Download - PYA Speaks the New Language of Healthcare
Page 1April 25, 2013
Florida Institute of Certified Public Accountants
Learning the New Language of Healthcare
April 25, 2013
Page 2April 25, 2013
Florida Institute of Certified Public Accountants
What am I Trying to Say?
Everyone knows these…
LOL Laughing out loud
SMH Shaking my head
BRB Be right back
JK Just kidding
BFF Best friends forever
BTW By the way
But what about these?
PQRS Patient Quality Reporting System
PCMH Patient Centered Medical Home
CIN Clinically Integrated Network
VBP Value-Based Purchasing
Page 3April 25, 2013
Florida Institute of Certified Public Accountants
ACO
CIN
PHOVBP
PQRS
Are We Speaking the Same Language?
Page 4April 25, 2013
Florida Institute of Certified Public Accountants
But health reform isn’t just changing the industry we work in – it’s changing the language we speak.
Healthcare Has Changed!
Payers
Healthcare Facilities
Specialists
Primary Care Physicians
Patients
Moving from… Moving toward…
Patients
Primary Care Physicians
Healthcare Facilities
Specialists
Payers
Page 5April 25, 2013
Florida Institute of Certified Public Accountants
U.S. Healthcare Today: High Cost, Questionable Quality
Where is the Value??
$2,729 $2,870 $2,902 $3,470 $3,696
$7,538
Japan Italy Spain Sweden France U.S.A.
Total Health Expenditures per Capita
1 France
2 Italy
7 Spain
10 Japan
23 Sweden
37 U.S.A.
WHO's Ranking of Health by Country
Source: Organization for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database).
Page 6April 25, 2013
Florida Institute of Certified Public Accountants
Today’s Healthcare:Moving from Volume to Value
• FFS: Fee-for-Service
– The primary method of healthcare reimbursement that incentivizes providers to provide higher volumes of services because payment is solely dependent upon the quantity of services provided, not the quality
– Payments are issued retrospectively
– FFS has been proven to raise healthcare costsbecause it promotes overutilization
• As U.S. healthcare costs associated with FFS skyrocket, significant efforts have been taken to link payment to the quality and efficiency of care provided instead of volume.
Page 7April 25, 2013
Florida Institute of Certified Public Accountants
Bundled Payments
Partial Capitation
Global Payment
Fee-for- Service
Shared Savings
Reactive Focused Predictive
Visitor
Symptomatic
Acute Needs
Services & Supplies
Unit Based
No Financial Risk
Patient
Episode
Most Common Conditions
Packaged Treatments
Efficiency Based
Partial Financial Risk
Person
Overall Health
Community Health Characteristics
Manage Well-Being
Outcome Based
Full Financial Risk
Evolution of Reimbursement
Page 8April 25, 2013
Florida Institute of Certified Public Accountants
The Healthcare System of the Past
PatientsPhysicians/Providers Payers
Hospitals & Other Providers
$
Inefficiency
Information
Economics
Page 9April 25, 2013
Florida Institute of Certified Public Accountants
Hypothetical
Episode 1: Hip Replacement
• Orthopedic surgeon• Surgery
Anesthesia Pathology
• Acute Care• Rehabilitation
PT
Martha is a 67-year-old women who needs a hip replacement.
- payment
- payment- payment- payment
- payment
Develops rash – dermatology consult - payment
Episode 2: Nine months later
• ED• Admitted for pneumonia• Treated by hospitalist• Consulted by cardiologist
- payment- payment
- payment
Episode 3: Six months later – Well Check
• Gaping hole in information• Information from previous two
episodes of care may never reach primary care provider Drug interactions Duplicative testing
- payment
Patient-Centered Medical Home
Primary Care Physician
Specialist
Physician
Physician
IPA
Bundled Payment
+ Coordinated Care
+ $ for Coordinated Care
PHO
Payer
Narrow Network
ACO
Shared Savings
Capitation
The Road to Clinical Integration
Page 11April 25, 2013
Florida Institute of Certified Public Accountants
What Does “Value” Look Like?
