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Explore the shift towards value-based care in Medicare physician payment, bundled payments, and the implications for physiatrists. Learn how Medicare's new payment system incentivizes quality care and cost containment.
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Value-Based Payment Systems: How Will They Change The Delivery of Care? Robert Mechanic, MBA Brandeis University American Association of Physical Medicine and Rehabilitation October 3, 2015
Overview What’s happening to Medicare physician pay and value-based pay generally? Medicine through an episode of care lens Post-acute care: The next frontier in Medicare cost containment Implications for Physiatrists
Progress on Value-Based Care? Jonathan Oberlander and M Laugesen, Leap of Faith – Medicare’s New Physician Payment System NEJM September 24, 2015 “At this juncture, 'volume to value' is as much (or more) a marketing slogan as it is actual policy”
Progress on Value Based Pay? 50% CMS Goal: 50% in APMs by 2018 38% 31% 15% 6-7% Mass Commercial in APMs4 Medicare Beneficiaries in ACOs1 Non-Medicare Beneficiaries in ACOs2 Medicare Beneficiaries in MA3 Mass Medicare ACO (Guess) Sources: CMS (1); Calculated based on Levitt Partners (2); KFF (3); Mass CHIA 2015 (4).
10-Year Avg. Change in Physician Payment Under Merit Based Incentive Program $102 Source: 2014 Medicare Trustees Report Brandeis University
10-Year Change in Physician Payment Under Merit-Based Incentive Program $111 $102 $93
Scoring System for MIPS Today 2019 PQRS VBPM MU
10-Year Change in Physician Payment Under Merit-Based Incentive Program $136 $111 $102 $93
Alternative Payment Models? Bundled Payments PCMH Payments ACOs & Global Payments Stuff We Haven’t Seen Yet
A Brief History of Bundled Payment 1983 1993 2007 2009 2010 2014 2016 Medicare Heart Bypass Demo Medicare Acute Care Episode Demo Medicare BPCI Medicare Inpatient DRGs Private Efforts: ProvenCare Prometheus Medicare CCJR & OCM Affordable Care Act
Bundled Payment Payer Single payment to cover costs of episode of care (30, 60, 90 days) $$$ Shared Accountability $ $ $ $ $ Group is responsible for all care within the episode Hospital or Integrated Network
Prospective Retrospective • Target budget for each episode • All providers paid FFS • Periodic CMS settlements • Distribute surplus • Reclaim deficit • Health system decides • Whom to contract with • How to distribute bonuses $$$ $ $ $ $ $ Hospital or Integrated Network
BPCI Models Model 1 Outpatient Professional Professional services Inpatient Professional Index Hospitalization Readmission SNF Inpatient Stays 90 day look-forward
BPCI Models Model 2 Outpatient Professional Professional services Inpatient Professional Index Hospitalization Readmission SNF Inpatient Stays 30 - 90 day look-forward Brandeis University
BPCI Models Model 3 Outpatient Professional Professional services Inpatient Professional Index Hospitalization Readmission SNF Inpatient Stays 30 day look-forward Brandeis University
BPCI Models Model 4: Prospective Payment Outpatient Professional Professional services Inpatient Professional Index Hospitalization Readmission SNF Inpatient Stays 30 day look-forward Brandeis University
Choices for Bundlers • Select bundles • 48 bundles (encompassing DRG families) • Covering about 70% of Medicare payments • Exclusions (not optional) • Readmissions and Part B services • Generally exclude transplants, trauma cancer • Include all medical readmissions (328 for 469) • Select bundle length (30, 60, 90) Brandeis University
Gainsharing • CMS gets first 2 - 3% of savings • Additional savings can be shared between facility, physicians, post-acute providers • Physician gain share capped at 50% of Medicare • No cap on other providers • CMS approves gain share plans • Payments must be linked to quality Brandeis University
Financial Model 2009 - 12 2014 Historical Cost Per Episode Target Price Update Factor* CMS Discount $18,382 * For illustration update = 1%/yr discount = 2% $18,200 Settlement $982 Actual FFS Cost Episode Definitions Risk Tracks $17,400
BPCI Enrollment Now Exceeds 2000 Average Participant is at Risk for 5 Episodes Source: CMS BPCI Analytic File as of 7-15-2015. Numbers here may differ from other estimates because of duplicate participant names. Brandeis University
The Financial Opportunity of Bundled PaymentMedicare Spends a Tremendous Amount in the 30 – 90 Days After Patients Are Discharged from the Hospital
Medicare Post Acute Care Spending Brandeis University
Average 2013 Medicare Inpatient Payments Select Episodes for Sample Hospital Source: Brandeis University analysis of Medicare Claims.
