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LEGAL CAVEAT

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Cardiovascular Market Update 2017

Cardiovascular Roundtable

Prepared for: Cox Health11/17/2017

Stuart ClarkManaging [email protected]


ROAD MAP6

The Next Wave of Health Reform 1

2 5 Market Realities Impacting CV Programs

3 Defining a No-Regrets Strategy


7

What a Year It�s Been

2017 a Roller Coaster Year in Health Care Policy

Source: Cardiovascular Roundtable research and analysis.

1) American Health Care Act of 2017; Better Care Reconciliation Act; Obamacare Repeal and Reconciliation Act.

2) Episode Payment Models.

3) Department of Health and Human Services.

January 20

President Trump sworn in, makes health care top priority on Day 1

� July 25-28: Senate votes down AHCA, BCRA, ORRA1

� September 26: Senate cancels vote on Cassidy-Graham

Key Milestones in 2017 Health Care Agenda

New President of the United States

Attempts to Repeal, Replace the ACA Begin

Cardiac Bundles Cancelled

August 15

CMS issues proposal to cancel mandatory CABG, AMI EPMs2

New HHS3

Secretary

October 4

Eric Hargan announced as acting HHS Secretary following resignation of Tom Price


8

Health Care Squarely in the Hands of the GOP

Congress, Executive Branch, and Most States Now in Republican Control


33/50Republican Governors

32/50Republican-Led Legislatures

52/100Senate Republicans

241/435House Republicans

Four Key Principles Guiding GOP Reform Efforts

Promote Transparency of Cost and Quality

Reduce Federal Entitlement Spending

Embrace Free Markets and Consumer Choice

Use free-markets to promote private sector competition in payer, provider markets

Focus more aggressively on reducing federal health care spending

Mandate greater consumer choice at the point-of-care, coverage through improved transparency

Reduce federal role in health care; provide states more autonomy to make decisions, cut spending

Devolve Health Policy Control to States


9

What�s Next for Health Care Reform?

Future of Repeal Legislation Unclear

Source: Nather, D. and Baker, S. �Axios Vitals,� Axios, Aug. 1, 2017; Davis, S. and Montanaro, D. �McCain Votes No, Dealing Potential Death Blow to Republican Health Care Efforts,� NPR, July 27, 2017; Health Care Advisory Board interviews and analysis.

Legislative Agenda Shifting�For Now

�We haven't given up on changing the American health care system. We're [just] not going to be able to do that this week.�

Senate Majority Leader Mitch McConnell (R-KY),

Senate Briefing, September 26th

1 2 3

Renew Effort for FY2019

Refocus on Bipartisan Health Reform

Incorporate Health Care into Tax Reform

Three Potential Legislative Paths Forward

"With a process that gives more attention and time, we will repeal and replace Obamacare... It's not a matter of if, only a matter of when."

Senator Lindsey Graham (R-SC),

Senate Briefing, September 26th


10

Election Raising Questions About the Future of Risk

Despite Uncertainty, Payment Reform Likely to Remain in Some Form

Source: Verma S, �Medicare and Medicaid Need Innovation,� The Wall Street Journal,

September 19, 2017, www.wsj.com; Cardiovascular Roundtable interviews and analysis.

1) Centers for Medicare and Medicaid Innovation.

2) Medicare Access and CHIP Re-Authorization Act.

Key Questions from CV Leaders

How will the new administration impact MACRA2 implementation?

Will the new administration migrate away from payment transformation?

How will CMS prioritize value-based initiatives moving forward?

What is the future of CMMI1 and care transformation programs (e.g., ACOs)?

Many Reasons to Bet on the Future of Payment and Care Delivery Reform

Strong bipartisan support for the concept of payment reform

Near-unanimous bipartisan support for MACRA legislation

CMS Administrator Seema Vermahas confirmed continued support for value-based care

Current administration committed to testing new models to deliver and pay for health care through CMMI


11

5 Market Realities Impacting CV Programs


#1

#2

#3

#4

#5

Margin pressure will only intensify for CV

CV is not just increasingly an outpatient business, but an ambulatory business

MACRA is changing physician payment as well as how hospital�s should align with physicians

As referring providers become more accountable for population health, CV will be expected to play a bigger role

The shift to risk is not abating�more CV payment will be tied to cross-continuum cost and quality in the future


ROAD MAP12





13

Guess What�s Not Getting Repealed

Even If ACA Repealed, Majority of Obama-Era Cuts Would Have Remained

#1: Margin pressure will only intensify for CV

Source: CBO, �Budgetary and Economic Effects of Repealing the Affordable Care Act,� June 2015; CBO, �Letter to the Honorable John Boehner Providing an Estimate for H.R. 6079, The Repeal of Obamacare Act,� July 24, 2012; CBO, �Cost Estimate and Supplemental Analyses for H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015; Budget of the United States Government (Proposed) FY 2016; Cardiovascular Roundtable research and analysis.

1) Calculation includes ACA Inpatient Prospective Payment System Update Adjustments; ACA Disproportionate Share Hospital payment cuts; MACRA Inpatient Prospective Payment System update adjustments.

