Home Based Care & Value-Based Purchasing

1. paccr.org Home Based Care & Value-Based Purchasing Presented to the American Academy of Home Care Medicine by Barbara Gage, PhD Sr. VP, Scientific Research and Evaluation Post-Acute Care Center for Research May 14, 2015

2. Today’s Evolving HealthCare Environment • Affordable Care Act established the Triple Aim: • Improve quality of care • Improve population health • Reduce cost of care • New focus on patient-centered episodes of care, not silos of service-centered care • Congressional mandate for quality reporting programs for all Medicare services • Innovative payment methods focus on episodes of care and incorporate outcomes in the payment methodology

3. Payment Innovations in Public and Private Insurance Sectors • Quality adjustments for hospital readmissions in FFS • Value-Based Payment systems for Hospitals, Physicians, SNF, HH, ESRD • Shared savings payments in ACOs, Gainsharing, Medical Homes, and Bundled Payments • Coordinated Care Programs for Dual-Eligible populations • Rebalancing grants for state LTSS programs (BIP, SIM, TEFT) • Carve-out and other innovations proposed in both private and public insurance sectors

4. How Are these Innovations Changing The Health Care Marketplace? • Cultural changes incentivizing links between inpatient and community-based services • Coordination across caregivers (both medical and social support) • Communication/education of patient on options and available resources

5. The Medicare Population, 2010 Of the 47.6 million beneficiaries in the Medicare program: • Under 65 years old -- 16.9% • 65-69 years old -- 25.4 • 70-74 years old -- 19.2 • 75-79 years old -- 15.0 • 80-84 years old -- 11.8 • 85 years or older -- 11.8

6. Medicare Program Expenditures, 2010 National Medicare Expenditures in 2010 = $331B • Inpatient Hospital -- 38.9 % • Physician -- 28.7 • Outpatient -- 14.4 • Skilled Nursing Facility -- 8.2 • Home Health Care -- 5.9 • Hospice -- 3.9

7. What Types of Services Are Being Used In the Medicare Program? 20% of all Medicare beneficiaries hospitalized at least 1/year Admitted for a wide range of reasons including medical, surgical, functional diagnoses Over 40% of the hospital cases will be discharged to PAC Source: Gage et al. (2009). Examining post-acute care relationships in an integrated hospital system, ASPE, and MedPAC, (2014) June Report To Congress.

8. Utilization Patterns Following Hospital Discharge NOTES: 1. A=Acute Hospital; H=HHA; I=IRF; L=LTCH; O=Outpatient Therapy; S=SNF/ Source: Gage et al. (2009). Examining post-acute care relationships in an integrated hospital system, ASPE

9. Post-Acute Care Reform Momentum Building Continued momentum and legislative initiatives to transform Medicare FFS reimbursement system, and incentivize more efficiently managed PAC CMS FFS Shifts Focus to Managing Care • CMS releases 2 RFI’s • 2014: CMS announces BPCI expansion 2014: Sen Wyden introduces Better Care, Lower Cost Act • 2013: Bi-Partisan Bundling Legislation introduced in House • IMPACT Act becomes Law • 2014: BPCI programs rollout 2014: Rep McKinley introduces Bundling Legislation in House • 2012: Hospital Readmission Penalties instituted; up to 3% by 2015 • 2013: CBO Re-Scores Bundled Payments; White House & MedPAC join conversation • President’s budget includes PAC bundling savings • 2012: ACOs go live; now over 350 Medicare ACOs 2010: ACA passed 2019: Medicare FFS PAC Bundle ??? 2009: CMS ACE Demonstration 2005: DRA establishes PAC PRD

10. Mandated a PAC Payment Reform Demonstration to understand costs and outcomes across different PAC sites. Three components: CARE: Standardized patient assessment instrument to measure severity in hospitals, PAC settings Secure, electronic, interoperable standards-based data system for multiple providers to share essential health information/improve transitions Data collection to analyze costs and outcomes across sites (acute, SNF, HHA, IRF, LTCH) Deficit Reduction Act of 2005

11. ACA of 2010: Codified the Triple Aim- Better Outcomes, Better Population Health, Lower Health Care Costs  Patient Centered Care Payments Established new payment models to encourage providers to move to patient-centered care to achieve the Triple Aim: • Accountable Care Organizations – targeted hospitals and physicians • Built on various demonstration projects • PGP, HCQ, High Cost Clinically Complex • Medical Homes – targeted physicians to coordinate care • Bundled Payments – targeted hospitals and PAC providers, or physicians to coordinate care 11

12. ACA of 2010: Codified the Triple Aim- Better Outcomes, Better Population Health, Lower Health Care Costs  Patient Centered Care Outcomes • Established Outcomes Analysis Mechanisms • Hospital Reporting Metrics – • Hospital Acquired Infections – value matters • Broadened hospital responsibility • Established Hospital Readmissions program to account for 30 days post-discharge • Established Quality Reporting Programs for IRFs, LTCHs, Hospice • Rounds out the Medicare quality reporting programs to include remaining PAC providers 12

13. The Evolving National Quality Strategy • Establishment of the National Quality Forum • Development of scientific standards for measuring quality • Multistakeholder consideration of quality measures that meet 5 criteria: important to measure, scientifically acceptable (reliable and valid), feasible to collect, usable/actionable, other related metrics • Stakeholder Prioritization of measure development: NQF workgroups on coordinated care, person-centered care, Alzheimer’s Disease/Dementias, Health Care Quality for the Dual-Eligible, LTPAC populations

14. 2014 What about the political environment combined with the payment and delivery transformation efforts underway made now the time to construct and pass the IMPACT Act legislation for Post-Acute Care?

15. The IMPACT Act: What does it do? • Paves the way for “…standardizing post-acute care assessment data for quality, payment, and discharge planning, and for other purposes.” • All PAC providers including HH, SNF, IRF and LTCH’s included • Standardized collection on functional status, cognitive function, medical needs and conditions, impairments and other categories deemed necessary by Secretary • Some data are already submitted by each PAC provider, but varies by type of provider, Act calls for replacing duplicative data collection • Resource use data also collected to estimate per beneficiary spend • Includes payment refinement provisions via report from MedPAC to Congress in 2016 based on PAC PRD data and report from CMS

16. IMPACT Act Timeline for Quality Metrics by PAC Provider