Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

Healthcare Financial Management Association

Insurance & Reimbursement Update

Blue Cross Blue Shield of MI

March 22, 2012

Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

Topics:

- Population-based Performance- Changes to PHA Incentive Program- Other Update Issues

Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

Population-based Performance for Hospitals and Health Systems:

Supporting the Development of a Value-based Hospital Program to align

with Physicians

Blue Cross Blue Shield of MI Department of Clinical Epidemiology & Biostatistics

March 16, 2012

4

Overview

• Overview of BCBSM’s PhysicianPhysician Incentive Program

• Why focus on population-based performance for HospitalsHospitals?

• Overview of Population-based Analytics for HospitalsHospitals– Methods: Inclusion / Exclusion Criteria – Measures: Payment and Utilization Metrics– Defining a Hospital’s Population – Results: Population-based Health System Metric

Calculations

• Dissemination to Provider and Hospital Community - Enhanced Population Insights report

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Introduction: BCBSM’s Physician Incentive Program

Physician Group Incentive Program (PGIP) - launched in 2004

• Goal: lower health care costs and reduce patient complications by rewarding for infrastructure development to measure and improve the care of patients

• Physicians enroll by joining Physician Organizations (PO) that act as facilitators (15,471 physicians as of February 2012)

• Incentive distribution at the PO-level and related to specific initiative participation and performance (approx. $100 million)

6

Introduction: PGIP Initiatives

Core Clinical Process Initiatives• Evidence Based Care Tracking• Coordination of Care• Extended Access• Individual Care Management• Linkage to Community Svcs• Patient-Provider Partnership• Performance Reporting• Preventive Services• Self-Management Support• Specialist Referral Process• Test Tracking and Follow-up

Clinical IT-Focused Initiatives• Electronic Prescribing• Patient Web Portal• Patient Registry

Improvement Capacity Initiatives• Establishing Staff Dedicated to

Managing/Coaching Process Improvement Teams

• Establishing Analytics & Reporting Staff

Condition-Focused Initiatives• Cardiac Care• Chronic Kidney Disease• Encouraging Evidence-Based Use

of Hysterectomy• Encouraging Evidence-Based Use

of Labor Induction• Environmental Cancer

Service-Focused Initiatives• Emergency Department Utilization• Pharmacy Initiative: Increasing the

Use of Generic Drugs• Inpatient Utilization • Radiology Management

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Introduction: Patient-Centered Medical Home

• Launched in 2008 • Physician practices are designated as a PCMH based on assessment of Capabilities (i.e. e-Prescribing) & Performance (cost and use measures)

• All physician practices in PGIP are eligible for designation

•PCPs within designated PCMH practices receive higher level of reimbursement (10% uplift) for office-based Evaluation and Management codes

8

Introduction: Organized Systems of Care (OSC)

• Communities of providers including primary and specialty care physicians along with hospitals

• Joint effort to measure performance, set goals, track progress, and coordinate care across the continuum for the primary care-attributed patient population

• Sub-POs meeting “benchmark” levels for Performance (point-in-time PMPM) or Improvement (PMPM trend)

• PCPs who received PCMH 10% uplift AND who practice in “benchmark” Sub-POs additional 10% uplift (total 20%) for office visits

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Summary of Current PGIP Incentive Programs

Model Features PGIP Initiatives PCMH Designation

Organized System of Care (PCP Uplift)

Who gets the incentive?

PO Physician (PCP) Physician (PCP)

On whose performance is the incentive based?

PO Practice Sub-PO

How much is the incentive?

Varies based on 1) weight of each

initiative & 2) size of the PO

10% Uplift on Office Visits

(E&M)

Additional 10% Uplift on Office Visits

(E&M)

What metrics are included?

Initiative-specific utilization rates

Combo of Capabilities & Quality/Cost

Metrics

Performance (point-in-time PMPM) or

Improvement (PMPM trend)

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Why focus on population-based performance for hospitals?