�Productivity� Adjustments and Other Cuts to Reimbursement1

2017 2018 2019 2020 2021 2022 2023 2024 2025

($32B)

($48B)($60B)

($71B)($82B)

($94B)($103B)

($116B)

($143B)

60%

Significantly Impacting Margins

Percent of hospitals projected to have negative margins by 2025


14

C-Suite Feeling the Cost Burden

Beginning to Trick Down to CV Leaders?

Source: Boston Globe, �Partners Health Care cutting $600 million in costs,� May 12, 2017; Modern Healthcare, �Advocate Health Care plans $200 million in cuts,� May 4, 2017; Chicago Tribune, �Edward-Elmhurst Health cutting $50 million,� October 5, 2017; Modern Healthcare, �Detroit Medical Center to reduce workforce to cut $17 million in expenses,� November 30, 2016; Cardiovascular Roundtable research and analysis.

Partners HealthCare cutting $600m in costs

May 12, 2017

Jim Skogsbergh, CEO

ADVOCATE HEALTH CARE

Our existing cost structure is not

sustainable�We believe the

transformation required to solve this

problem will take months, if not years.

Failing to take steps now will turn a

financial challenge into a financial

crisis�something none of us wants."

Detroit Medical Center to reduce workforce to cut $17 million in expenses

November 30, 2016

Edward-Elmhurst Health cutting $50 million

10/05/2017

Advocate Health Care plans $200 million in cuts

May 4, 2017


15

CV Reimbursement Not What It Used to Be

Payment Updates Requiring Greater Efficiency

Source: CMS; Cardiovascular Roundtable research and analysis.

1) Inpatient payments are final FY 2018 rates; outpatient and physician fee schedule are proposed CY 2018.

2) Unadjusted national average; change values are provided for comparison purposes, but direct comparisons are difficult due to consolidation and restructuring of APCs.

0.54%1.59%

CardiacServices

VascularServices

CV Medicare Payment Changes

2018 Versus 20171

INPATIENT OUTPATIENTPHYSICIAN FEE SCHEDULE

Access a complete list of 2018 paymentupdates on the online resource page

-2.0% -2.0% -2.0%

Cardiology

Cardiac

Surgery

Vascular

Surgery

Select CV Services

APC DescriptionPercent Change2

5188 Level 1 Endovascular Procedures (e.g., diagnostic cardiac cath)

0.4%

5212 Level 2 EP Procedures (e.g., ablation of AV node)

2.8%


16

CV Costs Increasingly Under the Microscope

Key Market Trends Shaping the Economics of CV Care


1) Bundled Payments for Care Improvement Initiative.

2) Hospital Value-Based Purchasing; Hospital Inpatient Quality Reporting; Merit-Based Incentive Payment System.

Reimbursement Pressures

� Payment updates not keeping pace with increasing costs

� MACRA holding physician payments steady

� Readmission reduction program

� BPCI1, voluntary risk-based payment models

� New VBP, IQR, MIPS2 episodic cost measures

Pay-for-Performance Programs Scrutinizing Episodic Cost

Shifting Demand to Less Profitable Services

� Softening acute, procedural volumes (e.g., CABG, PCI)

� Shift to outpatient, medical care with lower margins

Cost-Sensitive Patients and Referring Providers

� Patients facing greater out-of-pocket costs

� Increasing price transparency

� Referring providers increasingly accountable for costs under MACRA, ACOs


17

No Relief in Sight

CV Demographics Increasing Cost of Care Moving Forward

Source: American Heart Association, �Cardiovascular Disease: A Costly Burden for America�Projections Through 2035� (2017); Cardiovascular Roundtable research and analysis.

Cost of CV Disease in United States

Drivers Impacting the Rising Cost of CV Care Delivery

Increase in staffing costs

Investment in more complex, expensive technologies

Increasingly chronic, comorbid patient population

2016

$555 billion

2035

$1.1 trillion


18

Carving Out a Role in Institution Efforts

Clear Opportunity for CV to Support Targeted Cost Reduction Initiatives


Savings

Potential

Difficulty

HighLow

Low

High

� Reallocate acute care services across system

� Rightsize excess inpatient capacity

Minimize Unwarranted Care Variation

Restructure Fixed Cost & Assets

Reduce Labor and Supply Costs

� Develop a foundation for implementing care standards

� Eliminate quality shortfalls that increase cost per case

� Update labor staffing models

� Ensure value of supply contracting arrangements

Focus of C-Suite, health system executives

More within CV�s realm of control


19

ROUNDTABLE RESOURCESStrategies for Success

CV Guideline Compendium

Building the High-Value CV Care Team

Playbook for Reducing CV Care Variation

Practicing Top-of-License CV Care

Build long-term strategies to reduce

programs costs, not just focusing on

quick wins

Build a lean provider team across settings

and services that engages each team

member in high-value care tasks

Develop care standards for areas where

care variation is contributing to high clinical

and operational costs and poor outcomes

Prioritize CV Cost Reduction

1

Ensure Top-of-License Care Delivery

2

Reduce Variation in Care Delivery

3

Source: Cardiovascular Roundtable interviews and analysis.

Playbook for CV Episodic Cost Management

CV Margin Management Resource Center (coming soon)


20

The Future of Ambulatory Care?

