©2013 cliftonlarsonallen llp cliftonlarsonallen.com innovation and risk: transitioning through...

©20

13 C

lifton

Lars

onAl

len

LLP

cliftonlarsonallen.com

Innovation and Risk:Transitioning Through Payment

Reform Activities

Indiana Rural Health Association17th Annual Rural Health Conference

June 10 – 11, 2014

©20

13 C

lifton

Lars

onAl

len

LLP

2

Discussion Overview

• Payment Reform: A Market in Transition

• Innovation Payment Models

• Regulatory Environment & Other Market Influences

©20

13 C

lifton

Lars

onAl

len

LLP

©20

13 C

lifton

Lars

onAl

len

LLP


Payment Reform: A Market in Transition

3

©20

13 C

lifton

Lars

onAl

len

LLP

4

True Reform Will Require Disruptive Innovation*

Simplifying Technology

Low Cost Business Models

Value Network

* Source: “The Innovator’s Prescription” by Clayton M. Christensen

Regulations & Standards

That Facilitate Change

©20

13 C

lifton

Lars

onAl

len

LLP

5

Supreme Court Examines Constitutionality

Individual

Mandate -

ConstitutionalEntire

Affordable Care

Act- StandsMedicai

d Expansio

n-State Option

U.S. Supreme Court Ruling: June 28, 2012

©20

13 C

lifton

Lars

onAl

len

LLP

6

The Foundation: Value-Based Payment Value Based Payment: “a reform initiative whereby health care providers will receive payment for service based on their performance or the potential outcomes of the service”

Tying payment to performance is perhaps the most significant aspect of health care reform.The de facto definition of “value” in health care reform is the intersection of lower cost and improved quality.

Providers who can lower costs and deliver quality will be measured as “value-based providers”

Value

Lower Cost

Improved Quality

©20

13 C

lifton

Lars

onAl

len

LLP

©20

13 C

lifton

Lars

onAl

len

LLP


Innovation Payment Models

7

©20

13 C

lifton

Lars

onAl

len

LLP

8

Where Payment Reform is Happening*

* Source: Americas Health Insurance Plans (AHIP) accessed via web on 9/3/13 at: http://www.ahip.org/searchResults.aspx?searchtext=payment reform activity

©20

13 C

lifton

Lars

onAl

len

LLP

9

Payment Reform Models Focus:Behavior-Intensive Diseases w/Deferred Consequences

Myopia

Hypothyroidism

Psoriasis

Allergies

Multiple Sclerosis

EpilepsyHIV

Depression

Infertility

Chronic Back Pain

GERD Crohn’s Disease

Celiac Disease

Ulcerative Colitis

Sickle Cell Anemia

Type I Diabetes

AsthmaCongestive HeartFailure

Type II DiabetesSchizophrenia

Alzheimer’s

Obesity

Addictions

Bipolar Disorder

Cerebrovascular Disease

Coronary Artery Disease

Parkinson

Cystic Fibrosis

Chronic Hepatitis B

Osteoporosis

HypertensionHyperlipidemia

Moti

vatio

n to

Com

ply

With

Be

st K

now

n Th

erap

y

Strong:ImmediateConsequences

Weak:DeferredConsequences

Degree to Which Behavior Change is Required

Diseases with deferred consequences

Beha

vior

dep

ende

nt d

isea

ses

Diseases with Immediate ConsequencesTe

chno

logy

Dep

ende

nt D

isea

ses

Source: “The Innovator’s Prescription” by Clayton M. Christensen

ExtensiveMinimal

Crushing costs of caring for chronically ill are in this quadrant: diabetes,

asthma, tobacco, obesity, CHF, affect tens of millions of people each.

©20

13 C

lifton

Lars

onAl

len

LLP

10

Beneficiaries Spending0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

14%

46%23%

28%

32%

19%32%

7%

Chronic Conditions Drive Medicare Spending

High Blood Pressu

re

High Cholestero

l

Ischemic

Heart Dise

ase

Arthriti

s

Diabetes

Heart Fa

ilure

Chronic

Kidney Dise

ase

Depressi

onCOPD

0%

10%

20%

30%

40%

50%

60%58%

45%

31% 29% 28%

16% 15% 14% 12%

Percent of Medicare Beneficiaries with Se-lect Chronic Conditions

Chronic Disease Burden on Medicare Spending*

6 or more conditions

4 to 5 conditions

2 or 3 conditions

2 or 3 conditionsZero or 1 condition

* Source: MedPAC March 2014 Report to Congress

Zero or 1 condition

4 to 5 conditions

6 or more conditions

©20

13 C

lifton

Lars

onAl

len

LLP

11

CMS Defined Innovation Models *• Accountable Care

– Medicare Shared Savings Program

– Medicare Advanced Payment ACO

– Pioneer ACO– Comprehensive ESRD Care

Initiative (LI/App.)