• Population-based performance is a mechanism for addressing key challenges for Organized Systems of Care

– Connects hospitals and physicians through shared patient populations

– Going forward, population-based performance metrics will determine a portion of hospital reimbursement and updates

• Phase 1: Payments tied to infrastructure development• Phase 2: Payments tied to performance measures

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Overview of Population-based Analytics for Hospitals

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Methods: Inclusion / Exclusion Criteria

• Membership Criteria:– BCBSM Non-HMO Commercial members (0-64 years) who

reside in Michigan – Have a relationship with a primary care physician (PCP)

(currently used in all PGIP incentive programs)(currently used in all PGIP incentive programs)

• Claims Criteria:– Includes both Medical-Surgical and Pharmacy claims– Includes both in-state and out-of-state paid claims– Excludes the top 2% of total attributed members who are

cost outliers (methodology used in PGIP physician uplift)(methodology used in PGIP physician uplift)

• Physician Criteria:– PCPs participating in PGIP were grouped by Sub-PO – Non-PGIP PCPs were grouped represented as a single group

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Measures Overview

Payment Metrics:• “Adjusted” Actual Cost

PMPM (Utilization)• “Adjusted” Actual Cost

Monthly PMPM (Trend)

Utilization Metrics:• Weighted Utilization

(a.k.a. Standard Cost PMPM)

PGIP Utilization Metrics:• Emergency Department

Visits (Overall & PCS)

• Inpatient Hospitalizations– Overall, Non-Maternity

Discharges– ACSC Discharges– 30-Day Readmissions

• Radiology (High Tech & Low Tech Imaging)

• Pharmacy– Generic Utilization* – Pharmacy Script Rates

* Reported as Generic Dispensing Rate (GDR) in the current PGIP dashboard report

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Measures: Payment Metrics

• Reports will not include any actual prices for hospital services (actual prices included in calculating trend PMPM but weighted by hospital so will not allow for any determination of hospital pricing)

• “Adjusted” actual costs*– Reflect comparable patient care costs by removing

charity, bad debt, direct graduate medical education (DGME) and indirect medical education (IME)

– Used in the calculations of both the Performance (point-in-time PMPM) and Improvement (monthly trend)

* “Adjusted” actual costs as utilized in hospital measures will also be used for OSC physician uplift analytics to ensure continuity across both hospital and physician programs

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Measures: Utilization Metrics

• Weighted Utilization (a.k.a. Standard Cost PMPM)– Reflects pure utilization by removing price variation– Applies a single cost per procedure type (i.e. DRG) to

all claims regardless of the place of service– Allows for valid comparison of utilization across time

periods, locations of service and contractual relationships

– Currently used in PGIP analytics (Initiative-specific Currently used in PGIP analytics (Initiative-specific reports)reports)

Note: For example of the standard cost concept, see the Supplemental Slides: Core Concepts

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Overview of Population-based Analytics for Hospitals:

Defining a Hospital’s Population

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Defining a Hospital’s Population: Step 1

Member PCPCare Relationship (Attribution)

Physician Organization (PO)

Sub-PO #1

Sub-PO #3

Sub-PO #2

Sub-PO #4

Care relationship between a member and a single PCP

during a two-year period of claims

Based on E&M visits (99201-99205, 99211-99215,

99381-99387 and 99391-99397)

A tie-breaking methodology is utilized for members who see

more than one PCP during the given time period

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Defining a Hospital’s Population

• Hospital population measures include patients of:

– PGIP physician organization sub-units that comprise at least 10 percent of the hospital’s utilizing members (with a primary care relationship)

– OSCs where the hospital comprises at least 20 percent of the OSC’s inpatient volume

• A hospital’s population metrics are based on the weighted averages of its affiliated PO sub-units and OSC populations.