Drones Delivering AEDs in Rural Sweden Save Critical Time

#2: CV is not just increasingly an outpatient business, but an ambulatory business

Source: Columbus C, �Could Drones Help Save People in Cardiac Arrest?� NPR Health Shots, June 13, 2017, http://www.npr.org/; Cardiovascular Roundtable research and analysis.

�Could Drones Help Save

People in Cardiac Arrest?�

Drones delivering automated external defibrillators (AEDs) to cardiac arrest victims in rural Sweden

Andre

as C

laesson/F

lyP

uls

e/N

PR

Reduced Dispatch Time

3 minutes 3 secondsvs.


21

Outmigration of CV Services Marches On

Inpatient Volumes Declining as Outpatient Takes a Greater Share


CV Five-Year Growth Projections by Sub-Service Line

National, All-Payer, 2016-2021

20% 20% 19%

10%

(3%) (4%)(6%)

(8%)

(12%) (13%)

(19%)

OutpatientMedicalVascular

OutpatientCardiac EP

OutpatientVascular

Cath

OutpatientMedical

Cardiology

Inpatient

Arterial

Disease

Inpatient

Cardiac

Surgery

Inpatient

Cardiac

Cath

Outpatient

Cardiac

Cath

Inpatient

Medical

Cardiology

Inpatient

Other

Vascular

Inpatient

Cardiac EP

Get Custom Forecasts for Your Market

Access the CV Market Estimator for five year forecasts for CV services in your market


22

Many Factors Driving CV �Out�

Outpatient Shift Unlikely to Abate Given Changing Dynamics


1) Recovery audit contractor.

Greater Risk forTotal Cost

Shifting services contributes to lower total cost, helps reduce readmissions by enhancing cross-continuum care

Market Forces Favoring Outpatient Shift of CV Services

RegulatoryScrutiny

RAC1 audits, Two-Midnight Rule penalize for unnecessary inpatient admissions

Need for HospitalEfficiency

Triaging low-risk patients to lower acuity settings alleviates capacity constraints

Payer Steerage

Lower-cost settings help retain patients steered by insurers to alternate providers

Consumer Demands

Offering accessible care settings, shorter wait times attracts patient and physician consumers


23

Site-Neutral Payments Shaking Up Outpatient Strategy

Already Seeing Significant Cuts to Payment Rate for Off-Campus Sites

Source: Centers for Medicare and Medicaid Services, CMS.gov; Cardiovascular Roundtable interviews and analysis.

1) Medicare Physician Fee Schedule.

2) Hospital Outpatient Prospective Payment System.

Access our cheat sheet on site neutral payments on the online resource page

Hospital Sites Meeting Three Criteria�

�Receive Half of Previous

Payment Starting in 2017

Reimbursed for all services on site-specific MPFS1 rate set at 50% of HOPPS2 payment

Hospital-owned, designated as �off-campus, provider-based sites�

Located more than 250 yards from hospital�s campus

Acquired, opened, or built after November 1, 2015


24

Not the Last We�ll See of Payment Levelling

Keeping Services in HOPD1, Acquiring Practices No Longer a Sure Bet


1) Hospital outpatient department.

2) Facilities relocated for extraordinary events, e.g. natural disasters, public safety events, etc. may continue billing on HOPPS.

1

Site acquisition

Facility relocation2

Office expansion

Practice acquisition no longer guarantees higher reimbursement

Future Implication

Sites Can Lose Ability to Bill on HOPPS in Three Ways

2

CMS using claims data to calculate payment rate starting in 2019

MPFS 2018 proposed rule sets rate at 25% of HOPPS payment

CMS may expand payment levelling to additional sites, including those grandfathered in

Future Implication

Further Payment ReductionsAre on the Horizon


25

Tomorrow�s Ambulatory Strategy Looks Beyond HOPD

Long-Term Priorities Require Service Placement Outside of Hospital

Source: �Imaging Program Expands to Include Level of Care Reviews: FAQ,� Anthem Blue Cross Blue Shield, May 2017; Cardiovascular Roundtable research and analysis.

Lower copays for patients

Payment rate differential less significant than in the past

Community practice more accessible to patients, providers

More attractive to payers who are steering patients to lower-cost providers

Benefits of Shifting Select Services to Physician Practice Setting

Case in Point: Anthem to Deny SomeOn-Campus Imaging Services

� Select Anthem insurance plans conducting level-of-care reviews for imaging exams

� Will deny authorizations for HOPD CT, MRI exams not requiring in-hospital testing

� Ordering provider will be given list of alternative freestanding imaging facilities

Is Echo Next?For more information on Anthem�s payment denials, read our blog


26

CV Ambulatory Strategy�Not in Name Only

CV Leaders Must Expand Focus Beyond Their Four Walls

Source: 2014 Cardiovascular Roundtable CV Organizational and Leadership Structure Survey; Cardiovascular Roundtable research and analysis.

1) Of respondents to 2014 Cardiovascular Roundtable member benchmarking survey.

