Navy Medicine Business Planning

1. Navy Medicine Business Planning 20 July 2006 Prepared by: Captain E. C. Ehresmann, Ph.D., CAAMA, MSC, USN Prepared for: Patient Administration Course

2. Impetus for Change –The “Why” • Legislative Changes (TFL) • Resource Allocation to be based on Productivity • Leadership Direction (HA/HASC Language 3/03, SG/Measures of Performance) • Rising Health Care Costs • Larger Number of Beneficiaries & Growing

3. Paradigm Shifts • Prospective Payment System (PPS) • Performance Based Budgeting with Fee for Service (FFS) • Reality - Will have some elements of old and new for awhile…we are in a transitional state

4. Why Business Planning? • Data, metrics and performance objectives are available • Systematic processes to monitor and improve performance are lacking (Such as peer group reviews) • Business plans set specific goals and provide a roadmap for optimizing performance and funding

5. Assumptions • Resources and services are documented and accounted for • Economies of care provided in the MTF are in place • Proficiency in documenting and coding services • Time and effort expended on Readiness is documented • Providers can achieve production targets and have the necessary resources

6. Bottom Line • If the cost of government health services is not comparable to civilian benchmarks, we are at risk. • MTF metrics will be compared to set Benchmarks. Examples of Benchmarks: Expense per RVU, Expense per RWP, Total Expense per Enrolled Beneficiary (PM/PM), Cost per DWV • The MHS must provide care in a timely and efficient manner

7. BUMED Business Planning Tool Annual Business Plan Requirements Data Quality Revised Financing Mission Market Access Personnel Workload Alignment Net Value Prioritization Financial Model Production Model MEPERS MTF Business Plan APF RVU Core Business Enrollees Standard Organizational Codes Value of Care Produced Market Segmentation Eligibles Non-Enrollees Opsut Spreadsheet Template Management Should do vs. Could do FY05 Business Planning Concept

8. BUMED Business PlanningGuiding Principles • Manage network expenses for MTF enrollees • Improve MTF documented productivity • Meet all operational taskings • Improve customer satisfaction with access • Improve critical internal processes (appointing and referral management) • Institute evidence based medicine • Improve data quality

9. MHS Mission: To enhance DoD and our Nation’s security by providing health support for the full range of military operations and sustaining the health of all those entrusted to our care MHS Core Mission Elements Medically Ready and Protected Force and Homeland Defense for Communities Deployable Medical Capability Manage and Deliver Beneficiary Care Strategic Priorities Improve MHS Efficiency and Effectiveness Coordinate Research and Development Programs Achieve Jointness and Interagency Cooperation Sustain the Health Benefit

10. Alignment • Strategic Plan is done at Headquarters • BUMED mission and vision • Surgeon General’s Vision • Surgeon General’s Priorities • Readiness – Aligned and Agile • Quality, Economical Health Services • One Navy Medicine – Active, Reserve and Civilian • Shaping Tomorrow’s Force • Joint Medical Capabilities

11. Surgeon General’s Five Priorities Perspectives of MHS Balanced Score Card • Readiness – Aligned and Agile • Quality, Economical Health Services • One Navy Medicine – Active/Reserve/Civilian • Shaping Tomorrow’s Force • Joint Medical Capabilities • Stakeholder/Financial • Customer • DoD Beneficiaries • Commanders • Service Members • Internal Process • Patient Centered • Mission Centered • Learning & Growth • Organizational Culture • Human Capital • Science & Technology • Resources Navy Medicine Measures of Performance (MOPs) • Drive Warfighter Medical Readiness • Maintain Deployment Readiness • Shape Force Structure • Shape Civilian Structure • Optimize Production • Drive Down Cost • Accelerate Agility Business Plan Alignment

12. https://triservicebps.afmoa.af.mil FY07 Tri-Service BusinessPlanning Tool

13. FY07 Framework for MTF Healthcare Delivery • Production Plan based on Supply and Demand • 8 Critical Initiatives • Optimize Provider Productivity • Improve Access to Care • Manage Referrals • Improve Labor Cost Reporting and Management • Advance Evidence Based Health Care • Improve Documented Value of Care (coding) • Manage Pharmacy Expenses • Readiness/Expeditionary Planning

14. Driving Force • MHS Budget Concerns Continue • Currently $36B…projected to grow to $50B by 2010 • Annual Rate of Growth in MHS Budget is 8%...compared to Pentagon’s 3-4% • Increased cost share reshaping the pharmacy benefit • More beneficiaries Reference: DoD Healthcare Spending Doubled in Past Four Years, American Forces Press Service. Jan. 25, 2005. http://www.defenselink.mil/news/Jan2005