• Bundled Payment for Care Improvement– Models 1 through 4

* Arising as a result of Affordable Care Act (ACA), and excluding programs in effect prior to ACA.

• Primary Care Transformation– Comprehensive Primary Care

Initiative– FQHC Advance Primary Care

Practice Demonstration– Graduate Nurse Education

Demonstration– Independence at Home

Demonstration– Multi-Payer Advanced Primary

Care Practice

©20

13 C

lifton

Lars

onAl

len

LLP

12

CMS Defined Innovation Models *• Medicaid & CHIP Initiatives

– Emergency Psychiatric Demonstration

– Incentives for Prevention of Chronic Diseases Model

– Strong Start for Mothers & Newborns Initiative

◊ Reduce Early Elective Deliveries◊ Enhanced Prenatal Care Models

• Medicare-Medicaid Enrollees Initiatives– Financial Alignment Incentives– Reduce Avoidable

Hospitalizations Among Nursing Facility Residents

* Arising as a result of Affordable Care Act (ACA), and excluding programs in effect prior to ACA.

• Initiatives to Accelerate Testing & Development of New Models – Health Innovation Awards– State Innovation Models

• Initiatives to Speed Adoption of New Models– Community Based Care

Transitions Programs– Innovation Advisors Program– Million Hearts– Partnerships for Patients

©20

13 C

lifton

Lars

onAl

len

LLP

13

ACOs Continue to Grow

• On December 23rd CMS announced that 123 new organizations will join the Medicare ACO program effective January 1, 2014

• ACO enrollment has evolved and continued to grow since it was launched in April 2012:– April 2012 initial: 27 organizations– July 2012: 89 additional organizations– January 2013: 106 additional organizations– December 2011: 32 Pioneer ACOs, w/~ 23 remaining

• Total ACO participation – Over 360 organizations– More than 5.3 million beneficiaries– More than 50% of ACOs led by physician groups, with < 10,000

beneficiaries

©20

13 C

lifton

Lars

onAl

len

LLP

14

ACO Results to Date *• Pioneer ACO First Year Results:

– Cost Reduction/Shared Savings:◊ Cost growth rate for 669,000 beneficiaries .3% vs. .8%◊ 13 participants generated gross savings of $87.6 million◊ 2 participants generated losses of approximately $4 million

– Quality Metrics◊ 100% successfully reported quality measures◊ Overall performed better for all 15 clinical quality measures

• 25 of 32 generated lower risk-adjusted readmissions rates• Median rate for blood pressure control for beneficiaries with diabetes was

69% vs. 55% • Median rate for LDL cholesterol control for patients with diabetes was

57% vs. 48%

• CMS expects MSSP results later in year

* Source: CMS “Pioneer Accountable Care Organizations succeed in improving care, lowering costs” July 16, 2013

©20

13 C

lifton

Lars

onAl

len

LLP

15

Medicare Bundled Payments for Care:Medicare’s Largest Payment Innovation Program

More than 450 Providers Participating in BPCI1

BPCI1 Participation by State

Source: The Advisory Board

©20

13 C

lifton

Lars

onAl

len

LLP

16

BCPI Participants Favoring Longer Episodes

Participation by Model Type

Hospital Inpatient Services

Hospital and Physician

Inpatient and Post-Discharge

Services

Post-Discharge Services

Hospital and Physician Inpatient Services

Model 4Model 3Model 2Model 1

16%

36%

41%

7%

Source: Centers for Medicare and Medicaid Services; Health Care Advisory Board interviews and analysis.

©20

13 C

lifton

Lars

onAl

len

LLP

17

CMS Bundled Payments Initiatives: What is Being Bundled?

