APM Project Approach: Transforming Healthcare Delivery with Alternative Payment Models

1. Project Approach for Alternative Payment Model (APM)

2. Alternative Payment Model (APM) Background • The Department of Health and Human Services has announced an effort to replace 30% of Medicare fee-for-service (FFS) payments with Alternative Payment Models (APMs) by the end of 2016 and 50% by 2018. • In general, APMs will make one bundled payment that covers all services provided by facilities and physicians during an episode of care, instead of paying for discrete services, as in FFS payment. • The intent of bundled payment is to: (1) decrease health care spending while improving quality by creating a financial incentive for providers to eliminate services that are clinically ineffective or duplicative and (2) encourage coordination of care by holding multiple providers jointly accountable, through shared payment, for the cost of a bundle of services.

3. Alternative Payment Model (APM) AltaMed’s Business Case • As the largest FQHC in California, AltaMed needs to validate the viability of the future structure of bundled payment models (e.g. APMs) proposed by the CMS, especially if APMs may prove to be a long-term solution that fundamentally transforms the delivery system, a stepping stone to capitation, or simply a small contributor to efforts to improve quality and control costs.

4. Alternative Payment Model (APM) California Primary Care Assoc. APM Readiness Timeline

5. Alternative Payment Model (APM) AltaMed’s APM Project Approach • Financial Modeling • Rate Determination • Financial & Encounter Data Reconciliation • Encounter Reporting • Conversion of encounter information into 837 and 835 files • Stakeholder Engagement • Government & Legislative Advocacy • Test Period • Implement APM at Pilot Clinics • [Go-Live: July 2017]

6. Alternative Payment Model (APM) Phase 1 Approach (High-Level Work Breakdown Structure)

7. Phase 1 Alternative Payment Model (APM) Phase 1 Approach ► Develop method for encounter data processing and tracking of data and capitation flow. ► Transformation of medicine piece: project how many encounters can be transformed into new visit associated with APM. For example, what % of previous visits can be transformational? Can we identify any cost savings (e.g. cost difference between fee-for-service and APM)? ► How to use patient-centered medical home to organize primary care that emphasizes care coordination and communication to transform primary care into what patients want it to be while increasing quality and lowering cost. ► How to “push” encounter information into 837 and 835 files (i.e. operations and reporting) ► Determine how to reconcile financials, encounter data processing, data and capitation flow on a monthly basis post APM implementation. ► Revisit encounter data process piece (e.g. eligibility verification). ► Revisit encounter reporting piece (e.g. how to compute visits to meet HRSA requirement). ► Revisit capitation process piece. ► Determine what dashboard and KPIs need to be created. • Financial Modeling • Rate Determination • Financial & Encounter Data Reconciliation • Encounter Reporting • Conversion of encounter information into 837 and 835 files

8. Phase 2 Alternative Payment Model (APM) Phase 2 Approach ► Create the following workgroups to firm up the project plan: (a) Finance & Capitation, (b) Data & Systems, (c) Patient Encounter Transformation, and (d) Government & Legislative Advocacy. • Stakeholder Engagement • Government & Legislative Advocacy