15. Readiness Readiness +”Inflation” Value of Health Care Provided “Other” “Other” +”Inflation” Value of Health CarePlanned Effect of Business Plans on Direct Care Budgets Prospective Funding for Budget Year Business Plan (based on number of enrollees and nonenrollee care provided) Prior Year Funding • Budgets will reconcile • performance against the plan

16. PPS – Where We Are • PPS applied in FY05 initial allocation • 25% blend with traditional budget • PPS applied at Mid Year • Based on most recent 12 months • 25% blend with traditional budget • PPS to be applied to FY06 allocation • Based on recent business plan • 50% blend with traditional budget • Rate calculations being done now for PPS – HA sets the tone.

17. Results of PPS FY05 PPS RESULTS – PPS VALUE (25% of Service Budget) Desired Outcome: Actual above Plan

18. FY07 – PPS Next Steps • Monitor FY06 performance to plan • Apply to future budgets • FY07 = 75% blend with traditional budget • FY08 = 100% PPS • Incorporate ancillary and pharmacy data

19. How to use the tool • For each module: • Validate the base year with • Source data system (M2) • Reality check • Adjust the module for • Projected changes from base year • Review summary data before moving to next module

20. Begin at the beginning • Guidance • Who gives guidance • TMA to Services • TRO to MSMO • Services to Commands • What guidance did they give – FY06 (alignment) • Executive Summary • Production Plan – Prescriptive -Target Ranges • Critical Initiatives - 8 • Timeline – Usually very short for each stop • Approval process • Metrics/review process

21. The “How” • Teamwork with variety of skill sets • Executive direction • Human capital management • Resource management • Data quality/flow management • Clinical management • Clinical support process management • Contingency planning • Performance improvement • Clinical leadership • Market management (MSMO)

22. FY07 ImproveAccess To Care • ATC Self Assessment • Minimum of two initiatives (select from menu) • Meet minimum access to care standards >90% • Exceed access to care standards >=95% • Primary care provider schedules reflect at least 30 days out • Primary care provider schedules reflect at least 45 days out • Decrease the primary care “Unused/Unbooked” appointment rate <5% • Decrease the primary care “No Show” rate <5% • Decrease the primary care “MTF Book Only” appointment rate <10% • Increase beneficiary appointment booking through TRICARE Online >10% • Increase TRICARE Online registration >=20% (of total enrolled beneficiaries) • Implement “Open Access” appointing (one clinic)

23. FY07 Readiness and Expeditionary Planning • Medically Deployable Force • Ready Medical Force • Impact of Deploying Forces • Contingency Template

24. FY07 Evidence Based Health Care • Continue FY06 Initiatives PLUS: • Healthy Weight • Dental Health • Tobacco Cessation VA/DoD CPG at http://www.qmo.amedd.army.mil/pguide.htm

25. FY07 Labor Cost Reporting and Management • PBD – 712 and POM impact and conversion plans • Labor Reporting – MEPRS accuracy

26. FY07 Manage Pharmacy Expenses • Direct Care Pharmacy • Data integrity • Inventory Management • Turnover and ordering processes • Purchased Care Pharmacy • TRICARE Mail Order Pharmacy referrals and marketing • Enrollee utilization of Network Pharmacy • Manage Pharmacy Expenses • Monitor Plan to Execution (SMART)

27. FY07 Optimize Provider Productivity • MGMA Benchmarks and the productivity expectations of each provider by specialty • Department level commitment to increasing productivity • Efficiency measures help • Workload capture is very important • Coding accuracy has direct impact on documented productivity

28. Region Productivity Thresholds & Targets • Enrollment • Working with the regional analysts, MTFs may propose increased enrollment levels • Thresholds • Thresholds are based on FY05 production levels • Thresholds are minimums and will be managed at the regional level • Targets • Specialty Productivity Standards are available and may be used to demonstrate what an MTF can produce, but those levels are not required

29. FY07 Manage Referrals • RM Self Assessment • Initiatives • Initiate, develop, and implement formal processes for referral management/tracking • Implement CHCS electronic consult tracking • Meet minimum specialty care access standards 90% of the time • Increase specialty self-referral availability and appting through TRICARE On Line • Initiate, develop and implement RM metrics • Timely return of results to provider • Ensure specialty care schedules available 30 days out