Source: The Advisory Board: “What are BPCI participants bundling?” by Rob Lazerow dated February 1, 2013

©20

13 C

lifton

Lars

onAl

len

LLP

18

Bundled Payments:Understanding Bundle Characteristics

Bundle Risk: Approximately 51% of total bundle costs occurred post-discharge!

Total Indexed Admissions 1,000

Total Admissions 1,327

Indexed Total Indexed Total Service Avg Cost Cost Avg Cost Cost

Hospital 12,040$ 12,040,359$ 8,662$ 8,661,981$

SNF 3,134 3,133,676 - -

HHA 2,169 2,168,509 - -

MD 3,535 3,535,248 1,975 1,975,175

All Other 654 653,696 - -

Total Costs 21,531$ 21,531,488$ 10,637$ 10,637,156$

Including Readmissions Indexed Admissions

CONFIDENTIAL: Subject to CMS Data Use Agreement #22626

©20

13 C

lifton

Lars

onAl

len

LLP

19

Bundled Payments:The Post Acute Care Path and Impact on Bundle

Avg Cost 30.0%

STAH $3,327SNF $12,608

20.0% HHA $1,675200 MD $1,928

All Other $843TOTAL $20,381

70.0%

Average SNF/HHA Cost per Episode $15,138

Avg Cost 21.0%

STAH $1,895SNF $839

18.0% HHA $4,150180 MD $1,531


79.0%

Avg Cost 34.5%

STAH $3,826SNF $743

62.0% HHA $1,752620 MD $1,450


65.5%

Community

Home Care

SNF

Readmit

NO Readmit

Readmit

NO Readmit

Readmit

NO Readmit

NO Readmit

NO ReadmitNO Readmit

Post AcuteCarePath

Acute Stay

Discharge

CONFIDENTIAL: Subject to CMS Data Use Agreement #22626

©20

13 C

lifton

Lars

onAl

len

LLP

20

• Payer: Walmart– Six Participating Providers:

◊ Virginia Mason Medical Center, Seattle, WA

◊ Mayo Clinic, Scottsdale, AZ , Rochester, MN & Jacksonville, FL

◊ Scott & White Memorial Hospital, Temple, TX

◊ Mercy Hospital, Springfield, MO◊ Cleveland Clinic, Cleveland, OH◊ Geisinger, Danville, PA

– Description: Beginning January 2013 1.1 million employees eligible for consultation and care for certain cardiac & Spine procedures at no additional cost. Walmart will cover cost of travel, lodging, and food for patient and one caregiver.

• Payer: PepsiCo– Participating Providers: John Hopkins,

Baltimore, MD– Description: Starting 12/11 began

waiving deductibles & co-insurance for employees who receive cardiac and complex joint replacement surgery at John Hopkins.

• Payer: Lowes– Participating Providers: Cleveland

Clinic, Cleveland, OH– Description: Contract for heart

surgery program; will waive $500 deductible, out-of-pocket costs, airfare, hotel and living expenses.

Commercial Insurance BPI Activity: Large EmployersCardiovascular & Spine Services Bundles

Source: The Advisory Board “Commercial Bundled Payment Tracker” accessed via web on 4/12/13 at:http://www.advisory.com/Research/Health-Care-Advisory-Board/Resources/2013/Commercial-Bundled-Payment-Tracker#lightbox/0/

©20

13 C

lifton

Lars

onAl

len

LLP

21

CMS Primary Care Transformation

• Comprehensive Primary Care Initiative– Multi-payer initiative fostering collaboration between public and private

health care payers.– 497 primary care practices covering 7 states

◊ Includes 2,347 providers serving an estimated 315,000 Medicare Beneficiaries

• Independence at Home Demonstration– Tests the effectiveness of delivering comprehensive primary care services to

Medicare beneficiaries with multiple chronic conditions at home. – Providers who succeed in reducing costs and meeting designated quality

measures will receive an incentive payment.– Participants announced in April 2012 and include 15 different practices in 12

different states

Source: The Centers for Medicare & Medicaid Innovation (CMMI)

©20

13 C

lifton

Lars

onAl

len

LLP

22

CMS Primary Care Transformation• Multi-Payer Advanced Primary Care Practice

– CMS participating in 8 states with multi-payer reform initiatives already being conducted in states.

– Demonstration focuses in on if advanced primary care practice will reduce unjustified utilization and expenditures, improve safety, effectiveness and timeliness and efficiency of health care services.