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Total BCBSM Members (0-64) with a Primary Care Relationship

1,869,453

BCBSM Members (0-64) with a Primary Care Relationship

that Utilized Services at a Michigan facility in 2010

1,347,414 (72.1%)

BCBSM Members (0-64) with a Primary Care Relationship

that DID NOT Utilize Services at a Michigan facility in 2010

522,039 (27.9%)

BCBSM Members (0-64) with a Primary Care Relationship

that Utilized Services at Hospital A51,693 (3.8%)

BCBSM Members (0-64) with a Primary Care Relationship

that Utilized Services NOT at Hospital A1,295,721 (96.2%)

Sub-PO #1: 17,764 (34%)

Sub-PO #2 : 6,632 (13%)

Sub-PO #3: 2,637 (5%)

PGIP Sub-Physician Organizations with whom the BCBSM Member has a Care Relationship

with a Participating PCP

Remaining Sub-POs: 24,660 (48%)

These are the members that are included in the “weight” calculation

(i.e. 17,764 / 51,693 = 34.4%).

We then would multiply 34.4% by Sub-PO #1’s total cost PMPM to get their

component of Hospital A’s PMPM.

This calculation would continue for both Sub-PO #2 and Sub-PO #3 and then

combined all “weighted” rates to get a total population-based rate for Hospital A.

Among the 1.8M members with a PCP,

72.1% had a service at a Michigan acute care

hospital in 2010)

Defining a Hospital’s Population: Step 2

Sub-PO #3 was included based on OSC 20% criteria

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Hospital CHospital B

Hospital AOrganized System of Care(10,000 Inpatient Admissions)

Sub-PO 1

(90% Physician Affiliation)

Sub-PO 2

(100% Physician Affiliation)

Sub-PO 3

(33% Physician Affiliation)

500 Inpatient Admissions

2,500 Inpatient Admissions

(25% OSC’s IP volume)

300 Inpatient Admissions

Note: Sub-PO 2 may not meet 10% threshold for Hospital A….. BUT it’s affiliated OSC does meet the 20% Inpatient

threshold for Hospital A

Defining a Hospital’s Population: Step 3

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Overview of Population-based Analytics for Hospitals and

Health Systems:

Results - Population-based Health System Metric Calculations

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Weighted Hospital Measure Calculation Overview(Example: Risk-Adjusted Total Cost PMPM for Hospital A)

HOSPITAL A($95.20 + $40.30 + $15.00) = $150.50 Total Cost PMPM

Sub-PO B($310 Total Cost PMPM)

13% of Utilizing Members (weight)

Sub-PO C($305 Total Cost PMPM)5% of Utilizing Members

(weight)

Sub-PO A($280 Total Cost PMPM)

34% of Utilizing Members (weight)

34% * $280 = ($95.20)

13% * $310 = ($40.30)

5% * $300= ($15.00)

Note: This example assumes that only three Sub-POs contributed to Health System A’s total utilizing members. For actual calculations, only the Sub-POs consisting of at least 10% of each hospital’s utilizing members AND Sub-POs with OSCs where the hospital comprises at least 20% of the OSC’s hospital services are included.

23REMINDER: Utilization and cost metrics reported for each health system or hospital are derived from a population

perspective and NOT based on reimbursement levels

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Dissemination to Provider and Hospital Community:

Enhanced Reporting: New Population Insights report

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New Population Insights Reports

• Replaces previous Hospital Insights reports, which focused only on utilization

• Provides both payment and utilization metrics

• Comparisons of all Michigan hospitals and health systems qualifying for analysis

• First reports scheduled for distribution in June 2012 to BOTH hospitals and PGIP POs

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New Population Insights Reports: Link to PGIP

New Population Insights reports will tie directly to the current PGIP reporting:– Leverage methods and formatting of PGIP

physician reports– Utilize the same metrics to determine both

performance and improvement (as in the OSC Uplift)

– Incorporate additional PGIP-specific metrics – Same level of transparency (performance is not

blinded)– All metrics adjusted for patient risk

27

Questions?

Amanda Harrier, MPHAHarrier@BCBSM.com

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association.