CV Involvement in Ambulatory Care Creates Efficiencies for Program, System

Principled resource, service allocation

Streamlined business, leadership functions

Unified cross-continuum clinical strategy, greater coordination

Mutual accountability to shared goals between CV program and system

Yet CV Leaders Often Without Ambulatory Oversight1

39% CV programs with direct purview over CV physician offices

65% CV programs with direct purview over outpatient CV clinics


27


Evaluate the financial implications of

site-neutral payments and adjust future

service placement strategy

Increase oversight of outpatient care sites

and align goals to improve coordination

across the continuum of CV care

Improve patient access to cost-effective

CV care in the community and connect

them to the hospital for necessary services

Understand the Impact of Site-Neutral Payments

1

Align CV Inpatient and Ambulatory Strategy

2

Enhance OutpatientPresence

3


Site-Neutral PaymentsCheat Sheet

Develop an Effective Reporting Structure

Support Operational Integration Across CV Practices

Guide for Assembling the Accessible CV Network

Blueprint for CV Growth in a Transitioning Market


28

Payment Reform Accelerates with MACRA

With MACRA1 Underway, 2017 a Pivotal Year for Value-Based Care

#3: MACRA is changing physician payment as well as how hospital�s should align with physicians


1) Medicare Access and CHIP Reauthorization Act of 2015.

2) Medicare Incentive Payment System.

3) Advanced Alternative Payment Model.

4) Episode payment models.

A Brief History of MACRA

92�8 2015 Senate vote in favor of MACRA

2015Congress passes MACRA1

to overhaul flawed sustainable growth rate (SGR)

2017First performance year tying physician payment to risk; will impact 2019 payment

Access our cheat sheet on MACRAon the online resource page

What CV Leaders Need to Know

Key strategies to maximize performance under MIPS

Implications of each physician payment track�MIPS2 versus APM3

The future of APMs for CV following cancellation of cardiac EPMs4

How MACRA will impact physician, hospital alignment


29

Payment Reform Accelerates with MACRA (Cont.)

Source: CMS, Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, October 14, 2016; Cardiovascular Roundtable research and analysis.

MACRA in Brief

� Legislation passed in April 2015 ending the Sustainable Growth Rate (SGR) formula, which threatened significant physician payment cuts for 13 years

� Final rule released in October 2016 with program starting January 1, 2017

� Implements the Quality Payment Program (QPP), consisting of two new Medicare payment tracks that eligible clinicians will fall into: Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs)

� Holds physician payment updates relatively flat for 2016 onward, with payment bonuses/penalties applied based on track and performance

� Providers are required to participate in MACRA if they:

� Bill Medicare more than $90,000 per year or provide care for more than 200 Medicare patients a year (per 2018 proposed rule), AND

� Are a physician, PA, NP, clinical nurse specialist, or certified RN anesthetist

� Represents a significant move to increase pay-for-performance and risk models for physicians


30

Breaking Down the Two Tracks

Both Tracks Putting Payment at Risk

Source: CMS, �Medicare Program: CY 2018 Updates to the Quality Payment Program,� June 20, 2017; Cardiovascular Roundtable research and analysis.

1) Providers can only earn as much in bonuses as the MIPS track collects in penalties.

2) In addition to any bonuses or penalties from the payment models themselves.

Merit-Based Payment System (MIPS) Advanced Alternative Payment Models (APMs)

The majority of providers will fall into this track

83-90%

10-17%

Of clinicians are expected to qualify for MIPS track

Of clinicians are expected to qualify for APM track

There will be winners and losers

As MIPS is a revenue-neutral program, some providers will receive a bonus and some will pay a penalty

2020: 5% 2021: 7% 2022: 9%

Providers can make or lose up to1:

2019: 4%

It is difficult to qualify�especially for CV after cardiac EPM cancellation

There is big appeal to participate

Providers in this track will receive a 5% annual lump-sum bonus2 in 2019-2024 and a higher annual payment update in 2026+

Deciding to participate is frequently out of CV�s control

With no CV-specific APMs remaining, providers must participate in another eligible payment model (e.g., downside ACO)


31

Work Smarter, Not Just Harder, on Quality

Strategies to Maximize Performance in the Quality Category Under MIPS

Source: CMS, �Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models,� Oct. 14, 2016, qpp.cms.gov. Advisory Board interviews and analysis

1) Physician Quality Reporting System.

� Track list of metrics over the year

� Aim to improve performance across all metrics

Improve Program

Performance

Measure Against

Benchmarks

Identify Highest

Performers

Create Target List of CV

Metrics

� Identify eligible measures previously reported in PQRS1

� Review list of MIPS metrics to identify additional measures to report

� Evaluate results to determine highest performing measures

� Select at least six measures to report

� Compare performance to publically available benchmarks on select quality metrics (e.g., registries, Hospital Compare)

Starting2018

Groups will report up to six measures to satisfy full requirements for the quality category

Tips for Success


32

Doubling Down on Cost

Tying Physician Payment to Episodic Cost Metrics

Category Weighting Under MIPS

60% 60%

30%

25% 25%

25%

15% 15%

15%

30%

2017 2018 2019+

Source: CMS, �Medicare Program: CY 2018 Updates to the Quality Payment Program,� June 20, 2017; Cardiovascular Roundtable research and analysis.

