Missouri Rural Health Get Link'd Conference

1. Missouri Rural Health Get Link'd Conference

2. KEYNOTE: National Health Reform November 15, 2016 Presented by Brian F. Bauer | 248.457.7821 | bbauer@hallrender.com

3. Overview • Two models and the transition from one to the other • The ACA (Affordable Care Act), MACRA (Medicare Access and CHIP Reauthorization Act) and beyond • What will the Republicans do? • Clinical implementation models and the future

4. Tale of Two Models • Sickness/Volume Model • Population Health Model • Different regulatory schemes are interrelated and mutually dependent • CMS payment models • IRS Community Health Needs Assessment • OIG fraud and anti-kickback regulations

5. Two Models and Transition • Bending the cost curve • Increasing the value received for the payments made

6. The ACA, MACRA and Beyond • the Population Health/Value Model has taken root and has seen significant growth • MSSP/ACO • CJR (Comprehensive Joint Replacement) Model • QPP (Quality Payment Program) and MIPS (Merit-based Incentive Payment System) • CPC+ (Comprehensive Primary Care Plus) • TCPI (Transforming Clinical Practice Initiative)

7. What will the Republicans Do? • Can’t ignore the elephant in the room • Insurance Component • Clinical Implementation • Timing of the change, when will this happen? • Won’t repeal without a replacement • Legislative vs. Regulatory initiatives • Existing program contracts

8. Clinical Implementation Models • MSSP and ACOs • CMS’ base model and department of research and development • Shared responsibility for: • Health outcomes • Maintaining Health • Resource Use • Transfer of Risk

9. Clinical Implementation Models • CJR (Comprehensive Joint Replacement Model) • Intended to force hospitals to engage in care redesign efforts with other health care providers for lower extremity joint replacements (LEJR) • Hip and knee replacements – 400,000 in 2014 at a cost of $7 billion • Despite high volume, quality and cost still vary greatly among providers ($16,500 -$33,000) • CJR is mandatory for IPPS hospitals in 67 specified MSAs (unless participating in other bundled payment initiatives)

10. Clinical Implementation Models • CJR (Comprehensive Joint Replacement Model) • Patient Attribution • Transfer of Risk

11. Clinical Implementation Models • CJR (Comprehensive Joint Replacement Model) • Episode of Care: begins when the patient is admitted to a hospital for DRG 469 or DRG 470 and ends 90 days post discharge • Payment during episode of care does not change • Episode Target Price • hospital’s historical payment data • regional historical payment data

12. Clinical Implementation Models • CJR (Comprehensive Joint Replacement Model) • Net Payment Reconciliation Amount (NPRA) is calculated using a 3-step process: • Medicare’s actual Part A and Part B payments for all episodes of care attributable to LEJR procedures performed at the hospital during the performance year are aggregated • The hospital’s episode target price is multiplied by the number of CJR episodes attributable to the hospital during the performance year • The amount determined in Step 1 is subtracted from the amount determined in Step 2

13. Clinical Implementation Models • CJR (Comprehensive Joint Replacement Model) • Reconciliation Payments: • If the NPRA for a performance year is a positive number, then the participant hospital may be entitled to a reconciliation payment from Medicare. In performance years 1 and 2, a participant hospital’s reconciliation payment is capped at 5% of the amount calculated in Step 2 of the NPRA calculation; available reconciliation payments are capped at 10% of the amount calculated in Step 2 of the NPRA calculation in performance year 3 and at 20% of the amount calculated in Step 2 of the NPRA calculation in performance years 4 and 5.

14. Clinical Implementation Models • CJR (Comprehensive Joint Replacement Model) • Reconciliation Payments: • If a hospital’s NPRA is negative, the hospital will be required to make a repayment to Medicare equal to the negative NPRA amount. However, for performance year 1 (April 1, 2016 through December 31, 2016), regardless of whether the NPRA is negative, hospitals will not be required to make any repayment to Medicare. In performance year 2, any repayment amount will be capped at 5% of the amount calculated in Step 2 of the hospital’s NPRA calculation; repayment amounts are capped at 10% of the amount calculated in Step 2 of the hospital’s NPRA calculation for performance year 3 and 20% of the amount calculated in Step 2 of the hospital’s NPRA calculation for performance years 4 and 5.