30. FY07 Improve Documented Value of Care • Completeness (code for all procedures performed in a visit) • Accuracy (for all coding) • Education and Training (ensure all education and training are properly recorded) • Record Availability (all visits must be documented in medical records)

31. FY 07 and Beyond • Focus on the 8 Critical Initiatives • Increase system efficiencies • Expand current foundation and integrate other areas into business planning (i.e. disease management)

32. Tool Time FY07 Tri-Service Business Planning Tool https://triservicebps.afmoa.af.mil TRICARE Operations Center http://toc.tma.osd.mil/cgi-bin/broker.exe

33. FY07-FY09Business Planning Tool A brief introduction to the Tri-Service Business Planning Tool for Navy Users

34. Elements of a Business Plan • Executive Summary • Contingency Plan • Production Plan • Access to Care Plan • Referral Plan • Coding and Documentation Plan • Labor Management Plan • Pharmacy Management Plan

35. Timelines • The tool is available now • MTF plans are due to the Regions by 01March 2006 • Regional plans are due to BUMED by 01 April 2006

36. Regions and Roles • Regions will provide direct assistance to the MTFs • MTF plans will be approved at the regional level • BUMED will evaluate the plans at an aggregate level by region • MSM plans follow a different path • Surgeons General will collectively approve the MSM plans in mid April.

37. APFs and the Business Plan • No direct connection • Plans will be analyzed for changes in requirements by the regions • BUMED will analyze the plans for changes that cross regional lines • For any changes in resourcing to be possible, analyses must be complete and demonstrate need

38. Critical Initiatives • Access to Care • Labor Reporting • Provider Productivity • Referral Management • Evidence-Based Health Care • Managing Pharmacy Expenses • Documenting the Care • Expeditionary Planning

39. Action Plans • Linkage • Problem Definition • Measurements • “Key Issue” • Best Practices • Approval Chain will be evaluating both quantitative and qualitative submissions during this process • Navy has the opportunity to lead the Services again

40. Measurements • Several measures are available through the tool • RVUs • RWPs • Financial Impact • Etc. • For those that are not available, supporting documentation is available • Impacts of the intended actions need to be expressed in quantitative and temporal terms

41. Technical Informationand Support • URL • https://triservicebps.afmoa.af.mil • EI/DS Contractor • IMS (Synchronous Knowledge • SGZI.Support@Pentagon.af.mil • Phone: DSN 297-5040 or 202-767-5040 • Regions • Implementation and coordination • URL • https://triservicebps.afmoa.af.mil • “Open Mike” • BUMED is coordinating a open session for help and assistance. More information to follow.

42. Questions?

43. Back up Slides on Coding

44. Short Coding Primer RVU RWP DWV DWLV

45. CodingRVUs • Resource Relative Value Scale-CMS • Reflects skill, time, and resources required for each patient encounter • Used to set standard fee schedule • Practice management tool • Productivity • Patient case mix • Compensation rates

46. CodingRVUs • Relative Value Unit is the coin of the realm • Measure of professional services • Gives valid estimate of physician work • The more difficult the service, the higher the RVU earned • Three components • Work RVU (55%) – Current DoD element • Practice Expense (42%) • Professional liability (3%) (considered in PPS Tables) *Locality factor is used to compensate for high cost of living areas (Incorporated into PPS Tables)

47. CodingRVUs • Evaluation and Management Codes – E&M codes represents the difficulty factor • Accounts for: • time, skill, effort, level of judgment, risk. • Simple RVU is sum of all CPT Values • 99213 – Office Visit = 0.67 RVU • 99214 – Office Visit = 1.10 RVU • 99291 – Critical Care first hour – 4.0 RVU • 47135 – Liver Transplant – 81.52 RVU

48. CodingRVUs • Coding issues • Provider specialty codes • Over coding • Under coding • DoD Guidelines vary in Industry • Training – professional trainers/ALTHA/CCE • Clinic processes to support best coding practices • Audits and data evaluation imperative

49. CodingRWPs • Relative Weighted Product – Inpatient • Facility related work effort for inpatient care • Includes institutional charges • Equipment • Inpatient staff • Overhead • Routine inpatient services (pharmacy, ancillary) • Exclusions • Professional services measured in CPT codes • Rounds encounters (E&M and other CPTs)

50. DWV/DWLV • Dental Weighted Value • Coded dental interventions • Industry based tables that attempt to equate level of effort and resources • One DWV is worth $100. • Tables are periodically updated • Dental Weighted Lab Value • Dental Lab production measure