frames: Pre Period 0-90 Days Prior to CABG admission Inpatient CABG admission Post Period 30-90 days Post starting after discharge date

40. Steps to create Custom Bundle • Determine the Bundle/Episode DRG’s • Determine Excluded Conditions • Determine Time Period • Analyze data and determine routine care for pre and post period • Analyze data and determine complications for post period • Utilize Bundle Modeler to collect Claims Data • Partner with Payers

41. CABG Episode: Preop Inclusion Criteria

42. CABG Episode: PostopInclusion Criteria

43. Steps to create Custom Bundle • Determine the Bundle/Episode DRG’s • Determine Excluded Conditions • Determine Time Period • Analyze data and determine routine care for pre and post period • Analyze data and determine complications for post period • Utilize Bundle Modeler to collect Claims Data • Partner with Payers

44. CABG Episode: Post Op Complications

45. Steps to create Custom Bundle • Determine the Bundle/Episode DRG’s • Determine Excluded Conditions • Determine Time Period • Analyze data and determine routine care for pre and post period • Analyze data and determine complications for post period • Utilize Bundle Modeler to collect Claims Data • Partner with Payers

46. Bundle Modeler Process

47. Pricing

48. Pricing Requires Longitudinal Data Uses historical and market data for the pre-hospitalization, inpatient and post-hospitalization period 1. Determine the average reimbursement for DRG and IP professional components 2. Determine incidence of normal post-op care and complications and how much does this care cost • Include in price – higher bundled price or • Develop outliers– lower bundled price but reverts to fee for service

49. Outliers 1. First dollar protection • Case hits the outlier total spend for the bundle • Bundle is shattered and reverts to fee for service 2. Second dollar protection • Case hits a higher outlier total spend threshold • Bundle case rate remains but any services beyond the threshold are fee for service

50. Current CMS Bundles: BPCI Advanced • Voluntary model • A single retrospective bundled payment with a 90 day clinical episode duration • 29 inpatient episodes • 3 outpatient episodes • Payment tied to performance on quality measures