VALUE BASED PERFORMANCE: UNDERSTAND YOUR SCORECARD AND BOOST YOUR REIMBURSEMENT

1. VALUE BASED PERFORMANCE: UNDERSTAND YOUR SCORECARD AND BOOST YOUR REIMBURSEMENT MARCH 06, 2013

2. INTRODUCTIONS ROBIN KISHVice President+1 813.220.6868 robin.kish@marsh.com SUZANNE HOLBACHVice President+1 865.274.9729suzanne.holbach@marsh.com DONNA JENNINGSSenior Vice President+1 404.539.8018donna.jennings@marsh.com

3. AGENDA • VBP and Its Impact • Healthcheck-2014 and Beyond • Risk & Finance: Impact Points • Unhealthy Hospitals (Collateral Risks) • “Healthy Hospital Solutions”

4. VBP AND ITS IMPACT

5. VBP AND ITS IMPACTWHAT IS VBP?

6. VBP AND ITS IMPACTWHAT IS VBP? Incentive for quality outcomes and efficiency: • Required by the Affordable Care Act. • Quality incentive program built on the Hospital Inpatient Quality Reporting (IQR) measure reporting infrastructure. • Next step in promoting higher quality care for Medicare; pays for care that rewards better value and patient outcomes, instead of just volume of services. • Funded by a 1% reduction from participating hospitals’ base operating diagnosis-related group (DRG) payments for FY 2013, increasing to 2% by FY 2017. • Uses measures that have been specified under the Hospital IQR Program and results published on Hospital Compare for at least one year.

7. VBP AND ITS IMPACTWHAT IS VBP? Incentive for quality outcomes and efficiency: • The VBP program design includes: • Measuring Quality Performance and Patient Experience • Total Performance Score (TPS) • 20 performance measures for FY 2013 • 24 performance measures for FY 2014 • Reimbursement based on Quality Outcomes • Funded by withholding 1% of the CMS reimbursement • Reimbursement is based on performance scores Pay for Performance vs. Pay for Reporting

8. 8 Patient Experience of Care Dimensions 12 Clinical Process of Care Measures • AMI-7a Fibrinolytic Therapy received within 30 minutes of hospital arrival. • AMI-8 primary PCI recevied with 90 minutes of hospital arrival. • HF-1 discharge instructions. • PN-3b blood cultures performed in the ED prior to initial antibiotic received in hospital. • PN-6 initial antibiotic selection for CAP in immunocompetent patient. • SCIP-Inf-1 prophylactic antibiotic received within one hour prior to surgical incision. • SCIP-Inf-2 prophylactic antibiotic selection for surgical patients. • SCIP-Inf-3 prophylactic antibiotics discontinued within 24 hours after surgery. • SCIP-Inf-4 cardiac surgery patients with controlled 6AM postoperative serum glucose. • SCIP-Card-2 surgery patients on a beta blocker prior to arrival that received a beta blocker during the perioperative period. • SCIP-VTE-1 surgery patients with recommended venous thromboembolism prophylaxis ordered. • SCIP-VTE-2 surgery patients who received appropriate venous thromboembolism prophylaxis within 24 hours. • Nurse communication. • Doctor communication. • Hospital staff responsiveness. • Pain management. • Medicine communication. • Hospital cleanliness and quietness. • Discharge information. • Overall hospital rating. VBP AND ITS IMPACTFY 2013 MEASURES 30% 70% Source: CMS official VBP web site.

9. VBP AND ITS IMPACTVBP 2013

10. VBP AND ITS IMPACTHOW ARE HOSPITALS EVALUATED? • Hospitals are awarded points for Achievement and Improvement for each measure or dimension, with the greater set of points used. • Points are added across all measures to reach the Clinical Process of Care and Outcome domain scores. • Points are added across all dimensions and are added to the Consistency Points to reach the Patient Experience of Care domain score. Source: CMS official VBP web site.

11. AchievementThreshold Benchmark All Hospitals’ Baseline SCORE0.70 One Hospital’s Performance 1 2 3 4 5 6 7 8 9 10 Achievement Range All Hospitals Me! Time VBP AND ITS IMPACTHOW ARE HOSPITALS EVALUATED? • Achievement points: awarded by comparing an individual hospital's rates during the performance period with all hospitals’ rates from the baseline period. • Rate at or above the benchmark: 10 points. • Rate less than the achievement threshold: 0 points. • Rate equal to or greater than the achievement. • Threshold and less than the benchmark: 1-10 points. Source: CMS official VBP web site.