P4P Programs

2011 and 2012

Components and Weights

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PG1-4 P4P Quality Components

Quality Indicator 2011 2012 Weight

CLA-BSI (central line associated-blood stream infection) X Retired

20 – 52%

Acute Myocardial infarction (AMI-1, 2, 3, 5 measures) X Retired

Pneumonia - (2011 Pn2, 6b measures and 2012 only Pn6b measure) X X

Acute myocardial infarction (AMI8a measure) X X

SCIP CABG/Cardio - (Inf-1a, 3a measures) X Retired

SCIP Hip/Knee - (Inf-1a, 3a measures) X Retired

SCIP Colon - (Inf-1a, 3a measures) X Retired

SCIP Hysterectomy - (Inf-1a, 3a measures) X Retired

Elective induction of delivery before 39 weeks (new in 2011) X X

SCIP CABG/Cardio (new in 2011)(Inf-1a, 3a, CARD-2, VTE-1,2 measures)

X X

SCIP Hip/Knee (new in 2011)(Inf-1a, 3a, CARD-2, VTE-1,2 measures)

X X

SCIP Colon (new in 2011)(Inf-1a, 3a, CARD-2, VTE-1,2 measures)

X X

SCIP Hysterectomy (new in 2011)(Inf-1a, 3a, CARD-2, VTE-1,2 measures)

X X

CQIs - (Maximum 10 and Minimum 2) X X 8 – 40%

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PG1-4 P4P Efficiency Component

Efficiency Component 2011 2012 WeightCombined Maximum

Weight

Standardized Cost/Case compare to statewide mean

X X 30%

40%Cost per case change compare to inflation index

(using NHIPI)

X X 20%

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PG5 P4P Quality Component

Quality Initiatives - CAH 2011 2012 Weight

Must participate in the MICAH Quality Network(In 2012, the score is based on a performance index)

X X

70%

Participation in at least one of the following initiatives:Keystone HAIKeystone SurgeryKeystone MISTA*ARKeystone ER (2012)HCAHPS (2012 for select hospitals that cannot participate

in Keystone initiatives)

(In 2012, the score is based on a performance index)

X X

Quality Initiatives – non-CAH 2011 2012 Weight

Must participate in at least two of the following initiatives:Keystone HAIKeystone SurgeryKeystone MISTA*ARKeystone ER (2012)MICAH Quality Network

(In 2012, the score is based on a performance index)

X X 60%

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PG5 P4P Quality Component (Continue)

Quality Indicators- CAH 2011 2012Weights Total Weight

Seven ER Transfer Perfect Care Measures (established in 2007 by MICAH QN)

X Retired 15%

30%

Median time from ED arrival to ED departure fro discharged patients (CMS OP-18) new 2012

X 5%

Transition record with specified elements received by discharged patients (CMS OP- 19) new 2012

X 5%

Door to diagnostic evaluation by a qualified medical personnel (CMS OP – 20) new 2012

X 5%

Aspirin at arrival – overall (AMI and chest pain patients) OP – 4a

X X 7.5%

Median time to ECG – overall (AMI and chest pain patients) OP- 5a

X X 7.5%

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PG5 P4P Quality Component (Continue)

Quality Indicators – non-CAH 2011 2012 Weights Total Weight

Acute Myocardial infarction (AMI-1, 2, 3, 5 measures) X X 10%

40%

Heart Failure – Left ventricular ejection fraction less than 40 percent prescribed ACEI or ARB at discharge (HF-3)

X X 6%

Pneumonia – initial antibiotic selection (for non-ICU patents) consistent with current recommendations (Pn-6b)

X X 6%

Pneumonia - Pneumococcal vaccine (screening or administration) prior to discharge (Pn-2)

X X 6%

Aspirin at arrival – overall (AMI and chest pain patients - OP – 4a)

X X 6%

Median time to ECG – overall (AMI and chest pain patients - OP- 5a)

X X 6%