prospective payment system: mr. atkinson program review and evaluation health budgets and financial...
TRANSCRIPT
Prospective Payment System:
Mr. Atkinson
Program Review and Evaluation
Health Budgets and Financial Policy
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Overview Background PPS Future Next Steps/Issues for consideration
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Why Prospective Payment System?
Justify Budget Base Budgets on Outputs, not Inputs
Provide incentives for good health care practices
Rational Distribution of Funds Fund Business Plans Place Accountability for Care at MTF Quantify deviations from plan
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How is PPS related to Business Plans?
Currently Outputs from Business Plans used for initial allocation
Inpatient Relative Weighted Products (RWPs) Mental Health Bed Days
Outpatient Relative Value Units (RVUs)
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Prospective Payment Budgeting Valuing Business Plans
Value of MTF business plans Fee for Service rate for workload produced
Rates based on price at which care can be purchased CMAC rates Not MTF costs
Computed at MTF level but allocated to services Rolled up to Services
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PPS – Where are we PPS applied in FY05 to initial allocation
Based on Business Plans 25% Blend with traditional Budget
PPS applied at mid-year review Based on most recent 12 months of actuals 25% Blend with traditional Budget
PPS FY06 allocation implications determined Based on recent Business Plans 50% blend with traditional budget
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FY05 Mid Year Summary
Adjusment Plan Mid Year TotalArmy 30.6 8.4 Navy 2.2 4.1 Air Force (2.5) (4.4) Total 30.3 8.1
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Tracking FY06by MTF
FY03 and FY06 Plan Earnings are color coded with Green representing Rolling 12 >= 03/plan, yellow within 2% below, and Red >2% below.Rolling 12 month is current through 12th month of FY05 for inpatient, and 2nd month of FY06 for outpatientPPS Reconcilliation FFS onlyService DMIS Name FY03 Rolling 12 FY06 Plan FY03 Rolling 12 FY06 Plan FY03 Rolling 12 FY06 PlanF XXXX Base X 269,956 292,429 298,021 1,338 1,199 1,010 59 16 52
RVUs RWPs Mental Health Days
FY03 Rolling 12 FY06 Plan30,493,409 31,823,027 30,572,631
PPS Earnings
PPS Reconcilliation FFS onlyService DMIS Name FY03 Rolling 12 FY06 Plan FY03 Rolling 12 FY06 Plan FY03 Rolling 12 FY06 PlanA XXXX Base Y 378,661 384,093 465,650 2,110 2,538 2,616 48 47 56
RVUs RWPs Mental Health Days
FY03 Rolling 12 FY06 Plan44,616,404 49,318,766 55,632,511
PPS Earnings
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FY06 Mid Year Summary
Adjustment Rolling 12 PlanArmy 2.5 15.4 Navy (2.9) 17.3 Air Force (20.0) (16.4) Total (20.4) 16.3
Millions
FY03 Rolling 12 FY06 Plan FY03 Rolling 12 FY06 Plan FY03 Rolling 12 FY06 PlanArmy 11,314,329 10,691,909 11,254,054 100,014 104,162 103,821 34,067 31,460 35,566 Navy 7,533,511 7,136,237 7,805,835 60,141 61,866 65,238 18,344 21,156 21,526 Air Force 6,128,494 5,828,010 5,838,810 41,701 35,943 37,251 7,314 5,543 6,933 MHS 24,976,334 23,656,157 24,898,699 201,857 201,971 206,311 59,725 58,159 64,025
RVUs RWPs Mental Health Days
FY03 Rolling 12 FY06 Plan1,758,372,703 1,765,694,158 1,804,527,896 1,159,347,466 1,146,734,054 1,235,781,846
895,200,801 819,226,108 832,718,545 3,812,920,969 3,731,654,320 3,873,028,287
PPS Earnings
FY03 and FY06 Plan Earnings are color coded with Green representing Rolling 12 >= 03/plan, yellow within 2% below, and Red >2% below.Rolling 12 month is current through 2nd month of FY06 for inpatient, and 6th month of FY06 for outpatient
Future of PPS
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Why Expand PPS? Currently PPS only covers portion of MHS budget No value for Ancillary/Pharmacy Non-Industry Standard capture of workload in the MHS No value for Dental Care No value for Indirect Readiness Costs No value for Non-Benefit (“Readiness”) related functions Payment method rewards churn and earn behavior No distinction for outcomes/health management
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Ancillary/Pharmacy Ancillary
Where are we now Ancillary data in MDR Ancillary tables in M2
How approach Review data Apply weight Determine payment method
Pharmacy PDTS data available Ingredient Cost most likely will be used Fill Rate still needs to be determined
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Non-Industry Standard Workload Capture
Inpatient/Outpatient vs. Institutional/Professional Industry Based Workload Alignment (IBWA)
Rounds capture 2yrs old (appx 40% complete) Full Inpatient professional workload capture began this
year Facility component of ambulatory capture dependent
on Enhanced SADR Full RVU
Work RVU Practice RVU Malpractice RVU
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Dental/Other Benefit Dental
Starting to collect data in central systems Need to review data for consistency across Services Weights likely from CMS/ADA Payments still need to be determined
Other Benefits HCPCs Data? Payment?