12. AchievementThreshold SCORE0.21 Benchmark One Hospital’s Baseline SCORE0.70 One Hospital’s Performance Achievement Range 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 Me! Me! Improvement Range Time VBP AND ITS IMPACTHOW ARE HOSPITALS EVALUATED? • Improvement points: awarded by comparing a hospital's rates during the performance period to that same hospital's rates from the baseline period. • Rate at or above the benchmark: 9 points • Rate less than or equal to baseline period rate: 0 points • Rate between the baseline period rate and the benchmark: 0-9 points Source: CMS official VBP web site.

13. VBP AND ITS IMPACTAVERAGE VBP SCORES – OWNERSHIP Source: CMS official VBP web site.

14. VBP AND ITS IMPACTQUALITY MEASURES HEALTHCHECK Source: iVantage

15. VBP AND ITS IMPACTHCAHPS HEALTHCHECK Source: iVantage

16. VBP AND ITS IMPACTWHAT IS THE FINANCIAL IMPACT OF VBP? Withholding CMS reimbursement • The VBP initiative is funded by withholding reimbursement from participating hospitals’ Diagnosis Related Group (DRG) payments • FY 2013 - 1.0% • FY 2014 - 1.25% • FY 2015 - 1.5% • FY 2016 - 1.75% • FY 2017 – 2.0% • CMS estimates that in FY 2013, 50% of participating hospitals will receive a net increase in payments and 50% will receive a net decrease in payments • 1% of DRG payments withheld from eligible hospitals is estimated at $850 million.

17. HEALTHCHECK-2014 AND BEYOND

18. 13 Clinical Process of Care Measures 8 Patient Experience of Care Dimensions • AMI-7a Fibrinolytic Therapy received within 30 minutes of hospital arrival. • AMI-8 primary PCI received with 90 minutes of hospital arrival. • HF-1 discharge instructions. • PN-3b blood cultures performed in the ED prior to initial antibiotic received in hospital. • PN-6 initial antibiotic selection for CAP in immunocompetent patient. • SCIP-Inf-1 prophylactic antibiotic received within one hour prior to surgical incision. • SCIP-Inf-2 prophylactic antibiotic selection for surgical patients. • SCIP-Inf-3 prophylactic antibiotics discontinued within 24 hours after surgery. • SCIP-Inf-4 cardiac surgery patients with controlled 6AM postoperative serum glucose. • SCIP-Inf-9 postoperative urinary catheter removal on postoperative day 1 or 2. • SCIP-Card-2 surgery patients on a beta blocker prior to arrival that received a beta blocker during the perioperative period. • SCIP-VTE-1 surgery patients with recommended venous thromboembolism prophylaxis ordered. • SCIP-VTE-2 surgery patients who received appropriate venous thromboembolism prophylaxis within 24 hours. • Nurse communication. • Doctor communication. • Hospital staff responsiveness. • Pain management. • Medicine communication. • Hospital cleanliness and quietness. • Discharge information. • Overall hospital rating. 3 Mortality Measures • MORT-30-AMI Acute Myocardial Infarction (AMI) 30-day mortality rate. • MORT-30-HF Heart Failure (HF) 30-day mortality rate. • MORT-30-PN Pneumonia (PN) 30-day mortality rate. Represents a new measure for the FY 2014 program not in the FY 2013 program. HEALTHCHECK-2014 AND BEYONDFY 2014 MEASURES AND ITS IMPACT 25% 45% 30% Source: CMS official VBP web site.

19. HEALTHCHECK-2014 AND BEYONDVBP 2014

20. HEALTHCHECK-2014 AND BEYONDED QUALITY INDICATORS • Data collection began January 2012 • ED-1: Median time from ED arrival to ED departure for admitted ED patients • ED-2: Admit decision time to ED departure time for admitted patients • For more information on the ED Measures, go to: http://medicare.gov/hospitalcompare/Data/emergency-wait-times.aspx Reimbursement Impact! Source: CMS Specifications Manual 4.0c

21. HEALTHCHECK-2014 AND BEYONDCOMING SOON TO AN ED NEAR YOU "A patient's experience in an emergency department is an essential component of their overall healthcare experience in a hospital, and we believe that a patient survey evaluating such care will further support the HHS's goals and priorities.“ - CMS statement on patient satisfaction surveys • December 10, 2012 • Pain control • Wait Times • Communication with Provider Source: Fierce Healthcare. ED Patient Satisfaction. The Future of Reimbursement.