– Monthly care management fee is paid to cover care coordination, improved access, patient education, and other services to support chronically ill patients.

• FQHC Advanced Primary Care Practice– A three-year demonstration program designed to evaluate the effect of advanced

primary care practice model (commonly referred to PCMH) in improving care, promoting health, and reducing cost of care to Medicare beneficiaries served by FQHCs.

– 493 participating FQHCs will be paid a monthly care management fee of $6.00 (paid quarterly) per eligible beneficiary attributed to their practice.

– Fee is in addition to the usual all-inclusive payment rate currently received.


©20

13 C

lifton

Lars

onAl

len

LLP

23

Patient Centered Medical Home – Demonstration Project Overview *• Project Objectives:

– Identify and eliminate “gaps” in care– Reduction of health risk factors and enhancement of quality of life

• Focused Clinical Conditions:– Asthma – Coronary Artery Disease– Hyperlipidemia– Hypertension– Adult/Adolescent/Childhood Immunizations– COPD– Diabetes– Anxiety/Depression– Breast/Cervical/Colorectal Cancer Screenings– Vital & Others

* Source: BCBSMT Presentation at MT HFMA on PCMH Demonstration Project Results Fall, 2011

©20

13 C

lifton

Lars

onAl

len

LLP

24

Patient Centered Medical Home: Demonstration Project Incentive Plan*• Structure Incentives Based on Outcomes

– Participation Amount– Quality Outcome Amount– Patient Satisfaction– TCOC Amount– Incentive s for Both Improving & Achieving Targets

• Additional Payment Incentives– $200 PMPY for Care Management of Chronic Conditions– $100 PMPY for Care Management of Preventive Conditions

• Potential Savings– Reduced ER visits– Preventable Admissions & Re-Admissions– Improved Health Status– Increased Productivity, Employee Morale & Reduced Absenteeism

* Source: BCBSMT Presentation at MT HFMA on PCMH Demonstration Project Results Fall, 2011

©20

13 C

lifton

Lars

onAl

len

LLP

25

Patient Centered Medical Home: Demonstration Project Outcomes*

©20

13 C

lifton

Lars

onAl

len

LLP

26

State Innovation Model InitiativesProvides up to $300 million to support the development and testing of state-based

delivery system transformation models for multi-payer payment and health care delivery system.

©20

13 C

lifton

Lars

onAl

len

LLP

©20

13 C

lifton

Lars

onAl

len

LLP


Regulatory Environment &Other Market Influences

27

©20

13 C

lifton

Lars

onAl

len

LLP

28

Influencers of Medicare Reimbursement

• New formula for DSH payments.• Established requirements for

pay-for-performance initiatives

Patient Protection & Affordable Care Act (PPACA) March 2010

American Taxpayer Relief Act

January 2013• Grants CMS authority to

recoup “excess payments”in “exchange” for temporary SGR patch

CMS Annual Updates• ACA implementation• Value-Based-Payment• Readmissions• DSH Implementation

MedPAC & OIG2013 Reports

• “Payment equalization across sites of service”

• Elimination of CAH designation for 849 of 1,329 CAHs

• President Obama’s September 2011 budget

• CAH swingbed reimbursement vs. skilled nursing facilities

• Rural Health Clinic (RHC) designation and rules compliance

• Extends provisions of ATRA for 1 year

Protecting Access to Medicare Act of 2014

• Extended provisions of ATRA, including SGR, through 3/31/14

Bipartisan Budget Act of 2013

©20

13 C

lifton

Lars

onAl

len

LLP

29

MedPAC Pushing EqualizationPayment Pressures: “Good Ole Days” At Risk

“Last year we made a recommendation to equalize payment rates for office visits provided in hospital outpatient departments and physician offices. We will continue to analyze opportunities for applying this principle to other services and sectors, such as sectors that provide post-acute care.”

MedPAC 2013 Report to Congress

“Medicare often pays different amounts for similar services across settings. Basing the payment rate on the rate in the most efficient clinically appropriate setting would save money for Medicare… We extend that principle to specific services that meet the Commission’s criteria….”