Quality Advancing Care Information

Improvement Activities Cost

By Performance Measurement Year Cost Metrics

1

2

3

Total cost per capita

Medicare spending per beneficiary

May include condition-specific episode-based measures as early as performance year 2019

CMS has been evaluating:

� Acute inpatient conditions (e.g., AMI, chest pain)

� Chronic conditions (e.g., AF, HF)

� Procedural episode groups (e.g., CABG, ICD implant)

Ensure Patients are Attributed to a PCP

� Attribution for total cost per capita is based on patient�s utilization of primary care

� Specialists can reduce the likelihood of attribution by encouraging patients to visit their PCP


33

APMs Not Primed for CV

Majority of Existing Qualifying Models Out of CV Leaders� Control

Source: CMS, �2018 Updates to the Quality Payment Program,� (2017); HHS, �Secretary�s Response to the ACS-Brandeis Advanced APM,� September 7, 2017, available at www.innovation.gov; Cardiovascular Roundtable research and analysis.

But New APMs on the Horizon May Be Positive Signs for CV

Voluntary CMS CV BundlesTo be developed for 2018

Forthcoming voluntary risk-based payment model for select CV conditions, services

Medicare AdvantageTo become eligible for APM

track starting in 2021

Private Payer Models

Example: ACS-Brandeis APMIncludes CABG, valve surgery, and HF, recently approved for limited testing

Responsible entity can be a group of physicians rather than a hospital

Even providers selected for cardiac EPMs may have had difficulty meeting the thresholds to qualify for APM track

� Receive 25% of Medicare payments through APM or,

� See 20% of Medicare patients through APM

Majority of APMs centered around primary care (e.g., ACOs)

Even if participating in an APM, programs still have to meet high payment, volume thresholds

Limitations of APM Models for CV


34

An Environment Ripe for Partnership

MACRA Will Drive�and Require�Hospital-Physician Alignment

Source: Medical Group Management Association 2017 Cost and Revenue Survey; Cardiovascular Roundtable research and analysis.

$15,128IT operating expenses per FTE physician at a physician-owned CV practice

Improve performance under MIPS

Offload reporting burden

Stabilize practice economics

Case in Point: IT Expense

Think Strategically About Alignment

Hospitals employing physicians will be accountable for physician performance under MIPS

Programs may restructure physician incentive models to incorporate metrics impacting performance under MACRA

Physicians Will Increasingly Look to Employment To�

Health Systems Should�

Consider opportunities to scale physician network to support new or existing risk contracts


35


Design Effective CV Physician Compensation Models

Educate physicians and CV leaders on

the implications of MACRA and how to

be successful

Be selective in employing physicians as

hospitals will be financially accountable

for employed physician performance

under MIPS

Structure physician compensation

models to include metrics that align

with those you are at-risk for under

MACRA

Learn MoreAbout MACRA

1

Carefully Evaluate YourPhysician Alignment Strategy

2

Redesign Incentives to Align with New Metrics of Success

3


MACRA Cheat Sheet

MACRA: What the 2018 Proposed Rule Means for Providers

MIPS measures picklist at qpp.cms.gov

Advancing CV Hospital-Specialist Alignment


36

A New Prescription for� Food?

Geisinger�s Fresh Food Pharmacy Aims to Improve Health, Reduce Costs

#4: As referring providers become more accountable for population health, CV will be expected to play a bigger role

Source: Aubrey A, �Fresh Food By Prescription: This Health Care Firm is Trimming Costs� And Waistlines,� NPR: The Salt, May 8, 2017; Geisinger Health System, �An RX for Good Health: Geisinger Launches Fresh Food Pharmacy,� PR Newswire, November 10, 2016; Cardiovascular Roundtable research and analysis.

Geisinger�s Fresh Food Pharmacy Program

� Program measuring the impact of healthy food, education for diabetes patients

� Provides free, fresh food weekly in addition to nutrition counselling, meal preparation lessons

Early Program Successes

Per-patient reduction in hemoglobin A1C points

Estimated per-patient savings from program3 $24K

Big

Fis

hD

esig

n/N

PR


37

Primary Care at Center of Population Health Efforts

Seeing Continued Interest in ACOs, but CV Often Left On the Sidelines

Source: CMS, available at: data.cms.gov; Advisory Board, �Where the ACOs are�, available at: advisory.com; Cardiovascular Roundtable interviews and analysis.

.

220

353 404

474 525

2013 2014 2015 2016 2017

Yet CV Leaders Rarely Involved in ACO Decisions

ACO Participation Continues to Grow

Total ACO Participants, by Performance Year

VP Heart & Vascular Services

Large Hospital in the Midwest

Our physicians are assigned to an ACO on the contract, but as far as our involvement? I�d say minimal at best.�

Director of CV Services

AMC in the Northeast

We�ve received a global view and know the goals of the ACO, but we haven�t quite

formulated our strategies to function as one in CV.�


38

Risks of Non-Action Too Great to Ignore

Accountable PCPs1 Changing Referral Patterns to CV Specialists


1) Primary care providers.

2) Pseudonym.

3) Aortic stenosis.