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Non-Benefit Functions Education and Training
Workload/Performance measures unknown Data collection does not exist Cost vs. Payment must be determined
Indirect Readiness Similar to Indirect Medical Education Multiple method reviews to date with no success
Other reviews continuing on AD provider/population/patient
Direct Readiness Focus on DHP funding only Some related to enhanced medical care – Military unique RVU Other related to currently undefined/collected functions
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Prospective Payment Structure Based on Fee for Service
Benefits Pay for services provided not resources consumed Resources tied to workload
Concerns Rewards additional workload No incentive for utilization/disease management No incentive for prevention FFS does not necessarily capture entire value of non-
provider work
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Prospective Payment Structure Based on Enrolled Population
Utilization Incentive/Penalty Financial Bonus linked to trend in utilization
MTFs keep some of savings generated by decreased utilization Similar to Managed Care Support Contract
MTF partially at risk for utilization trend Adjusted for demographics
Capitation Value per enrollee
MTF at risk for entire health care costs Adjusted for demographics/health risk
Concerns Catastrophic Cases Small Enrolled Population
Both provide incentive for utilization management where Return on Investment (ROI) is near-term
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Prospective Payment Structure Based on Outcomes
Paying for Quality Financial incentives for outcomes, not just outputs Possible quality measures
ORYX – (JCAHO) AHRQ – (HHS)
Inpatient Quality Indicators Prevention Quality Indicators
HEDIS – (NCQA)
Potential for long-term investments in prevention/disease management
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PPS Roadmap
Inpatient
Outpatient
Ancillary
Data
Weights
Rates
PharmacyData
Rates
DirectReadiness/
Other
Data Weights Rates
Workload
Institutional
Professional
RiskAdjusters
ReinsurancePlan
MinimumEnrollment
HEDIS
SatisfactionORYX
Institutional
Professional
OtherBenefit
(HCPCs)
DataWeights
Rates
IndirectReadiness/
OtherData
Weights
Rates
Capitation Performance
DentalData
Weights
Rates
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PPS Roadmap
Inpatient
Outpatient
Ancillary
Data
Weights
Rates
PharmacyData
Rates
DirectReadiness/
Other
Data Weights Rates
Workload
Institutional
Professional
RiskAdjusters
ReinsurancePlan
MinimumEnrollment
HEDIS
SatisfactionORYX
Institutional
Professional
OtherBenefit
(HCPCs)
DataWeights
Rates
IndirectReadiness/
OtherData
Weights
Rates
Capitation Performance
DentalData
Weights
Rates
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Next StepsProspective Payment
Monitor FY06 performance against plan Apply to future budgets
FY07 - 75% FY08 - 100%
Incorporate Ancillary, Pharmacy data Ancillary data now being collected Analyze during FY06, apply in FY07 (scorecard only) Concern about standardization and unbundling
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Issues to Consider Non Provider specialty codes
Last year workload accepted is FY06 Future years no workload credit
Incorporate Inpatient Professional Services Professional services should be coding this year
Initial focus External partnerships and circuit riders Need to expand to all inpatient care
Begin with adjusting RWP rate down for rounds Approximately 40% complete (60% lost value) Began 1 Oct 2002
Accurate coding Need to ensure coding matches documentation Eventually audit adjustments to claims Timely data submission
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Questions/Discussion
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Valuing Business PlansFee for Service Rates (FY06)
Value per RWP - $6,491 Average amount allowed
Including institutional and professional fees Excluding MH/SA Adjusted for local Wage index
Value per Mental Health Bed day - $541 Average amount allowed
Including institutional and professional fees Adjusted for local Wage index
Value per RVU - $79 Average amount allowed
Segmented by Specialty Excluding Ancillary, Home Health, Facility Charges Adjusted for local Wage index
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Valuation Issues Capitation versus Fee for Service
Fee for Service initially; moving to Capitation Indirect Medical Education Adjustment
Use same methodology used for 3rd party collect OCONUS MTFs
Not part of PPS, but being score carded in FY06 Remote MTFs
Part of PPS Keesler not funded under PPS for FY06
Related to impact of hurricane, modified cost basis
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Capitation Risk Adjustment:Predicting Costs for Each Person with Each Model
Age & Sex information
Disease categoriescreated by each model
ACGCDPSCRGDCG
Identical regression
method
Predictedcosts
15,000+ ICD-9
Diagnoses
ProceduresProvider Type
Dates of Service(just for CRGs)
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Capitation Risk Adjustment: Costs and Predictive Ratios by Disease
All risk models predict cohort costs much better than age/sex
Disease Cohort N
Mean Cost
Predictive Ratios
Age/
SexACG CDPS CRG DCG
Diabetes 12,112 $6,513 0.52 0.97 0.97 0.97 0.97
Asthma 21,752 $3,184 0.54 0.99 0.99 0.86 0.97
Renal (CRF)
467 $25,038 0.13 0.82 0.87 0.75 0.81
PTSD 1,138 $6,005 0.36 0.86 0.83 0.80 0.83
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Pharmacy
Ancillary
Prof/Inst
Mission Essential
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Validate DataDevelop RatesBusiness Plan
Applied to BPShadowBudget
Data CollectionDC ProceduresStudy
Capitation
Capitation ResultsDevelop Cap ProposalAdjust Budgets (20%/50%)
Performance
Indirect
Develop ContractSite Visits/ Develop Codes
Timeline for Elements of PBP & PPS