Avg. 2013 Medicare 90-Day Episode Price for Index Stay & Post Acute: Sample Hospital 29% 45% 48% 70% 71% 69% Source: Brandeis University analysis of Medicare claims data.
Hospital AdministratorsThinking About Post-Acute Care Brandeis University
There is Significant Variation in Post-Acute Care Spending Across Hospitals ….…. And Many Opportunities to Reduce Post-Acute Care Spending
Average 2009 Post-Acute Care Spending per Episode for Total Joint Replacement (90 day) $12,000 $6,000 “St. Minimus” “St. Maximus” Source: Brandeis University analysis of Medicare Claims data. Figures adjusted for hospital wage index.
A Tale of Two Hospitals: Joint Replacement Episode Source: Brandeis University analysis of Medicare Claims data. Unadjusted data.
A Tale of Two Hospitals: Joint Replacement Episode Source: Brandeis University analysis of Medicare Claims data.
Opportunities for St. Maximus • Expand home health and reduce use of SNF services where appropriate • Put a program in place to monitor patients following discharge • Medication reconciliation • Home assessment • Primary care visit within 7 days • Emergency plan for likely events • Consider preferred relationships with collaborative & high value facilities.
Post-Acute Care – The Next Frontier for Controlling Medicare Spending
Post Acute Strategy Components • Right setting • Right partners • Right relationships • Patient & Family • Primary Care Physician • Post-Acute Providers
2008 Medicare Post-Acute Care Payments Per User by Site of Service: DRG 470 (Total Joint) Within 30 Days of Hospital Discharge Percent with Service: 100% 60% 40% 7% 0.2% 9% Source: RTI Inc, Post-Acute Care Episodes: Expanded Analytic File, June 2011
Medicare Payment Methods • SNF: Per-diem payment with therapies billed separately • Patients covered for up to 100 days • Home health: 60-day bundle • Inpatient Rehab: Prospective per case payment (similar to DRG method) • 60 percent of patients must have one of 13 conditions
Variation in 2010 Medicare Average Length of Stay for Skilled Nursing Facilities 61 Difference Between Top & Bottom Quartile 10 Days = $4,000+ 34 29 34 24 29 24 5 Source: Adapted form Office of HHS Inspector General December 2010.
2013 Average SNF Spending Per Admission for A Hospital’s Total Joint Replacement Patients Top 6 SNFs by Number of Admissions for **** TJR Patients Source: Brandeis University analysis of Medicare claims data. All SNFs have 10+ cases.
Variation in 2009 Risk Adjusted Readmission Rates from Skilled Nursing Facilities Source: MedPAC Report to Congress, March 2012.
Post-Acute Care – The Next Frontier for Controlling Medicare Spending
Pioneer ACO Post-Acute Strategies • Preferred SNF network • SNF rounding teams and case managers • Improve quality • Manage LOS • Reduce readmission • Direct SNF admissions – 3-day waiver • Financial incentives • Many other pilots
Atrius Health SNF Program: Better Results Facilities with Atrius Employed Clinicians: Facilities:16 ALOS: 13.9 Readmit rate: 8.3% Cost/Case: $7,624 Preferred Facilities: Facilities: 20 ALOS: 15.8 Readmit rate: 8.4% Cost/Case: $9,395 All Others Approx. 240 Facilities ALOS: 22.3 Readmit rate: 10.9% Cost/case $11,249
Percent of ACOs With Core Partners (N=60) Source: L&M Policy Research. Pioneer ACO Findings from PY1 and PY2, March 2015. Note: Finding based on ACO interviews: Pioneer (23); AP-MSSP (20); MSSP (17).
Percent of ACOs With Developing Relationships by Provider Type (N=60) Source: L&M Policy Research. Pioneer ACO Findings from PY1 and PY2, March 2015. Note: Finding based on ACO interviews: Pioneer (23); AP-MSSP (20); MSSP (17).
WalMart Center of Excellence Program • Employees have no out-of-pocket costs if they get selected spine, heart or transplant procedures at one of six “centers of excellence”: Cleveland Clinic; Mayo Clinic; Virginia Mason; Scott and White; Geisinger; and Mercy Hospital.
WalMart Center of Excellence Program Two years into the program, an unexpected pattern is emerging: the biggest savings and improvements in care are coming from avoiding procedures that shouldn’t be done in the first place. AtulGawande, Overkill, The New Yorker
Avoiding Unneeded Surgery = VALUE