15. Clinical Implementation Models • QPP (Quality Payment Program) • Expands on and applies the methodologies that CMS developed in the MSSP • Makes all clinicians accountable for quality • Incentives for participating in APMs (Alternative Payment Models) • Incentives for clinicians assuming additional risk

16. Clinical Implementation Models • QPP: MIPS (Merit-based Incentive Payment System) • CMS is required to: • Develop a methodology for assessing provider performance • Use the methodology to calculate a composite performance score for each provider (0-100) • Use the composite performance score to calculate payment for the provider

17. Clinical Implementation Models • QPP: MIPS • The Performance Categories include: • Quality (60% of total score  50%) • Resource Use (0% of total score  10%) • Clinical Practice Improvement Activities or CPIA (15% of total score) • Advancing Care Information or ACI (25% of total score)

18. Clinical Implementation Models • QPP: MIPS • Providers with composite performance scores at or above the performance threshold will receive a zero or positive payment adjustment • Providers with higher scores will receive a higher payment • Providers with composite performance scores below the performance threshold will receive a negative payment adjustment • Providers with lower scores will receive a greater negative adjustment

19. Clinical Implementation Models • QPP: MIPS • The final QPP rule allows clinicians to choose between different levels of participation: • Test Data Submission • Partial Data Submission • Full Data Submission

20. Clinical Implementation Models • QPP: Advanced Alternative Payment Models • Clinicians whose participation in Advanced APM is significant are exempt from MIPS adjustment and receive a 5% Medicare incentive payment • To be an Advanced APM, the APM must: • Require at least 50% of the clinicians to use certified EHR technology to document and communicate clinical care information in the first year and 75% in the second year • Require participants to bear financial risk • withholds, reduced payments, required payments

21. Clinical Implementation Models • Comprehensive Primary Care Plus • To support the delivery of comprehensive primary care, CPC+ includes three payment elements: • Care Management Fee (CMF): Both tracks provide a non-visit based CMF paid PBPM. The amount is risk-adjusted for each practice to account for the intensity of care management services required for the practice’s specific population. The Medicare FFS CMFs will be paid to the practice on a quarterly basis.

22. Clinical Implementation Models • Comprehensive Primary Care Plus • To support the delivery of comprehensive primary care, CPC+ includes three payment elements: • Performance-based incentive payment: CPC+ will prospectively pay and retrospectively reconcile a performance-based incentive based on how well the practice performs on patient experience measures, clinical quality measures, and utilization measures that drive total cost of care.

23. Clinical Implementation Models • Comprehensive Primary Care Plus • To support the delivery of comprehensive primary care, CPC+ includes three payment elements: • Payment under the Medicare Physician Fee Schedule: Track 1 continues to bill and receive payment from Medicare FFS as usual. Track 2 practices also continue to bill as usual, but the FFS payment will be reduced to account for CMS shifting a portion of Medicare FFS payments into Comprehensive Primary Care Payments (CPCP), which will be paid in a lump sum on a quarterly basis absent a claim. Given our expectations that Track 2 practices will increase the comprehensiveness of care delivered, the CPCP amounts will be larger than the FFS payment amounts they are intended to replace.

24. Clinical Implementation Models • The Future: • Legislative programs such as the MSSP (ACOs and shared savings) and QPP (MIPS and AAPMs) will likely continue • Regulatory programs implemented by CMMI under the ACA will continue for the duration of their contracts (3-5 years) • It is unlikely that new legislative and regulatory programs will abandon the “triple part aim” but may use new methodologies that reflect the approach of the new administration

25. Clinical Implementation Models • The Future: • The turnover in senior and operation staff will impact the development of new methodologies • The timing and types of updates of current initiatives and the development of new initiatives • Population health initiatives and models will continue to be based on the MSSP and CPC+ framework

26. Brian F. Bauer 248.457.7821 bbauer@hallrender.com This presentation is solely for educational purposes and the matters presented herein do not constitute legal advice with respect to your particular situation. Anchorage | Dallas | Denver | Detroit | Indianapolis | Louisville | Milwaukee | Philadelphia | Seattle | Washington, D.C.