december 11, 2015 1 being successful under bundled payments; what we’ve learned so far
TRANSCRIPT
December 11, 2015
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Being Successful Under Bundled Payments; What We’ve Learned So Far
Models 1, 2, 3 and 4Model 1: • inpatient stay; discounted IPPS
Models 2 and 3: • retrospective bundled payment arrangement; FFS
with reconciliation
Model 4: • single, prospective payment to hospital to pay all
costs of inpatient stay 2
What is the Bundled Payments for Care Improvement Initiative (BPCI)
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What Is It and How It Works
Models 2 and 3 48 Bundles
Based upon DRGs Choose which bundles
1 to 48 bundles 30 – 60 – 90 day risk
Longer risk had greater pricing Pricing is a combination of own historical data and regional data
Fee for service Paid to all providers during the bundle Costs accrue Some exclusions
Reconciliation
• Bundle starts after patient discharged from the hospital
• HHAs, SNFs, operating/attending physicians can initiate the bundle
• HHAs and SNFs only initiate the bundle if they are the first site of service post discharge
• If patient goes to SNF first and then HHA, the HHA does not initiate the bundle
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Model 2 vs. Model 3 Bundles
• Includes the initial hospitalization plus 30, 60, or 90 days post discharge
• Hospital or operating/attending physicians can initiate the bundle
2
3
• Model 2 bundles almost always trump Model 3 bundles• If hospital initiates the bundle, SNF or HHA cannot initiate
the bundle• Model 2 bundle cannot pass on a bundle in which they are
participating• Still need PAC providers who understand managing patients
under a bundled payment model• Risk sharing/gain sharing opportunities
• Model 2 and Model 3 bundles trump CJR• “AS IF” the CJR event did not occur; exclude the CJR event
from the hospital’s reconciliation• Hospitals paid fee for service; no risk• Risk sharing/gain sharing opportunities
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Precedence Rules
There is more bundled payment activity in Ohio than any other state in the U.S.
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Bundled Payment Market Activity
OH PA CA TX TN FL CT VA IN NJ NY IL0
20
40
60
80
100
120
140
160
Providers
OH PA CA TX TN FL CT VA IN NJ NY IL Other0
200
400
600
800
1000
1200
1400
1600
Bundles
Ohio BPCI ParticipationNovember 2015
Source: CMS
3 8 6 5 14
Maine M
ean 2 13 10
Connecticu
t Mean
New York M
ean
Massa
chuse
tts Mean 16 15 9 4 11
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
DMELTCHIRFSNFHHAReadmissionOut-patientPart BIndex Hospital
We often see significant variation in cost of a bundle across providers, clinical conditions and regions.
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Bundled Payments Overview -The CMS Perspective
Source: Archway Health BPCI Pricing files
Lower Extremity Joint Replacement (DRG470)Bundle Price Benchmarking
Done correctly, Providers can be clinically and financially successful under BPCI
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Bundled Payments Overview –The Provider Perspective
Lower Extremity Joint Replacement (DRG
470)
Source: Archway Health BPCI Pricing files
Increase Patient Satisfaction Enhance long term relationship with patients
Network Development Facilitates development of a network of preferred providers
• Does not conflict with patient choice
Low Risk Low risk way to prepare for other alternative payment initiatives
Enhance Provider Alignment Opportunity to enhance alignment and loyalty of upstream and downstream providers
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Bundled Payment Overview –The Provider Perspective
There are a number of strategic benefits for providers to participate in bundled payment programs.
Increase Net Revenue Significantly increase net revenue opportunity
Cedar Village
Case Study
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Bundled Payment for Care Improvement Initiative
•Triple Aim• Better Health• Better Experience• Lower cost
• Care Improvement Focus• Bundled Payments align incentives
How To Be Successful in Bundled Payments
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Care Transitions Program/Coordinators
Assist with providing quality care in a safe, cost-effective setting
Software Data Analytics to drive process improvement Reduce avoidable readmissions Manage to appropriate length of stay Real time data Inclusive system available to all providers along the
continuum
The Need for Real Time Data
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The CareLink App updates the dashboard with health status updates.