VALUE=
QUALITY COST
EFFICIENCY+ +
Page 12April 25, 2013
Florida Institute of Certified Public Accountants
What is a “Value-Based Payment” Model?
Value-Based Payment:A payment model which rewards healthcare providers for meeting certain predetermined performance measures related to quality and efficiency
Efficiency: The state or quality of achieving maximum productivity with minimum
wasted effort or expense.Quality: The standard of something as measured against other things of a similar
kind; the degree of excellence of something: “quality of life;” also the
general excellence of standard or level.Value: The regard that something is held to
deserve; the importance or preciousness of something: “Your support is of great
value.”
Page 13April 25, 2013
Florida Institute of Certified Public Accountants
Value: The Answer to FFS?
VBP: Value-Based Purchasing
CMS reimbursement model shifting away from paying providers based only on volume of services provided
Creates incentives to encourage healthcare providers to render high quality care and lower total costs
Goal is to foster joint clinical and financial accountability
Page 14April 25, 2013
Florida Institute of Certified Public Accountants
HVBP: Hospital Value-Based Purchasing
CMS initiative that adjusts acute-care hospitals’ payments for the quality of care that they provide to Medicare beneficiaries – quality over volume!
Hospitals’ payments adjusted for how closely they follow best clinical practices and how well the hospital enhances the patients’ experiences of care
When hospitals follow proven best practices, patients receive higher quality care and see better outcomes.
Value: HVBP
“Several industries have transformed themselves with human errors in mind. The airline industry is a favorite example. As a result of air craft design, regulation, the use of checklists, and other systems designs, we are almost guaranteed to reach our final destination safely. According to data collected between 2000 and 2005, the chances of a fatality on a US airline flight was one in 22.8 million.”
– IHI Open School, Not Just Great Ideas: The Surgical Safety Checklist and the ICU Walker.
Page 15April 25, 2013
Florida Institute of Certified Public Accountants
• Participating hospitals began receiving payments/penalties for quality of care October 1, 2012, the start of FY2013. The incentive payments are based on a hospital’s performance during the period from July 1, 2011 to March 31, 2012.
• HVBP is based on data collected through the Hospital Inpatient Quality Reporting (IQR) Program.
– CMS has adopted 13 of 45 quality measurestracked in the IQR for FY2013.
Value: HVBP
Page 16April 25, 2013
Florida Institute of Certified Public Accountants
HVBP• Penalties for high readmission rates
– FY12-14 for AMI, heart failure, and pneumonia;expand list in FY15
– Reduce overall inpatient payment by 1%-3%
• Rewards and penalties based on qualitymeasures and patient satisfaction scores
– Begins in FY13, but based on earlier performance
• Penalties for Hospital Acquired Conditions (HACs)/Never Events
– In FY15, top 25% in HACs will have payments reduced by 1%
Page 17April 25, 2013
Florida Institute of Certified Public Accountants
Value: PVBP
PVBP: Physician Value-Based Purchasing
• Physician feedback program
– Individual reports on resource use and quality of careas compared to peer group
• Physician value-based payment modifier
– Phased in between 2015 and 2017
– 2013 performance determines 2015 modifier
– Budget neutral
– wRVU x conversion factor x VBPM
• Positive number = paid more
• Negative number = paid less
Page 18April 25, 2013
Florida Institute of Certified Public Accountants
• PQI: Physician Quality Incentives– PQRS: Physician Quality Reporting System
• When created in 2007, initially named the Physician Quality Reporting Initiative (PQRI) and included 74 clinical quality measures for physicians to report via claims data
• Today, PQRS has over 203 quality measures available for reporting, including both clinical and structural, that can be reported through claimsor accepted registries
• Paid for reporting (pay-for-reportingor P4R), not attaining certain scores(pay-for-performance or P4P)
PQI, PQRS, P4R, and P4P!
