Maryland Hospital Payment Policies to

Improve Care Transitions

Patrick Redmon, Ph.D.March 19, 2013

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Health Services Cost Review Commission

• Origins– Hospitals needed a mechanism to financing Uncompensated Care– Business (trustees) wanted a way to contain costs (abandon cost-

based payment)– Maryland Hospital Association strongly supported legislation

• Enabling Legislation 1971– Enabling statute – very broad authority and language – Created a politically/legally independent agency (“HSCRC” or

“Commission”)– Unique governance structure - 7 volunteer Commissioners– Small experienced staff 28 FTEs (core analytic staff of 10-12)

• Jurisdiction– Inpatient and outpatient hospital services (no Part B)– 46 Acute Care Hospitals - $14.5 billion in revenue

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Currently Two Voluntary Payment Policies

• Admission Readmission Revenue (ARR)– Same hospital all-cause 30 day readmissions– Began in FY 2012– 31 hospitals

• Total Patient Revenue (TPR)– All inpatient and outpatient admissions– Began with one hospital over twenty years ago – Expanded to 10 hospitals (mostly rural) in FY

2011

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ARR

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ARR vs. CMS Readmission Policy• ARR

– 30 day measurement– Inclusive-all conditions, few

exemptions– Bundling of payments based

on payment weights– Hospitals keep portion of

savings from reduced readmissions based on historical performance

– Seed-funding for initial year – Case-mix adjusted

• CMS– 30 day measurement – 3 conditions (heart attack,

heart failure and pneumonia)– Ranking of performance

compared to the nation– Penalties for the worse

performers (1% penalty for the first year)

– Risk Adjustment using historical information

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Readmission Definition Differences-MD and CMS

• Same-hospital vs. Across-hospital Readmission Rates – Medicare measures readmissions across hospitals– Same-hospital readmissions are 68% of total readmissions in

Maryland• Denominator

– Per discharge (MD)– Per resident or beneficiary (Medicare)

• Episode definitions– Exclusions (planned readmits, transfers, etc.)– Tracing readmission chains (excluding readmission from being

an index admission, counting more than one readmission in the numerator, etc.)

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ARR Builds Upon the Inpatient “Charge- Per-Case” Exclusions

Excluded Cases:– CHRONIC CASE– BURN CASE– ILIZAROV– ORGAN TRANSPLANT– CHARGE < $1 or > $2,000,000– DENIED ADMISSION– 0-1 DAY LENGTH OF STAY*except for Delivery and

Newborns

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ARR- Episode of Care 30 Day Window

Admission Date: 7/1/11 Discharge Date: 7/3/11

• Initial Admission

Admission Date: 7/15/11 Discharge Date: 7/20/11

• Readmission1

Admission Date: 8/2/11Discharge Date: 8/9/11

• Readmission2

Admission Date: 8/3/11Discharge Date: 8/15/11

• New Initial Admission

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2010 Baseline 30-Day All-Cause Readmission Rates

MD vs. US MedicareFY 2010 Readmission Rates MD USReadmission per 1,000 Medicare FFS Beneficiaries 18.94 14.45Readmission as a % of Total Discharges 21.2% 18.5%Same-Hospital Readmission as a % of Total Discharges 15.4% Not Available

Source: Delmarva Foundation, Analysis of Medicare Claims

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Maryland 30-Day Same-Hospital Readmission RatesMedicare, Medicaid, All-Payer

9.8% 9.8% 9.9% 9.8% 9.6% 9.7% 9.9% 9.7% 9.5% 9.7% 9.6% 9.4% 9.5%

9.6%10.4% 10.7% 10.5%

11.0% 11.1%11.5%

11.1% 10.7% 10.9% 11.1% 10.8% 10.7%

13.9% 14.0% 14.0% 13.8%13.3% 13.7% 14.0% 13.8%

13.3% 13.3% 13.5% 13.2% 13.3%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY2009 FY2010 FY2011 FY2012

All-Payer

Medicaid

Medicare

Source: HSCRC Inpatient Discharge Database based on ARR technical specifications

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Maryland Readmission Rates Continue to Decline in More Recent Quarters

Source: HSCRC Inpatient Discharge Database

9.8% 9.8%

9.9%9.9%

9.6%

9.7%

9.9%

9.8%

9.6%

9.7%9.6%

9.4%9.5%

9.3% 9.2%

8.9%

8.4%

8.6%

8.8%

9.0%

9.2%

9.4%

9.6%

9.8%

10.0%

10.2%

2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

FY2009 FY2010 FY2011 FY2012 FY2013

Trends in 30-Day All-Cause Same-Hospital Readmissions as % of Total Discharges in Maryland

Includes 0-1 Day stays. Rates are not risk adjusted

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Top 15 APR-DRG Categories at Index Admission (First Hospitalization) FY2012

Source: HSCRC Inpatient Discharge Database, includes All-Cause 30-Day Same Hospital Readmissions, Maryland ARR Program All-Payer

Total # of Index

Admissions

# of Index Admissions

w/ Readmission

% of Index Admissions

w/ Readmission

APR_DR APR- DRG Description194 Heart failure720 Septicemia & disseminated infections 17,764 2,234 12.58%140 Chronic obstructive pulmonary 12,601 1,924 15.27%139 Other pneumonia 13,248 1,470 11.10%460 Renal failure 8,735 1,289 14.76%860 Rehabilitation 8,427 1,072 12.72%693 Chemotherapy 1,743 1,062 60.93%753 Bipolar disorders 10,592 1,043 9.85%463 Kidney & urinary tract infections 8,861 1,036 11.69%201 Cardiac arrhythmia & conduction 9,248 1,028 11.12%566 Other antepartum diagnoses 3,494 979 28.02%751 Major depressive disorders & 9,028 838 9.28%750 Schizophrenia 6,216 832 13.38%383 Cellulitis & other bacterial skin 10,445 806 7.72%45 CVA & precerebral occlusion w infarct 8,517 776 9.11%