Potential Consequences for CV Due to Care Redesign Initiatives

ACO PCPs hesitant to refer patients for high-cost specialty services

Patients referred later in disease progression, with more acute needs

CV program locked out of referral network if not demonstrating high-value care

An Extreme Example: Curie Hospital2

� Large CV program with robust structural heart program

� Hospital-employed PCPs joined ACO, started referring fewer valve patients due to fear patients would receive expensive treatments (e.g., TAVR)

� Structural heart program sees volume decline, threatens stability

� Patients with AS3 referred too late in disease progression

PCPs Acting as Gatekeeper for High-End CV Care


39

Positioning CV to Succeed Under Care Redesign

Programs Must Demonstrate Value to Secure Continued Referrals


Secure Referrer Trust

Strengthen referring physician alignment by demonstrating positive outcomes and appropriate utilization

Improve Patient Access

Ensure timely, convenient referrals and appointments in accessible care settings

Provide Quality Care at Low Cost

Deliver high-quality, low-cost care to demonstrate high-value CV care delivery

Imperatives for Success Under Care Redesign Initiatives

Market to Providers Based on Value

Emphasize quality of care, appropriate utilization, and cost reduction efforts to attract referring PCPs


40

A New Role for CV in Population Health

Million Hearts Initiative Puts Primary Prevention in the Spotlight

Source: CMS, �Million Hearts,� https://innovation.cms.gov/; HHS, �Million Hearts,� https://millionhearts.hhs.gov/; �Million Hearts: Meaningful Progress 2012-2016�; Ritchey M, et al., �Million Hearts: Description of the National Surveillance and Modeling Methodology Used to Monitor the Number of Cardiovascular Events Prevented During 2012-2016,� J. Am Heart Assoc, 6, no. 5 (2017): e006021; Cardiovascular Roundtable research and analysis.

1) Defined as heart attacks, strokes, and other CVD-related ED encounter or hospitalization with a primary ICD9 or death code.

2) Million Hearts program estimate, based on available data for prior years.

3) Cardiovascular disease.

4) Transient ischemic attack.

5) Fee-for-service.

500KCV events1 prevented between 2012 and 20162

� CMS initiative launched in 2011

� Goal to prevent one million heart attacks and strokes

� Provides guidance on CV primary prevention efforts

Million Hearts Initiative

3.3MMedicare FFS5

beneficiaries

20KHealth care practitioners

Expected Program Reach by 2021

� Million Hearts CVD3 Risk Reduction Model launched in 2016

� 516 organizations selected to participate

� Participants receive a stipend for managing patients at high-risk of CVD who have not yet had a heart attack, stroke, or TIA4

New Model Tying Payment to Prevention

Successfully Preventing CV Events


41

A New Role for CV in Population Health (Cont.)

Source: �Million Hearts,� CMS, https://innovation.cms.gov/l; �Million Hearts,� HHS, https://millionhearts.hhs.gov/; �Million Hearts: Meaningful Progress 2012-2016,� HHS; Cardiovascular Roundtable research and analysis.

1) Centers for Disease Control and Prevention.

2) Centers for Medicare and Medicaid Innovation.

Million Hearts®

� CMS, CDC1 initiative launched in 2011; goal to prevent 1 million heart attacks and strokes through clinical- and community-based strategies through ABCS approach:

� Aspirin for high-risk patients, Blood pressure control, Cholesterol level management, Smoking cessation

� Preliminary results through 2016 show risk reductions

� Million Hearts Risk Reduction Model CMMI2 pilot established in 2016, including over 500 participating practices, clinicians, and health systems

� First model tying payment to CV risk reduction, incentivizing primary prevention of CVD

� Million Hearts 2022 reinforces emphasis on CV risk reduction goals, through 3 aims

� Focus on at-risk populations

� Optimize care

� Keep people healthy

� Million Hearts 2022 also sets goal to increase cardiac rehab participation from 20% to 70%

� Expected effects in first year of 70% utilization: 12,000 lives saved, 87,000 hospitalizations prevented


42

Expanding the Focus to Secondary Prevention

Cardiac Rehab Front and Center in Million Hearts 2022

Source: �Million Hearts,� CMS, https://innovation.cms.gov; �Million Hearts,� HHS, https://millionhearts.hhs.gov/; �Million Hearts: Meaningful Progress 2012-2016,� HHS; �Million Hearts 2022,� HHS; Ades PA, et al., �Increasing Cardiac Rehabilitation Participation From 20% to 70%: A Road Map From the Million Hearts Cardiac Rehabilitation Collaborative,� Mayo Clin Proc, 92, no. 2 (2017): 234-242; Cardiovascular Roundtable research and analysis.

Million Hearts 2022 Sets Ambitious Cardiac Rehab Goal

20%

70%

Current cardiac rehab utilization

Million Hearts goal for cardiac rehab utilization

Increase appropriate enrollment

Increase patient attendance

Optimize program efficiency

Strategies to Increase Cardiac Rehab Utilization

Read more from Million Hearts to learn targeted, effective strategies to increase cardiac rehab utilization


43

Cardiac Rehab Getting More Attention

Expansion to Secondary Prevention Not Just a Focus in Million Hearts

Source: Keteyian, S, �Doing Away with Outdated Dogma in Cardiac Rehabilitation,� AACVPR 2017 Workshop; �Medicare Program: Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model,� CMS; Cardiovascular Roundtable research and analysis.

1) Heart failure with preserved ejection fraction.

