Health Reform & the Delivery System: A New Medley of Payment & Incentives

1. Health Reform & the Delivery System:  A New Medley of Payment & Incentives Anne K. Gauthier Senior Fellow National Academy for State Health Policy October 6, 2010 1

2. Overview • Numerous provisions in PPACA promote movement toward a high-performance health delivery system • State opportunities and obligations to promote high quality, efficient care

3. State Activities and Strategies to Improve Quality & Efficiency Strategic coordination & alignment of activities Data collection, aggregation, & standardization for performance measurement Public reporting and transparency of cost & quality data Payment reform & alignment of financial incentives to encourage value-based purchasing Consumer engagement to drive policy change & encourage care self-management Provider engagement in policy making & transforming care delivery

4. Strategic coordination & alignment of activities

5. Strategic Coordination & Alignment of Activities : State Challenges • Need to evaluating how current initiatives will align with ACA ex. HITECH • Increased coverage expansions need cost containment mechanisms • Reform efforts span across varying state and federal agencies

6. Strategic Coordination & Alignment of Activities: State Opportunities in ACA • Collaboration to improve system performance • National Strategy to Improve Health Care Quality • Will emphasize quality and efficiency in delivery system; establish priorities for system improvement • Center for Quality Improvement and Patient Safety (AHRQ) • Will identify best practices, develop tools, disseminate information, and build capacity at state and local level • Interagency Working Group on Health Care Quality • Will coordinate reform efforts to avoid duplication, develop streamlined process for reporting and compliance, and assess alignment across public and private sectors

7. Data collection, aggregation, & standardization for performance measurement

8. Data Collection, Aggregation, & Standardization: State Challenges • States lack… • standardized measures • streamlined data aggregation • access to Medicare data • complete datasets • Small/ rural practice integration of data implementation and reporting requirements

9. Data Collection, Aggregation, & Standardization: State Opportunities in ACA • Creation of standard measures • AHRQ developed provider-level quality measures • Convention of stakeholders to develop quality measures, and standards for reporting and payment in fed. programs • Medicaid Quality Measurement Program • Streamlined data aggregation • Program Integrity Database • Integration of quality reporting with EHR

10. Data Collection, Aggregation, & Standardization: State Opportunities in ACA • Complete datasets for population based approaches • Incentive payments and penalties under the Physician Quality Reporting Initiative • Release of Medicare claims data • Required reporting on value-based purchasing • Fed-state Diabetes Report Card • Health plan quality reporting as part of exchange participation

11. Public reporting and transparency of cost & quality data

12. Public Reporting & Transparency of Cost & Quality Data: State Challenges • Identification of useful information • Complexity of issues • Consumer confusion • Fed-state alignment of measures/ data linkages

13. Public Reporting & Transparency of Cost & Quality Data: State Opportunities in ACA • Publically reported data to inform decision making • HHS collection, aggregation, & reporting of quality data • Disclosure of financial relationships among providers, suppliers, & manufacturers • Access to CMS hospital-acquired condition data • Annual reports from the Payment and Advisory Board on health care for Medicare beneficiaries • Public availability of quality reporting initiatives • Physician Compare website

14. Payment Reform & alignment of financial incentives to encourage value-based purchasing

15. Payment Reform & Alignment of Financial Incentives: StateChallenges • Medicare participation • Lack of coordination in PPACA rollout • Preclusion of participation in programs because of previously established programs • Conflict with current state initiatives • Federal prioritization of payment reform

16. Payment Reform & Alignment of Financial Incentives: State Opportunities in ACA • Innovative payment reform models • Center for Medicare and Medicaid Innovation • Health home program for those with chronic conditions • HHS guidelines on value-based design • Medicare Participation • Payment adjustments based on provider productivity • FFS modifier based on value • HHS programs for value-based purchasing in specialized facilities • Proposals from Independent Payment Advisory Board to improve quality

17. Payment Reform & Alignment of Financial Incentives: State Opportunities in ACA • Multi-payer payment models • Medicare Shared Savings Program => ACOs • Medicaid demos to test bundled payments, global captivated systems, and pediatric ACOs • Medicare bundled payment pilot • Incentives to reduce hospital-acquired conditions • Reduction of Medicare payments related to preventable readmissions • No Medicaid payments for hospital-acquired conditions

18. Consumer engagement to drive policy change & encourage care self-management

19. Consumer Engagement to Drive Policy Change & Encourage Self-Management: State Challenges • Perception of reform as limiting choice • Access issues outweigh quality issues for consumers • Patients already limited in ability to participate in making decisions about own care

20. Consumer Engagement to Drive Policy Change & Encourage Self-Management: State Opportunities in ACA • Inclusion of consumers in strategy development • Consumer advisory council to advise Independent Payment Advisory Board on consumer impact of payment reforms • Tools for informed decision making • Patient-centered education by exchange plans • Grants to develop patient decision aids & disseminate best practices • Test of payment models that support shared decision making • Patient Navigator grant program extended

21. Provider engagement in policy making & transforming care delivery

22. Provider Engagement in Policy Making and Delivery Transformation: State Challenges • Perverse payment incentives • Lots of coaching/ training necessary • Resistance to change • Lack of forums to share programmatic input

23. Provider Engagement in Policy Making and Delivery Transformation: State Opportunities in ACA • Provider engagement in quality initiatives • Provider implementation of quality improvement strategies in order to contract with exchange plans • Provider inclusion on Independent Payment Advisory Board • Provider support for quality improvement • Physician feedback program with new reports and data analysis • Grants for health professional curricula on patient safety and quality improvement • IOM study on best practices for clinical guidelines

24. Provider Engagement in Policy Making and Delivery Transformation: State Opportunities in ACA • Provider support (cont.) • Comparative effectiveness research by the Patient-Centered Outcomes Research Institute • State grants to create interdisciplinary teams to support primary care physicians in creating medical homes • Primary Care Extension Program to support, assist, and educate primary care providers • Grants to establish State Hubs to coordinate with quality improvement organizations and health education centers • Grants to support community-based collaborative care networks for safety-net hospitals and FQHCs

25. Keys Themes from States • Reform is an opportunity for program transformation • Not just “supersizing” existing programs • ACA provides opportunities to build momentum on current quality and efficiency efforts • Ex. ARRA reforms • Quality and efficiency should not be divorced from coverage expansions

26. Keys Themes from States • States face dire staff and financial challenges in implementing ACA • Scarce resources; pressure to implement mandatory reforms • Leadership is critical to advancing state agendas • Federal officials can learn from the efforts of leading states

27. Thanks to… Jill RosenthalAbby Arons Program Director, NASHP Intern, NASHP Christina Miller Research Assistant, NASHP For further information… Rosenthal, J., Gauthier, A., Arons, A. State Strategies to Improve Quality and Efficiency: Making the Most of Opportunities in National Health Reform, Forthcoming CMWF/ NASHP publication, October 2010 Anne Gauthier Senior Fellow, NASHP agauthier@nashp.org http://www.nashp.org