14,241 2,603 18.28%

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Top 15 APR-DRG Categories and Associated Charges at Readmission (Second Hospitalization) FY2012

Source: HSCRC Inpatient Discharge Database, includes of All-Cause 30-Day Same Hospital Readmissions, Maryland ARR Program All-Payer

Total # of Readmiss

ions

% of Total Readmissi

onsTotal Charges

Average Charge for Readmis-

sionAPR DR APR- DRG Description194 Heart failure720 Septicemia & disseminated infections 3,158 4.77% $65,310,559 $20,681140 Chronic obstructive pulmonary disease 1,890 2.85% $19,418,704 $10,274460 Renal failure 1,662 2.51% $19,829,881 $11,931721 Post-operative, post-traumatic, other 1,523 2.30% $23,211,081 $15,240693 Chemotherapy 1,522 2.30% $24,880,072 $16,347139 Other pneumonia 1,439 2.17% $16,460,543 $11,439201 Cardiac arrhythmia & conduction 1,118 1.69% $9,357,535 $8,370753 Bipolar disorders 1,107 1.67% $10,413,603 $9,407463 Kidney & urinary tract infections 1,088 1.64% $9,869,457 $9,071133 Pulmonary edema & respiratory failure 988 1.49% $16,296,090 $16,494254 Other digestive system diagnoses 962 1.45% $9,616,338 $9,996750 Schizophrenia 921 1.39% $10,798,642 $11,725383 Cellulitis & other bacterial skin infections 889 1.34% $8,652,227 $9,733861 Signs, symptoms & other factors 889 1.34% $6,197,267 $6,971

3,251 4.91% $36,610,401 $11,261

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Summary of the Interventions: Categories

• Risk screen patients and tailor care• Establish communication with PCP and home care• Use “teach back” or other methods to educate

patient, family, and/or caregivers• Use multidisciplinary clinical teams to coordinate patient care• Discuss end-of-life treatment wishes• Comprehensive discharge planning• Schedule and prepare follow up appointment(s)• Help patient manage medications• Facilitate discharge to nursing homes with detailed instructions

and partnerships • Conduct patient home visit• Conduct telephone follow up

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Hospitals are Implementing a Range of Metrics

• Quantification that the hospital has implemented the intervention– Percent of patients provided

detailed instructions at discharge– Percent of patients provided post-

discharge primary care services– Percent of patients receiving

discharge medication reconciliation

– Number of patients logged into a daily monitoring software

• Often these will be percentages or counts

• Assessment of the impact of the intervention– Changing rate of readmissions from

each long-term care facility in the service area

– Comparing patients’ post-discharge service utilization patterns for those provided additional services (phone calls, SNF visits, home visits, etc.) with patients not receiving additional services:

• Readmission rate 30 days post discharge

• Use of other services (ED and OBS) for 30 days post discharge

Exam

ples

Exam

ples

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TPR

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Total Patient Revenue Program

• Population Based Rate method offered to 10 rural hospitals• Establishes an annual global budget for facility (all inpatient and

outpatient facility revenue) independent of volume• Strong incentives to control unnecessary admissions, readmissions

and shift care to less-costly outpatient settings• Consistent with these hospitals’ mission to service the health

needs of a “community”• Platform for inclusion of physician and non-hospital services • Voluntary 3-year arrangements; transitional funding offered

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Garret Co.

W. Maryland HS

Meritus MC.

Carroll Co.

Union of Cecil

Chester River

Mem. Easton

Dochester

McCready

Calvert $118m

TPR Hospitals

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Percent Revenue with ARR and TPR Arrangements in Fy2011

Percent Revenue by Payment Types Inpatient Outpatient TotalUnder ARR Agreements* 83% 0% 54%Under TPR Agreements 9% 12% 10%Not Under ARR or TPR Agreements 8% 88% 36%

*Includes all inpatient revenue for ARR hospitals.

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Annual Changes in Utilization with TPR

Inpatient AdmissionsBefore TPR(FY2010)

First Year of TPR (FY2011) Difference

TPR 3.1% -2.0% -5.1%

Non-TPR -1.9% -4.1% -2.2%

Outpatient VisitsBefore TPR (FY2010)

First Year of TPR (FY2011) Difference

TPR 1.7% 34.6% 32.9%

Non-TPR 1.9% 1.8% -0.1%Source: HSCRC Inpatient Discharge Database

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Future Plans

• Expanding to inter-hospital readmissions• Reporting and monitoring development• Medicare waiver modernization

– Gain sharing with other providers– Bundled payments– Population-based rates

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Near-Term Future Goal:Tracking Readmissions Across Hospitals• Chesapeake Regional Information System for Our

Patients (CRISP) is Maryland’s state designated Health Information Exchange (HIE)

• CRISP creates a master patient index (MPI) for each unique patient using a probabilistic matching algorithm

• All acute care hospitals established connectivity with CRISP by December 1, 2011

• HSCRC is testing with CRISP to monitor readmissions across hospitals