Hospital Reimbursement and Penalties: Maximizing Value-based Purchasing and Minimizing Readmissions and Hospital-acquire

2. Safe Care?

4. Harms Length of stay Cost

5. Pay for Performance

6. Hospital Reimbursement Penalties Over Time 2% 3.25% 5.5% 5.75% 6% A hospital’s payment reduction applies to EVERY Medicare patient for one year

7. Value-based Purchasing

11. Value-based Purchasing

14. 2016 CMH MSPB

15. 2016 CMH MSPB

16. 2016 CMH MSPB

17. 2016 CMH MSPB

18. 2016 CMH MSPB

20. FY 2018 Results • 1597 hospitals to see bonuses, slightly less than last year • Amounts to $ 1.9 billion • 1211 hospitals will see payment reduction • For half of hospitals, changes are only from -0.5% to +0.5% • Highest performing hospital received slightly more than 3% bonus • Lowest performing hospital received cut of 1.65%

22. Value-based Purchasing

23. Readmission Reduction

24. Readmissions

26. FY 2018 Results • 80% of hospitals will be penalized, 24 fewer hospitals than last year • All but 174 hospitals were also penalized last year • Average penalty held steady at 0.73% • 48 hospitals received maximum 3% penalty • CMS estimates penalties are $564 million compared to $528 million in FY 2016

27. Starting with FY 2017, PN measure expanded to include sepsis with secondary pneumonia dx.

28. Readmission Reduction

29. Hospital-acquired Conditions

30. Hospital-acquired Conditions

32. Patient Safety Indicator 90 (PSI 90)Domain 1 Removed Modified Added

33. PSI 90 Composite Weight- HACRP

34. 2

36. FFY 2018 • 751 of 3313 hospitals to have Medicare payments reduced by 1% , including 115 teaching hospitals • These hospitals performed in the worst quartile • Estimated losses to hospitals of $ 430 million • Hospitals that serve poorer and sicker patient populations were fined more than hospitals with a more affluent patient base

38. Hospital-acquired Conditions

40. VBP + Readmissions + HACs

41. Documentation it matters…. Reimbursement (DRG including all comorbidities) Quality scores—including mortality rates PSI (patient safety indicators) and HAC (hospital acquired conditions) Reporting diseases and research the effectiveness of different treatments, data readily available on the internet to consumers The stakes are much higher now for both physicians and hospitals !

42. DRG (diagnostic related group) The reimbursement model used by CMS and most insurers • The concept behind this payment methodology • Providers are expected to provide care for patients with the same diagnosis in the same timeframe (LOS) utilizing the same amount of resources • Secondary diagnoses have huge impact on DRG assignment and SOI/ROM scoring • How comorbid and major comorbid conditions are captured (moves DRG to higher weight) • Need to be specifically documented—as precisely and accurately as possible • Carried throughout the record and into the discharge summary (to avoid potential audits)

43. SOI and ROMSeverity of illness-------Risk of mortality • A complicated risk stratification score that depends on MD documentation—specifically the principal diagnosis and associated secondary diagnoses • SOI/ROM is rated on a scale of 1 (minor) to 4 (extreme). When clinicians don’t provide precise documentation to show how sick their complex patients really are, those doctors’ observed-to-expected mortality—a ratio determined by SOI/ROM—may be inappropriately high; That would not have been the case with more thorough documentation • On the other hand, when a sick patient with a high SOI/ROM is discharged alive, both the hospital’s and the physician’s observed-to-expected mortality profile improve • SOI and ROM scores are dependent on the patients underlying conditions. Higher SOI and ROM scores are characterized by multiple serious diseases and the interaction among those diseases • Besides SOI/ROM scores, documentation affects the DRG, which in turn determines a host of other metrics and factors, such as Medicare’s geometric mean length of stay (GMLOS) and the hospital’s case mix index. All those factors—and many more—work together to determine reimbursement

44. Example: Heart failure patient More specific and accurate: Documentation: Acute diastolic CHF due to hypertension, with CKD stage IV Dx: Hypertensive heart/kidney disease with CHF, CKD stage IV Secondary dxs: MCC: acute diastolic heart failure; CC: CKD stage IV CMI/GLOS: 1.5097 4.7 days SOI/ROM: 2/2 Expected payment: $13,184 Non-specific, vague: Documentation: Exacerbated CHF, hypertension, CRI Dx: CHF, unspecified Secondary dxs: hypertension, CRI (No MCC or CC, no severity added) CMI/GLOS: 0.6762 2.6 days SOI/ROM 1/1 Expected payment: $5,905

45. Common inpatient CCs MCCs Chronic systolic heart failure Chronic diastolic heart failure Chronic respiratory failure Mild/moderate malnutrition TIA Acute renal failure/AKI CKD stage 4 and 5 Diabetic (type 1 or 2) gangrene Unspecified shock Bacteremia COPD with exacerbation Demand ischemia Dementia with behavior disturbances Persistent atrial fib/atrial flutter Acute blood loss anemia Hemiplegia or hemiparesis Morbid obesity with alveolar hyperventilation Acute systolic heart failure Acute diastolic heart failure Acute respiratory failure Severe malnutrition Stroke (acute) Acute renal failure due to ATN ESRD DM type 1 with DKA DM type 1 or 2 with coma Specified shock (septic, cardiogenic…) Sepsis Pneumonia NSTEMI or STEMI Pneumonia Metabolic/toxic encephalopathy Stage 3 or 4 pressure ulcer (POA)

46. Physician vs. Management Culture

47. 10 Skills and Characteristics of New Physician Leaders Collaboration and cooperation Strong listening skills Communication skills Self-confidence and mental resilience Humility Lack of arrogance Appreciation for others Mentoring Life balance Vision

48. The Evolution of Leadership

49. Behaviors that Directly Relate to Successful Physician Leadership Confidently expressing ideas and opinions Motivating others to perform at their best Building alignment and influencing others from various functional areas Recognizing problems, issues and opportunities Thinking strategically to promote growth, process improvement or in an attempt to gain competitive advantage Implementing problem-solving strategies Taking action that challenges the status quo Willingness to make tough decisions Being persistent

50. What Does CMH Expect of Physician Leaders? • Prepare for meetings • Attend meetings faithfully • Show up on time for meetings • Participate fully in meetings without dominating them • Pull your weight • Be accountable • It’s all about the patient- “every patient, every time”