MedPAC 2014Report to Congress

©20

13 C

lifton

Lars

onAl

len

LLP

30

MedPAC Payment Equalization Recommendations• Identified 5 criteria for services that are “good candidates”

– Frequently (> 50%) performed in physicians office – Minimal packaging differences across payment systems– Infrequently provided in ED– Severity no greater in HOPD then freestanding offices– Do not have a 90-day global surgical code

• Broke 450 APCs into two groups based on service category:– Group 1: 66 APCs

◊ Characteristics: No emergency standby required; no extra costs associated with complexity; no additional overhead

– Group 2: 42 APCs◊ Characteristics: Met 4 of the 5 above characteristics◊ Okay to exceed PFS rate, but only equal to cost of additional packaging

• Estimated reductions of $1.1B• LTCH Non-Chronic Critical Payment Rate

– Reduced from ~ $40,000/ case to ~ $12,000/case (similar to IP PPS)– Shift differential, ~ $2B, to IP PPS to increase outlier reimbursement for CCI patients

©20

13 C

lifton

Lars

onAl

len

LLP

31

Transitioning to a New Market Place *

Indiana Marketplace **

• Potential Size: 525,000

• Completed Applications: 229,815

• Enrollment: 132,423

• Estimate of Uninsured Eligible for Medicaid/CHIP: 94,495

• Assistance Eligible: 155,961

** Source: Department of HHS; “Health Insurance Marketplace: Summary of Enrollment for the Initial Annual Open Enrollment Period” 10/1/13-4/19/14.

* Source: State Reforum an online network for health reform implementation at https://www.statereforum.org/tracking-health-coverage-enrollment-by-state

©20

13 C

lifton

Lars

onAl

len

LLPTrading Price for Volume on the Public Exchanges

32

Expect Lower Provider Payment Rates, Less Patient Choice

Source: Mathews AW and Kamp J, “Another Big Step in Reshaping HealthCare,” Wall Street Journal, February 28, 2013, available at: www.online.wsj.com; Hancock J, “Aetna Cuts Predictions for Obamacare Enrollment,” Kaiser Health News, April 30, 2013, available at: www.capsules.kaiserhealthnews.org; Health Care Advisory Board interviews and analysis.

1) Pseudonym.

Anticipated Provider Reimbursement Rates for Exchange Plans

Catholic Health Initiatives Modest discounts from commercial rates

Tenet Healthcare Up to 10% below commercial rates Meriwether Hospital1

5% below commercial rates

WellPoint Inc.Between Medicare and Medicaid rates

Meyers Health1

10% above Medicare rates Case in Brief: Aetna Inc.

• Health insurer planning to sell narrow network exchange products in 14 states

• Searching for providers agreeing to lower rates in narrow network products

• Plans for rates to fall closer to Medicare than commercial reimbursement

Aetna’s Planned Reduction in Exchange Network Size

25%-50% reduction in exchange network size, compared to networks for typical commercial products

Millern Medical Center1

20% below commercial rates

http://www.online.wsj.com/

http://www.capsules.kaiserhealthnews.org/

©20

13 C

lifton

Lars

onAl

len

LLP

33

Growth in Spending Will Dictate Risk:Factors Influencing Spending Growth*

Technology

Pricing Level & Growth

Market Prominence

Health Insurance Coverage

Patient CharacteristicsDemographics

Source: MedPAC Report to Congress, March 2014

©20

13 C

lifton

Lars

onAl

len

LLP

34

Will Access to Coverage Kick-Start Spending Growth?

• Health care spending rose at fastest rate in 10 years in 4Q of 2013 at 5.6% **

• Hospital revenue grew by $8 billion, despite 1% decrease in IP days

• Reasons behind the increase:– Trend of shifting > out of pocket

to insured leveling off– Upward pressures on costs, such

as high-tech treatments, are remerging

– Since 2011 unemployment has dropped from 8.5% to 6.7%, adding 2.6 million jobs

Plan 2013 2014 Difference

ESI 108.7 116.9 8.2

Medicaid 12.3 18.2 5.9

Individual Market 9.4 7.8 (1.6)

Marketplace 0.0 3.9 3.9

Other 27.5 20.3 (7.2)

Subtotal (Insured) 157.9 167.2 9.3

Uninsured 40.7 31.4 (9.3)

Source: "Changes in Health Insurance Enrollment Since 2013" By Rand CorporationNumbers represent millions of people; margin of error omitted for presentation

NET CHANGES IN INSURANCE COVERAGE

FROM SEPT. 2013 TO MARCH 2014

“The Centers for Medicare and Medicaid Services expects health spending to rise 6.1% this year……as 11 million people gain health insurance.”**** Source: USA Today “Health care spending growth hits 10-year high”