Demo data-Not real names.
• Case Management – real time tracking tools
• Inter-disciplinary Team – daily monitoring• Nursing, Therapy, Social Services
• Comprehensive 30-day Care Plans• Discharge Planning begins at admission• Home Care involved early• Warm hand offs between settings
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Cedar Village - Critical Factors for Success
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Q4 2014 Q1 2015 Q2 201516
16.5
17
17.5
18
18.5
19
19.5
20
20.5
ALOS
ALOS
PACN Results Under Bundled Payment Methodology
(all cause Medicare A)
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Q4 2014 Q1 2105 Q2 20150%2%4%6%8%
10%12%14%16%18%
Readmission %
Readmission %
PACN Results Under Bundled Payment Methodology (all cause Medicare A)
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Q4 2014 Q1 2015 Q2 2015$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
Profit/(Loss)
Profit/(Loss)
PACN Results Under Bundled Payment Methodology (all cause Medicare A)
Tippy Canoes
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Current – Per Diem Future – Bundled Payment
Cedar Village – by the numbers
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Description AmountST Admissions 4/1 – 11/30 429
ALOS
Medicare A 29
Med A bundles 16
Reduction in ALOS 13
Days Lost 1064
Admissions need to refill 46
Increase needed 11%
Actual increase YTD 7%
Straddling the Tippy Canoes
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Short Run
Reducing LOS reduces revenue
Gains under BPCI is shared between Convener and Episode Initiator
Gain sharing payments are delayed 9 months
Success depends on increasing admission to refill the beds
Long Run
Early adopters are learning to manage under the new payment model
Begin restructuring to adapt to shorter LOS
Success depends on managing the full 30-day episode and avoiding readmissions
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Recap
Bundled Payments are not coming, they are
already here
By 2018, CMS wants 50% or $330B of the Medicare
spend in alternate payment models (mainly
BPCI, CJR, and some ACO’s)
Precedence Rules are somewhat complicated• Model 2 almost always
trumps a Model 3
• Model 2 and Model 3 trump CJR
Success can only be achieved through acute
care/post-acute care providers partnering with a clear focus on
CMS’s Triple Aim
“Moving from the concept that the best bed is a full bed
to the concept that the best bed is an empty one – that’s a major
transition.”
Donald M. Berwick, MD, former Administrator of the Centers for Medicare and Medicaid Services (CMS). Former President and Chief Executive Officer of the Institute for Healthcare Improvement[1.
Berwick is Clinical Professor of Pediatrics and Health Care Policy in the Department of Pediatrics at the Harvard Medical School and Professor of Health Policy and Management at the Harvard School of Public Health.[17] He is also a pediatrician, Adjunct Staff in the Department of Medicine at Children's Hospital Boston, and a Consultant in Pediatrics at Massachusetts General Hospital. 22
Don Berwick, MD
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Don Berwick, MD
“Everybody is doing what makes sense to them individually. We pay hospitals to
be full, so they try to be full. We pay doctors to see patients, so they see a lot
of patients. We create a public expectation that more is better, (which
isn’t actually true) so people seek more. Everybody is doing their jobs;
we just designed the jobs wrong.”
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Don Berwick, MD
We have a long way to go. Board, executives and finance leaders still need to really convince themselves that the best way to contain
costs is to improve care.
The Cost Conundrum –
“The lesson of the high quality, low cost communities is that someone
has to be accountable for the totality of care. Otherwise the
system has no brakes.”
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Atul Gawande, MD
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Tim GrimesExecutive Director
Post-Acute Care Network
6279 Tri-Ridge Blvd.
Loveland, Ohio 45140
Cell: 937-307-4474
Office: 513-719-3502
Jan Wooles, CPA, MBAChief Financial Officer
Cedar Village Retirement Community
5467 Cedar Village Drive
Mason, Ohio 45040
Office: 513-754-3100
Contact Information