Page 19April 25, 2013
Florida Institute of Certified Public Accountants
Physician Quality Reporting System(PQRS)
• Today - 203 quality measures available for reporting
• Paid for reporting (pay-for-reporting or P4R), not attaining certain scores (pay-for-performance or P4P)
• Carrots followed by sticks
– 0.5% bonus for 2012-2014
– 1.5% penalty for 2015
– 2.0% penalty for 2016 and thereafter
Page 20April 25, 2013
Florida Institute of Certified Public Accountants
Other Forms of PQI
Meaningful Use Incentives/Penalties Stage One objectives and clinical quality measures 1% penalty in 2015 if not MU in 2014; 2% in 2016;
3% in 2017; 4% in 2018 or 2019
Electronic Prescription Incentive Program 1.0% bonus in 2011(unless received EHR bonus) 1.0% penalty in 2012 unless used eRx 10x by 06/30/11 1.5% penalty in 2013 unless used eRx 25x by 12/31/11
MU
eRx
Page 21April 25, 2013
Florida Institute of Certified Public Accountants
To Achieve Value, Moving Toward Integration and Alignment
More IntegrationLess Integration
More Common
Less Common
Equipment JV
Clinical Co-Management
Medical Directorships
ACO
Real Estate JV
Medical HomeModels
PHO/ Narrow NetworkBundled
Payments
Professional Services Agreement
Physician Employment
Page 22April 25, 2013
Florida Institute of Certified Public Accountants
Clinical Integration (CI):The Basics
The extent to which healthcare services are coordinated across providers, functions, activities, processes, and operating units so as to maximize the value of services delivered
Includes both horizontal integration (coordination of activities at the same stage of delivery of care) as well as vertical integration (the coordination of services at different stages)
Page 23April 25, 2013
Florida Institute of Certified Public Accountants
PCMHPCMH: Patient-Centered Medical Home
• Improves primary care through patient-centered care, cooperation among physicians, and coordination and tracking care over time
• Facilitates partnerships among patients, their physicians and the patient’s family members
• Care is facilitated by registries, health information technology (HIT), health information exchange (HIE), etc. to ensure that patients receive the appropriate care at the appropriate time in the appropriate manner
Patient-Centered Medical Home
Primary Care Physician
+ Coordinated Care
+ $ for Coordinated Care
Page 24April 25, 2013
Florida Institute of Certified Public Accountants
IPA: Independent Practice Association
• Association of medical doctors (primary care physicians and specialists) and other healthcare professionals that have contracted with most PPO, POS, and HMO insurance plans
IPA
Specialist
Physician
Physician
Primary Care Physician
Page 25April 25, 2013
Florida Institute of Certified Public Accountants
PHO
Primary Care
PhysicianSpecialist
Physician
PHO: Physician Hospital Organization
• Joint venture between hospital(s) and physician group(s)
• Acts as a single agent for managed care contracting
• Aligns interests of hospitals and physicians but allows each to retain autonomy
• Opportunity to act as a vehicle to advance clinical integration network initiatives
Physician
Page 26April 25, 2013
Florida Institute of Certified Public Accountants
CIN
CIN: Clinically Integrated Network
A network of physicians working in collaboration with a hospital, using a performance management infrastructure to develop and implement initiatives to improve the quality and efficiency of healthcare services
Network negotiates and contracts with payers for improved reimbursement based on quality and efficiency
Page 27April 25, 2013
Florida Institute of Certified Public Accountants
What Does a CIN Do?
Coordinates continuum of care across affiliated caregivers
Implements evidence-based clinical protocols
Establishes related quality measures and performance standards
Evaluates individual performance and implements improvement plans
Partners with payers to develop contracts that drive definable clinical improvement and efficiencies
Page 28April 25, 2013
Florida Institute of Certified Public Accountants
Clinical Integration: the Road from FFS to ACO
FFSP4P,
Bundled PaymentPartial/Global
Capitation
Payers
Providers
Hospitals
Payers
CIN(P4P) ACO
Page 29April 25, 2013
Florida Institute of Certified Public Accountants
ACO: Accountable Care Organization
• Network of physicians and hospitals sharing responsibility for providing care to patients
• Agree to manage all of the healthcare needs of at least 5,000 Medicare beneficiaries for a minimum of three years
“Think of it as buying a television. A TV manufacturer like Sony may contract with many suppliers to build sets. Like Sony does for TVs, an ACO would bring together the different component parts of care for the patient – primary care, specialists, hospitals, home health care, etc. – and ensure that all of the ‘parts work well together.’ The problem today is that patients are getting each part of their health care separately. People want to buy individual circuit boards, not a whole TV. If we can show them that the TV works better, maybe they'll buy it, rather than assembling a patchwork of services themselves.”
