Moving to Accountable Care

1. Moving to Accountable Care Delaware Organization of Nurse Leaders John Van Gorp, Sr.Vice President Planning & Business Development September 2011

4. The Growing Crisis – How Can Providers Help? Healthcare expenditures projected to be 17% of GDP in 2010 $2.3 Trillion Health Care Expenditures ‘08 $1.1 Trillion (47%) - Public Payments Public expenditures for healthcare projected to exceed 50% of total in 2010! 4

6. US Health Reform 2010 Two-pronged approach to redesign of the US Health Care System. Who will lead “Delivery System Reform”? Coverage Expansion Individual Mandate Insurance Reform Medical-Loss Ratio US Health Care Reform ACO New Org Structures PCMH Delivery System Reform Value-Based Payments Payment Reform Bundled Payments • PCMH = Patient Centered Medical Home • ACO = Accountable Care Organization 6

9. Major Payment and Delivery System Initiatives – ACA 2010 2011 - Primary Care Pay – 10% bonus for 5 years Medicaid payment penalty for Hospital Acquired Infections (HAI) 2012 - Rewards for hospital value-based purchasing (quality bonus) Hospital penalty for preventable readmissions ACO shared savings payment potential State pilots on acute care bundling 2013 - National voluntary pilot program on bundled payments for hospital care 2014 - Primary care Medicaid payment increase to Medicare levels 2015 - Value-based payment program for physicians Hospital Medicare payment penalty for high HAI rates ACA Roll-out 9

10. Value Based Reimbursement – in FY 2012 • No reimbursement for several Hospital acquired events: (Stage III & IV pressure ulcers, catheter associated UTI’s, central line related infections, surgical infection following CABG, bariatric surgery and certain orthopedic procedures, hospital falls with injury, others in an expanding list) • No reimbursement for “excessive” readmissions of CHF, AMI or pneumonia pts (currently 1 Delaware Hospital affected). • Increase/decrease of Medicare payments began July 1, 2011 based on Patient Satisfaction, SCIP, tougher AMI, CHF and Pneumonia measures

13. CMS ACO Pilot Program Eligible ACO pilot organizations must be able to demonstrate the following six (6) capabilities: Processes to promote care quality, report costs and coordinate care 2. Management and leadership structure for decision making 3. Formal legal structure that allows the organization to receive/ distribute bonuses to participating providers ------------------------------------------------------------------------------- 4. Include PCPs (5,000 Medicare beneficiaries) 5. Contracts with a core group of specialist physicians 6. Participate for a minimum of three (3) years 13

15. The Path to the ACO - Delivery System Reform Integrating the three components of the delivery system into a single entity FFS P-4-P, Bundles Global Cap H CIN P ACO P-4-P I I H = Hospital P = Physicians I = Insurers CI = Clinical Integrated Network ACO = Accountable Care Organization 15

16. CIN Clinically Integrated Network 16

17. New Model Definitions A “qualified clinically integrated arrangement” isan arrangement to provide physician services in which: All physicians who participate in the arrangement participate in active and ongoing programs of the arrangement to evaluate and modify the practice patterns of physicians and create a high degree of interdependence and cooperation among these physicians, in order to control costs and ensure the quality of servicesprovided through the arrangement; and Any agreement concerning price or other terms or conditions of dealing entered into by or within the arrangement is reasonably necessaryto obtain significant efficiencies through the joint arrangement. FTC Economic Integration Clinical Integration • Capitation • 1990’s Source: Statements of Antitrust Enforcement Policy in Health Care by the FTC and the U.S. Department of Justice, Statement 8 17

18. Clinically Integrated Networks In a Clinically Integrated Network: “Physicians and Hospitals cooperate and modify practice patterns in order to control costs and ensure the quality of services” Definition from Federal Trade Commission Hosp CIN Phy ACO P-4-P I I

19. Health Reform and a Clinically Integrated Network – What does it mean for you? • Major focus on measurable outcomes, with Medicare, Medicaid and soon commercial reimbursement linked to Patient Service and Clinical results, which means... • Outcomes matter; from Board goals to your Department, to individual performance reviews. Pay attention to the data; focus on specific targets you can influence. • Better sharing of data and coordination of care across the Hospital-Community spectrum, with private physicians, home care and others. • Change!