©20

13 C

lifton

Lars

onAl

len

LLP

35

Emerging Risk in Commercial ContractingBackground• Insurer is implementing a new payment system and provided estimated impact of

conversion.• Estimated impact of the change was a reduction of net revenues of about

$831,000 (14%)• However, as claims are being processed the impact is greater than initially

estimated• Application of LCC rule further reduces net revenues by $954,000 (-16%)

Revised Estimated Impact• Baseline Conversion Impact ($831,000)• Additional Reduction Due to Application of Claim Level LCC ($954,000)

• TOTAL NET REVENUE IMPACT OF NEW CONTRACT($1,785,000)– Overall % Reduction in Payor Revenue -

30%

©20

13 C

lifton

Lars

onAl

len

LLP

36

Emerging Risk in Commercial Contracting (cont’d)

What it used to be under the old contract

Initial estimate based on analysis of new contract

Actual rate from paying at lower of allowable or

charges at a claim level (LCC)

Overall Payment Rate (2012 Pricing)

©20

13 C

lifton

Lars

onAl

len

LLPIntroduction of New Competion:

Walmart Eying the Health Care Industry

37

Moving Beyond Basic Retail Clinics

Source: The Advisory Board Holmes TJ, “The Diffusion of Wal-Mart and Economics of Density,” May, 2006; Zimmerman A and Hudson K, “Managing Wal-Mart: How U.S.-Store Chief Hopes to Fix Wal-Mart,” The Wall Street Journal, April 17, 2006, available at: www.wsj.com; Aboraya A, “Wal-Mart Plans to Offer Primary Care in 5-7 Years,” Orlando Business Journal, January 11, 2013, available at: www.bizjournals.com/orlando; Aboraya A, “Exclusive: Wal-Mart Exploring Private Health Insurance Exchange for Small Biz,” Orlando Business Journal, January 11, 2013, available at: www.bizjournals.com/orlando; Health Care Advisory Board interviews and analysis.

Vice PresidentHealth and Wellness Payer

Relations

”

“That’s where we’re going now: full primary care services in five to seven years.”

Potential Evolution of Health Care Products

33%Estimated portion of the US

population that visits Walmart every week

4,600+Number of Walmart stores in

the United States

Median distance between a residence

and Walmart

4.2 miles

Basic Retail Clinic

Full Primary Care

Health Insurance Exchange

Scope of Services

37

http://www.wsj.com/

http://www.bizjournals.com/orlando

http://www.bizjournals.com/orlando

©20

13 C

lifton

Lars

onAl

len

LLPIntroduction of New Competion:

Beyond Walmart

38

Walgreens Aims to Become the Premier Health Destination

Source: The Advisory Board Japsen B, “How Flu Shorts Became Big Sales Booster for Walgreen, CVS,” Forbes, February 8, 2013, available at: www.forbes.com; “Take Care Clinics at Select Walgreens Expand Service Offerings,” Reuters, May 31, 2012, available at: www.reuters.com; Murphy T, “Drugstore Clinics Expand Care into Chronic Illness,” The Salt Lake Tribune, April 4, 2013, available at: www.sltrib.com, Walgreens, “Company Overview,” available at: www.walgreens.com; Health Care Advisory Board interviews and analysis.

2009: Launches flu vaccine campaign

Simple Acute Services Vaccinations and Physicals

Chronic Disease Monitoring

Chronic Disease Diagnosis and Management

2013: Launches three ACOs; begins diagnosing and managing chronic disease

Case in Brief: Walgreen Co.

• Largest drug retail chain in the United States, with 372 Take Care Clinics

• In April 2013, became first retail clinic to offer diagnosis and treatment of chronic diseases

2007: Acquires Take Care Health Systems

2012: Offers three new chronic disease tests

Not Just a Drugstore

“Our vision is to become ‘My Walgreens’ for everyone in America by transforming the traditional drugstore into a health and daily living destination...”