22. RISK & FINANCE: IMPACT POINTS

23. RISK & FINANCE: IMPACT POINTSWHAT IS THE VBP CONNECTION? • Patient throughput and flow issues • Medication reconciliation • Patient complaints • Efficiencies of Ancillary Departments (lab, pharmacy) • Individualization of patient care/treatment plans, including discharge plan and education • Rapid Response and Emergency Care • Claims & Liability • Medical Errors, Reporting, & Disclosure • Health Information Management (EMR, HIPAA, HI-TECH) • ER Efficiencies and Turn Around Times • Transition of Care Delays • Readmissions (Preventable) • Hospital Acquired Conditions • Sentinel Events • Patient Complications • Regulatory Audits/Surveys/Sanctions • Mortality Review • Medical Record Gaps or Lack of Documented Medical Necessity

24. RISK & FINANCE: IMPACT POINTSSTAYING STRONG IN THE MIDST OF REFORM

25. UNHEALTHY HOSPITALS “COLLATERAL RISKS”

26. UNHEALTHY HOSPITALS “COLLATERAL RISKS” • Financial Risks (Noted Previously) • Operational and Reputational Risks • Medical Malpractice/Litigation • Underwriter / Carrier Issues • Regulatory and Accreditation Impact • Public Consumer Opinions • Adverse Events/Mandatory Reportable Events • Mortality and Morbidity • Employees, Physicians, Residents, Students Satisfaction Scores • Impact on Managed Care Contracting, Hospital Rating & Business Partner Relationships

27. HEALTHY HOSPITAL SOLUTIONS

28. HEALTHY HOSPITAL SOLUTIONS • Value Based Purchasing Solutions • ED throughput • Readmissions reduction and management • Revenue cycle and clinical documentation improvement Programs

29. Customer Service – Door to Departure Arrival, Registration and Triage Waiting Test and Treat Observation, Reassessment and Admission or Discharge ED Intake ED Throughput ED Output • Quick Registration • Triage • Bypass • Protocols • Med Reconciliation • MSE • D2D • Waiting Room • Rounding • MSE • Testing – Radiology/Laboratory • Case Management • Diversions • Direct Admits • Barriers to A/D/T • Consultants • Orders • Boarders • Diversions HEALTHY HOSPITAL SOLUTIONS CLINICAL HEALTHCARE CONSULTING SERVICES

30. HEALTHY HOSPITAL SOLUTIONS CLINICAL HEALTHCARE CONSULTING PROGRAMS Readmissions Reduction and Management The last readmission group is considered as preventable – or avoidable – readmission. There is a great potential to reduce the number of this type of readmission by identifying causes and developing preventable strategies in hospitals and community settings. Source: CMS official VBP web site.

31. HEALTHY HOSPITAL SOLUTIONS READMISSIONS REDUCTION & MANAGEMENT STRATEGIES • Facility and provider practice risk impact analysis • Technology • Pre-admission • Hospital admission • Care transition coordination

32. HEALTHY HOSPITAL SOLUTIONS CLINICAL HEALTHCARE CONSULTING PROGRAMS • Revenue Cycle and Clinical Documentation Improvement Programs • Operations Review • ED Case Management • ED Throughput • Denial Management • Billing, Coding and Clinical Documentation Improvement • RACS/MICS/ZPICS/Medical Necessity

33. QUESTIONS

34. VBP RESOURCES • CMS official VBP web site: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/index.html • CMS VBP fact sheet: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/Downloads/FY-2013-Program-Frequently-Asked-Questions-about-Hospital-VBP-3-9-12.pdf • Refer to the Hospital VBP Final Rule for more information on the Hospital VBP quality measures: http://www.gpo.gov/fdsys/pkg/FR-2011-05-06/pdf/2011-10568.pdf. • For detailed information on the Hospital VBP program, refer to: http://www.cms.gov/Hospital-Value-Based-Purchasing. • For further details about scoring for the FY 2013 Hospital VBP program, refer to the July 2011 Open Door Forum: http://www.cms.gov/Hospital-Value-Based-Purchasing/Downloads/HospVBP_ODF_072711.pdf.

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