INCREASED SUPPORT

EXPANDED COVERAGE

Cardiac rehab covered by CMS for expanded

conditions (e.g., HFrEF1)

New CMS determination covers exercise therapy for patients

with peripheral artery disease

Some commercial payers now reimburse

home-based rehab

Cardiac rehab and exercise training is a Class 1A

recommendation

CMS considering new voluntary payment model after

cancellation of Cardiac Rehab Incentive Payment Model


44

Redefining CV�s �Best in Class�

New Comprehensive Accreditations Mandate Population Health Focus

Source: �Facts about Comprehensive Cardiac Center Certification,� The Joint Commission, available at www.jointcommission.org; �Cardiovascular Center of Excellence: Program Overview and Eligibility v1.3,� American Heart Association, available at www.heart.org; Cardiovascular Roundtable intervies and analysis.

Population Health a Requirement of Both Accreditations

Use of a national registry or data tool to monitor data, measure outcomes

CV risk factor identification and disease prevention

Access to cardiac rehab services, secondary prevention education

Focus on streamlined, timely patient transitions between referrers and CV specialists

Two New Accreditations Available for Comprehensive CV Programs

Cardiovascular Center of Excellence

Comprehensive Cardiac Center Certification


45


Enhancing CV Specialist Partnerships with Primary Care

Give PCPs guidance and tools to help

them identify and refer CV patients

earlier in disease progression

Develop profitable, effective cardiac,

PAD, and pulmonary rehab and make

sure patients are referred and attend

Tailor cross-continuum care management

services to patients based on risk

Help PCPs IdentifyCV Patients

1

Increase Utilization of CV Rehab Programs

2

Improve Care Management for High-Risk Patients

3


CV Referral Guideline Compendium

Tactics for Sustainable Pulmonary Rehab Program Development

Blueprint for CV Care Management

Cardiac Rehab: Strategies for Success webconference (December 2018)


46

The Rise�and Fall�of Mandatory Cardiac Bundles

CMS Cancels Mandatory Cardiac EPMs Before They Begin

#5: The shift to risk is not abating�more CV payment will be tied to cross-continuum cost and quality in the future


1) Center for Medicare and Medicaid Innovation.

� New administration opposes mandatory payment pilots

� CMMI cancels EPMs

� CMS plans to develop new voluntary bundled payment model(s) for2018, building on the BPCI initiative and designed to meet APM criteria

July 2016

Cardiac Episode Payment Model (EPM) Timeline

December 2016 August 2017March 2017 May 2017

� CMMI1 announces first mandatory cardiac episode payment models

� Retrospective, 90-day bundles for AMI and CABG

� Hospitals responsible party for entire care episode

Proposed Rulereleased

Final Rule released, 98 selected markets announced

Start date delayed from July 1, 2017 to October 1, 2017

Start date further delayed to January 1, 2018

Proposal to cancel cardiac EPMs


47

Mixed Implications for CV Leaders

A Partial Reprieve, but Many Questions Remain

Source: Advisory Board, �Quick Poll on Proposed Bundled Payment Program Changes,� September 2017; Cardiovascular Roundtable research and analysis.

No CV-specific models qualify as APMs

Yet to be announced voluntary CV bundles on the horizon for 2018

Removes opportunity to partner across institution on shared episodic cost goal

Uncertain future of public sector value-based payment initiatives

How can we gain widespread support to prepare for future risk?

Should we participate in voluntary bundles?

How much should we be investing in total cost management initiatives?

Implications of the EPM Cancellation Leading to Many Decision for CV Leaders

Programs Not Pulling Back

95% of Advisory Board institutions are not decelerating their transition toward value-based care following EPM cancellation


48

More Risk on the Table Than Ever Before

Mandate for Managing Long-Term Costs Extends Beyond EPM Rule

Source: Verma S, �Medicare and Medicaid Need Innovation,� The Wall Street Journal, September 19, 2017, www.wsj.com; Burwell SM, �Progress Towards Achieving Better Care, Smarter Spending, Healthier People,� HHS, January 26, 2015, www.hhs.gov; Cardiovascular Roundtable research and analysis.

1) Inpatient Quality Reporting.

2) Value-Based Purchasing Program.

Medicare Fee-for-Service Initiatives Emphasizing Value

� Cost category 30% of MIPS score in 2019 � AMI, HF excess days in

acute care (IQR1 2018)� AMI, HF 30-day episodic

payment (VBP2 2021)

Alternative Payment Models

MACRA emphasizing episodic-cost measures

Episodic value measures added to pay-for-performance, quality reporting programs, e.g.,:

New voluntary bundled payment models to be announced for 2018

50%HHS goal for percent of Medicare payment

in alternative payment models by 2018

CMS Still Pushing Toward Risk

MACRA Pay-for-Performance Bundled Payments


49

Private Sector Spurring More Innovation

Risk-Based Payment Models Not Losing Steam for Private Payers

Source: Health Care Transformation Task Force, �Health Care Transformation Task Force Urges Incoming Administration and Congress to Continue Drive for Value-Based Payments,� December 6, 2016, available on www.hcttf.org; Cardiovascular Roundtable research and analysis.

1) Smarter Management And Resource use for Today�s complex cardiac Care.

2) Medicaid-led, multi-payer, multi-part payment model.