Walgreen Co. Overview

”

38

http://www.forbes.com/

http://www.reuters.com/

http://www.sltrib.com/

http://www.walgreens.com/

©20

13 C

lifton

Lars

onAl

len

LLP

39

2014 Market Transitions to Monitor• Transitioning commercial contracting

– More “stiff arming” especially for smaller providers

• Exchange related impacts– Glitch continuation?– Reimbursement implications– “Surprise” narrow networks ?– Increased demand for medical services– Reprieves from mandates – how long will they last?– Consumer impact – choice & out-of-pocket costs

• Escalation in ruthless competition– Formation of narrow networks impacting market share

• On-going provider operational challenges– Revenue cycle issues– Profitability continues to be squeezed– Charge capture issues

©20

13 C

lifton

Lars

onAl

len

LLP

40

Parting Comments• Health care payment system is being driven to “value based”

payments

• The transition in large part is market driven

• Many of the initiatives take aim at improving management, access, and quality of care provided to patients with chronic conditions

• Short-term outcomes show promise, but it will be years before we understand the true benefit of this transition

• Outside of new innovation models, some of payment reform activity is not all that innovative

• Transition market is creating unique competition challenges

©20

13 C

lifton

Lars

onAl

len

LLP

41

Questions/Comments

THANK YOU!Rob Schile, CPA

MP Health [email protected]

For information on health care reform, go to

CliftonLarsonAllen’s Health Care Reform Center at:

http://www.cliftonlarsonallen.com/healthreform/

mailto:[email protected]

©20

13 C

lifton

Lars

onAl

len

LLP

©20

13 C

lifton

Lars

onAl

len

LLP


Appendix: Indiana Payment Innovation Initiatives

42

©20

13 C

lifton

Lars

onAl

len

LLP

4343

Advanced Payment ACO• American Health Network

of Ohio Care Organization, LLC (Indianapolis)

Pioneer ACO• Franciscan Alliance

(Indianapolis)

Indiana Innovation ActivityACO Participation


©20

13 C

lifton

Lars

onAl

len

LLP

44

• Bone & Joint Specialists, P.C. (Merrillville)

• Central Indiana Orthopedics (Muncie)• Clark Memorial Hospital (Jeffersonville)• Community Hospital of Anderson and

Madison County, Inc. (Anderson)• Community Hospital South, Inc.

(Indianapolis)• Community Hospitals of Indiana, Inc.

(Indianapolis)• Community Physicians of Indiana, Inc.

(Indianapolis)• Heart Group, PC (Evansville)• Indiana Heart Hospital, LLC

(Indianapolis)

• Indiana Hospitalists PC (Richmond)• Indianapolis Osteopathic Hospital,

Inc. (Indianapolis)• Orthopaedics Indianapolis, Inc.

(Indianapolis)• Premier Healthcare, Llc

(Bloomington)• Providence Medical Group Llc (Terre

Haute)• Saint Joseph Regional Medical Center

– Mishawaka Campus (Mishawaka)• Saint Joseph Regional Medical Center

– South Bend Campus (Mishawaka)• St. Joseph Regional Medical Center –

Plymouth Campus)

Indiana Innovation ActivityBPCI Model 2 Participation


©20

13 C

lifton

Lars

onAl

len

LLP

45

• Amedisys Home Health of Jeffersonville (Jeffersonville)

• Bone & Joint Specialists, P.C. (Merrillville)• Chicagoland Christian Village, Inc. (Crown

Point)• Community Physicians of Indiana, Inc.

(Indianapolis)• Covenant Care Indiana Inc. University Park

Health and Rehabilitation Center (Fort Wayne)

• Decatur Township Center (Indianapolis)• Heart Group PC (Evansville)• Home Health Care Solutions (Avon)• Hoosier Christian Village, Inc. (Indianapolis)• Indiana Hospitalists PC (Richmond)• Indianapolis Osteopathic Hospital Inc.

(Indianapolis)

• Lakeland Skilled Nursing & Rehab (Angola)

• McCormick’s Creek Rehabilitation & Skilled Nursing Facility (Spencer)

• Miller’s Merry Manor (31 locations)• New Haven Care Center (New Haven)• Norwood Health & Rehabilitation Center

(Huntington)• Oak Health Care Investors, Inc. (Butler)• Orthopaedics Indianapolis, Inc.

