Community-Based Care Transition Program: Setting a Price

1. Community-Based Care Transition Program: Setting a Price Discussion Guide – Triple Aim, Care Transitions July 12, 2011 Joanne Lynn and the Triple Aim/Beacon team from Cincinnati and The Beacon team from Tulsa And all the rest of us, including some guests

2. Some baseline considerations on: Interventions Price charged Payment

3. The intervention(s) must decrease Medicare expenditure by • Improving care transitions, and thereby • Reducing hospital readmissions • Without causing more than balancing increases in other Medicare costs (the solicitation mentions only rehospitalization, ER use, and observation stays – not post-acute care, non-hospital interventions, medications, etc. This simplifies things for the application, but not for the eventual continuation of the project – which will require overall savings, most likely)

4. The price • Has no upper or lower limit at this time • Applicants must justify their “blended rate” or price per eligible discharge by explaining the origin of the price requested • And must set a “Not-to-exceed” total amount that their work could occasion over the whole 5 years • and this must predict overall savings

5. Payment: rate per eligible discharge • Rate=∑ cost for delivering intervention/# of eligible discharges • Rate can increase over time with inflation • Rate can require blending by different interventions for targeted populations

6. Things to consider when calculating costs • First - get very clear as to what you intend to do, what it will take to do it, whether you have enough experience to base reasonable calculations, what will be needed for expansion of existing pilots (inclusion of more sites, data, doing more with HIT, ongoing monitoring and improvements) • Second – know your own systems well – are there really motivations to do this work and succeed? Are there champions for the reform needed? If working across non-traditional groups in a coalition, is there commitment to some governance and ability to handle the funds well? Have you thought through the risks and benefits and can convince yourself that you have a good plan? Delays in getting started are a common way for this sort of intervention to fail • Continued…

7. Then consider - TARGETING – what hospitalized patients will benefit most from? What will you set out to learn – e.g., about expanding your current trial with one disease to all Medicare patients? While all Medicare hospitalizations run substantial risks of rehospitalization, there are still beneficiaries with very high risks and others with much lower risks, and not all risks are modifiable (at least with the interventions you propose). Some teams want to focus more energy on the very high risks or certain modifiable risks and put in place a low-cost monitoring and fall-back for the lower (perhaps with a mid-range option as well). Be sure you have thought through how to recognize optimal effect and bow out of the situation! • Finally, consider how you intend for the project to evolve—different people, changing roles, more standardization, etc. Especially, consider whether you mean for new jobs to be permanent additions to health care as initially designed (or, for example, if you believe the added services could diminish with standardization and inclusion of some roles in other persons’ jobs)

8. What goes into the price? • Personnel • include title, base salary and % of time spent on the intervention. Also note any possible change in base salary and at what rate. • Includes staff determining eligibility, coaching, providing supervision & oversight, delivering intervention, recruitment and training (after the initial cost), and technical support. • Includes fringe and benefits in accord with usual practice • Includes cost of recruitment and turnover – but NOT initial training for at least the first set of implementers – CMS presumes that you are already doing this and don’t need initial training • CMS has not given guidance as to whether costs of scaling up to cover more patients or facilities are acceptable costs. • Travel • Cost of traveling to Baltimore, MD for three annual meetings including hotel costs at government approved rates and local traveling ARE PROBABLY NOT COVERED – these will need to be covered in overhead or in other sources. (would be good to have a letter acknowledging intent to cover these, e.g., from a hospital partner or a local philanthropy) • Equipment and Supplies • Cost of leasing medical or IT equipment, software for information exchange and tracking, screening tools, office supplies, etc. • Other costs - A reasonable overhead for rent, costs of administration, costs of insurance, etc (Note – CMS has not said anything about overhead or indirect)

9. Considerations • Making salaries from piecework (hire a coach as FTE, pay for it in per-patient reimbursement) • Costs of training, replacement, for core personnel • Costs of coalition building, community standard-setting, professional and public education • Costs of data collection, monitoring locally, participating in national learning • Effect of patient refusal • Effect over time of population education and standard-setting – how will this evolve, and when • Potential reactions (e.g., to losing billings or control)

10. Link to Budget worksheet (opens directly in excel): http://www.cms.gov/DemoProjectsEvalRpts/downloads/CCTP_ApplicationBudgetWorksheet.zip

11. Completing the budget worksheet • For each row in the worksheet do the following: • Describe how you arrived at the given rate, number or percent • Explain your assumptions and possibly the effect of falling within a range • Consider carefully the potential effect of patient refusal • Include any variations in the estimates by year, intervention model used, or hospital. This can be done by subdividing the columns under each model into separate years. • For Row A (annual Medicare beneficiaries): include the year and growth rate used to calculate annual Medicare admissions • For Row C (180-day episode): Each eligible beneficiary can only be counted once in a 180-day payment period regardless of the # of admissions. • For Row J (hospital admission rate): If using a figure other than $9,600, please describe the rationale behind your cost.

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