Percent of payments to be tied to risk-based payment models by 2020

Commitment from Health Care Transformation Task Force

Sample Private Sector Payment Innovations Impacting CV

The SMARTCare1 program has proposed a bundled payment for diagnosis and treatment of stable ischemic heart disease

Horizon Blue Cross Blue Shield of New Jersey�s Episodes of Care program includes HF and CABG episode payments

Arkansas Health Care Payment Improvement Initiative2 includes HF and CABG episode payments

75%


50

Medicare Advantage Increasing Its Reach

Private Models Testing Payment Innovation in Medicare

Source: CMS; CBO, �March 2015 Medicare Baseline,� March 9, 2015, available at www.cbo.gov; Cardiovascular Roundtable research and analysis.

MA1 Continues to Grow

Enrollment in Millions, Percentage

of Total Medicare Population

5.6M(13%)

16.8M(31%)

202520152005

30.0M40%

CMS testing Medicare Advantage Value-Based Insurance Design (VBID)Model for enrollees in select states with defined chronic conditions2

Medicare Advantage will count as a MACRA APM starting in 2021

Implications on CV Programs

More capitation

Tying more payment to cost, quality

1) Medicare Advantage.

2) Including diabetes, CHF, past stroke, hypertension, COPD, CAD.

Focus on closing care gaps


51


Playbook for CV Episodic Cost Management

Identify where you have the greatest

opportunity to reduce costs across the

continuum as both public and private

payers increase scrutiny

Provide high-quality cross-continuum care

to attract patients, providers, and payers

and reduce unnecessary utilization

1

Improve Quality of Care

2

3


CV Playbook for Avoidable Costs

Playbook for Reducing CV Care Variation

Learn More About 2018 Medicare Updates

Reduce EpisodicCare Costs

Medicare Payment Update Final Rule for Hospital Inpatient Payments for FY 2018

Medicare Payment Update Final Rule for Hospital Outpatient Payments for CY 2018

CV Readmission Reduction Toolkits

Understand what metrics your program

will be measured against in Medicare

pay-for-performance programs


52

5 Market Realities Impacting CV Programs


#1

#2

#3

#4

#5

Margin pressure will only intensify for CV

CV is not just increasingly an outpatient business, but an ambulatory business

MACRA is changing physician payment as well as how hospital�s should align with physicians

As referring providers become more accountable for population health, CV will be expected to play a bigger role

The shift to risk is not abating�more CV payment will be tied to cross-continuum cost and quality in the future


ROAD MAP53





54

The Perils of Teaching to the Test

Former Reactive Strategies Not Pathways to Success in Uncertain Market


2010 2016 2017+

30-day HF Readmission Penalties Announced

Response

Cardiac bundles cancelled

Preparation

� Define no-regrets priorities to succeed under risk-based payment models

� Prioritize initiatives based on needs of market, program goals

� Develop a comprehensive strategy to enhance quality, cost outcomes for CV patients

Old Response to Risk New Plan for Risk

� Direct program efforts to HF patient population

� Hire nurse navigators to coordinate HF care

� Narrow focus on 30-days post-discharge

Mandatory Cardiac Bundles Announced

Response

� Redesign physician incentives to support CABG, AMI outcomes

� Support PAC providers in delivering high-quality care through 90 days

First cardiac bundles track CABG, AMI outcomes for 90-days

Planning for an Uncertain Future

Market Shift Market Shift


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Advisory Board is a division of The Advisory Board Company. Advisory Board has made efforts to verify the accuracy of the information it provides to members. This report relies on data obtained from many sources, however, and Advisory Board cannot guarantee the accuracy of the information provided or any analysis based thereon. In addition, Advisory Board is not in the business of giving legal, medical, accounting, or other professional advice, and its reports should not be construedas professional advice. In particular, members should not rely on any legal commentary in this report as a basis for action, or assume that any tactics described herein would be permitted by applicable law or appropriate for a given member�s situation. Members are advised to consult with appropriate professionals concerning legal, medical, tax, or accounting issues, before implementing any of these tactics. Neither Advisory Board nor its officers, directors, trustees, employees, and agents shall be liable for any claims, liabilities, or expenses relating to (a) any errors or omissions in this report, whether caused by Advisory Board or any of its employees or agents, or sources or other third parties, (b) any recommendation or graded ranking by Advisory Board, or (c) failure of memberand its employees and agents to abide by the terms set forth herein.

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IMPORTANT: Please read the following.

Advisory Board has prepared this report for the exclusive use of its members.Each member acknowledges and agrees that this report and the information contained herein (collectively, the �Report�) are confidential and proprietary to Advisory Board. By accepting delivery of this Report, each member agrees toabide by the terms as stated herein, including the following:

1. Advisory Board owns all right, title, and interest in and to this Report. Except as stated herein, no right, license, permission, or interest of any kind in this Report is intended to be given, transferred to, or acquired by a member.Each member is authorized to use this Report only to the extent expressly authorized herein.

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Cardiovascular Roundtable

Project DirectorJulie Bass, MPH

[email protected]

Research TeamMarissa (Schwartz) Schaffer

Practice ManagerMegan Tooley

Design ConsultantJoy Drakes

Sruti Nataraja, MPH

Managing Director

Allison Shimooka, MBA

Executive Director

2445 M Street NW, Washington DC 20037P 202.266.5600 ! F 202.266.5700 ! advisory.com

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