(Indianapolis)• Premier Healthcare Llc (Bloomington)• Providence Medical Group (Terre Haute)• Pyramid Point Post-Acute & Rehab

Center (Indianapolis)• Waldron Health & Rehab Center

(Waldron)

Indiana Innovation ActivityBPCI Model 3 Participation


©20

13 C

lifton

Lars

onAl

len

LLP

46

Indiana Innovation ActivityFQHC Demonstration

Indiana Participants– Cass County Community Health Center

(Logansport, IN)

– Community Health Center of Jackson County (Seymour, IN)

– HealthLinc, Inc. (Valparaiso, IN)

– Indiana Health Centers, Inc. ◊ South Bend, IN◊ Kokomo, IN

– Vermillion-Parke Community Health Center (Clinton, IN)

3 year demonstration• Help Medicare beneficiaries manage chronic conditions and provide coordinated care• Receive $6 monthly care management fee for each eligible Medicare beneficiary• Achieve Level 3 patient-centered medical home recognition


©20

13 C

lifton

Lars

onAl

len

LLP

47

CMS Centers for Medicare & Medicaid Innovation (CMMI):

Indiana Innovation Activity• Health Care Innovation Awards:

– Trustees of Indiana University: ◊ Project Title: “Dissemination of The Aging Brain Care Program” (ABC)◊ Geographic Reach: Indiana◊ Funding Amount: $7.8 Million◊ Est. 3 Year Savings: $15.7 Million◊ Project Summary:

• Reduce behavioral and psychological symptoms of dementia, improve patients’ or informal caregivers’ satisfaction and access to care, improve the quality of dementia and depression care, and reduce acute care utilization.

• Expansion of The Aging Brain Care (ABC) program which has been in effect for 2 years serving > 200 patients.

• ABC will expand to more than 2,000 Medicare & Medicaid beneficiaries with dementia and late-life depression to accomplish the stated project goals.


©20

13 C

lifton

Lars

onAl

len

LLP

48



– TransforMed◊ Geographic Reach: AL, CT, FL, GA, IN, KS, KT, MD, MA, MI, MS, NA, NC,

OK, SD, WV◊ Funding Amount: $20.7M◊ Est. 3 Year Savings: $52.8M◊ Project Summary:

• Primary care redesign project across 15 communities to support care coordination among Patient-Centered Medical Homes (PCMH), specialty practices, and hospitals, creating “medical neighborhoods”.

• Project will utilize sophisticated data analytics to identify high risk patients and coordinate care across the medical neighborhood while driving PCMH transformation in primary care practices in each community.


©20

13 C

lifton

Lars

onAl

len

LLP

49



– Nat’l Council of YMCA of USA◊ Geographic Reach: AZ, DL, FL, IN, MN, NY, OH, TX◊ Funding Amount: $11.9M◊ Est. 3 Year Savings: $4.3M◊ Project Summary:

• In partnership with other non-profit organizations, will expand YMCA’s Diabetes Prevention Program to prediabetic Medicare beneficiaries in 17 communities.

• Deliver community-based diabetes prevention through a nationally recognized diabetes prevention lifestyle change program, coordinated and taught by trained YMCA Lifestyle Coaches.

• Goal is to prevent the progression of prediabetes to diabetes, which will improve health and decrease costs associated with complications of diabetes, hypercholesterolemia and hypertension.


©20

13 C

lifton

Lars

onAl

len

LLP

50



– Feinstein Institute for Medical Research◊ Geographic Reach: FL, IN, MI, MO, NH, NM, NY, OR◊ Funding Amount: $9.4M◊ Est. 3 Year Savings: $10.1M◊ Project Summary:

• Develop a workforce capable of delivering effective treatments, using newly available technologies to at-risk, high-cost patients with schizophrenia

• Provide training and education to patients and caregivers about pharmacologic management, cognitive behavior therapy, and web-based/home-based monitoring tools for their conditions intended to improve patients quality of life and lower cost by reducing hospitalizations.


©20

13 C

lifton

Lars

onAl

len

LLP

51

Community Based Care Transitions Program

• Section 3026 of ACA

• Test models for improving care transition from hospital to other settings and reducing readmissions for high risk Medicare beneficiaries

• 102 total participants

Indiana Participants:

• Aging & In-Home Services of Northeast Indiana (Fort Wayne, IN)

• LifeSpan Resources, Inc. (New Albany, IN)

Indiana Innovation ActivityCCMI Initiatives to Speed Adoption of New Models


©2013 cliftonlarsonallen llp cliftonlarsonallen.com innovation and risk: transitioning through...

Documents