– Harold Miller, president and CEO of the Network for Regional Healthcare Improvement
ACO
Page 30April 25, 2013
Florida Institute of Certified Public Accountants
MSSP
MSSP: Medicare Shared Savings Program
Pursuant to PPACA, the Secretary was directed to implement the Medicare Shared Savings Program (MSSP) by January 1, 2012
Financial incentive for aligned providers to implement specific integration model
Page 31April 25, 2013
Florida Institute of Certified Public Accountants
MSSP ACO
• Clinically integrated networks that have contracted with CMS to share in whatever money the community saves
– To be eligible for shared savings, must meet minimum performance standards for 33 ACO quality measures
– How do we know if they have “saved?”CMS reviews the historic costs of the patients in the network and uses that as the baseline to determine savings.
Page 32April 25, 2013
Florida Institute of Certified Public Accountants
MSSP ACO FunctionsWhat Really Matters
Establish and maintain quality assurance and
improvement program.
Promote evidence-based medicine, patient engagement, care
coordination, patient-centeredness.
Compile and report participants’ quality measure scores.
Distribute shared savings and assess shared losses.
Page 33April 25, 2013
Florida Institute of Certified Public Accountants
Each ACO participant continues to bill fee-for-service independently
Eligibility for and level of shared savings based on performance score
Calculate actual annual Medicare spent for assigned beneficiaries against pre-determined benchmark
Apply formula to determine share of savings (losses)
Calculating Shared Savings/Losses
Page 34April 25, 2013
Florida Institute of Certified Public Accountants
Episode 1: Hip Replacement
• Orthopedic Surgeon• Surgery
o Anesthesiao Pathology
• Acute Care• Rehabilitation
o PT
BPPBPP: Bundled Payment Program
• A single “bundled” payment covers the entire range of services that are rendered during a single episode of care or over a specified time period and are delivered by two or more healthcare providers
• Example: Martha’s hip replacement
- payment
- payment- payment
- payment
Develops rash – dermatology consult - payment
payment
- payment- payment
Page 35April 25, 2013
Florida Institute of Certified Public Accountants
Success in Bundling for Episodes of Care
Successful bundling for episode of
care
Decrease Costs• Financial/Gain-
sharing Model
Create Efficiencies
• Re-design Care Model
Improve Care• Quality Focus
Page 36April 25, 2013
Florida Institute of Certified Public Accountants
Bundle Up! Bundled Payments are Coming
Based on Medicare ACE Demonstration Project –
free range ACO
Single payment for defined group of services within specified episode
of care
Pricing based on discount of payer’s historic total cost
Gain-sharing incentives
Page 37April 25, 2013
Florida Institute of Certified Public Accountants
Questions?
Page 38April 25, 2013
Florida Institute of Certified Public Accountants
TermsACO Accountable Care Organization
BPP Bundled Payment Program
CIN Clinical Integrated Network
eRx Electronic Prescription
FFS Fee-for-Service
HACs Hospital Acquired Conditions
HIE Health Information Exchange
HIT Health Information Technology
HVBP Hospital Value-Based Purchasing
IPA Independent Practice Association
IQR Inpatient Quality Reporting
MSSP Medicare Shared Savings Program
MU Meaningful Use
P4P Pay-for-Performance
P4R Pay-for-Reporting
PCMH Patient Centered Medical Home
PHO Physician Hospital Organization
PQI Physician Quality Incentives
PQRS Patient Quality Reporting System
PQRS Physician Quality Reporting System
PVBP Physician Value-Based Purchasing
VBP Value-Based Purchasing
Page 39April 25, 2013
Florida Institute of Certified Public Accountants
Thank you!
David McMillan
Principal
PYA
865-673-0844