show them they can’t live without you: using cost and ... them they can’t live without you:...
TRANSCRIPT
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Show Them They Can’t Live Without You:Using Cost and Utilization Data to Market to Payers
Scott Wetzler, PhD
Stacey Blase, PhD
Montefiore Medical Center
Tuesday, November 15, 2016
CMS Change Package: Primary and Secondary Drivers
Patient and Family-Centered Care Design
1.1 Patient & family engagement 1.2 Team-based relationships 1.3 Population management 1.4 Practice as a community partner1.5 Coordinated care delivery 1.6 Organized, evidence-based care1.7 Enhanced access
Continuous, Data-Driven Quality Improvement
2.1 Engaged and committed leadership 2.2 QI strategy supporting a culture of quality and safety 2.3 Transparent measurement and monitoring2.4 Optimal use of HIT
Sustainable Business Operations
3.1 Strategic use of practice revenue 3.2 Staff vitality and joy in work 3.3 Capability to analyze and document value 3.4 Efficiency of operation
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Medicare Risk Levels
Category 1:
Fee-for-service (FFS) with no link of payment to
quality
Category 2:
FFS with a link of payment to quality
Category 3:
Advanced Payment Models built on FFS architecture
Category 4:
Population-Based Payment (Full Risk)
NYS Medicaid Risk Levels
N/A Level 0: Does not count toward 80-90% state goals Level 1: Upside only arrangements, built on FFS architecture
(retrospective reconciliation)
Level 2: Up and downside arrangement, built on FFS
architecture (retrospective reconciliation)
Level 3: Per Member, Per Month (PMPM)
payments (capitation/prospective bundled
payments)
Compensation Continuum
Small % of financial risk:
Fee-for-service
Small % of financial risk: Performance-based
contracting
Moderate % of financial risk:
Case rate/ bundled/ episodic payments; Shared savings
Large % of financial risk: Shared risk
Large % of financial risk:
Capitation; Capitation plus performance based
contracting
TCPI “Phases of Transformation” (Care Transitions Network framework)
Phase 1: Setting Aims
Phase2: Establishing a Baseline
Phase 2: Establishing a Baseline
Phase 3: Benchmarking Progress
Phase 3: Benchmarking Progress
Phase 4: Sustain Change
Phase 5: Preparedness for VBP arrangements
TCPI Change Package Concepts
1.1.3 Collaborate with patients & families
1.3.3 Stratify risk
1.4.4 Use community resources
2.1.2 Develop roadmap
2.2.1 Use and organized QI approach
2.2.2 Build QI capacity
2.3.1 Use data transparently
3.1.1 Use sound business practices
1.1.2 Listen to patient & family voice
1.2.2 Clarify team roles
1.5.2 Establish medical neighborhoods
1.6.3 Implement evidence-based protocols
1.7.1 Provide 24/7 access
2.2.2 Build QI capacity
3.4.1 Streamline work
1.1.2 Listen to patient & family voice
1.1.3 Collaborate with patients and families
1.3.3 Stratify risk
1.4.4 Use community resources
1.5.2 Establish medical neighborhood roles
1.6.3 Implement evidence-based protocols
1.6.5 Reduce unnecessary tests
2.4.1 Innovate for access
3.2.3 Cultivate joy
3.3.4 Document value
3.4.1 Streamline work
3.3.3 Develop financial acumen
3.3.4 Document value
DSRIP Year
2016: Focus on Infrastructure Development > Focus
on System/Clinical Development
2017: Focus on System/Clinical Development 2018: Focus on System/Clinical Development >Focus on Project
Outcomes/
Sustainability
2019: Focus on Project Outcomes/Sustainability
President and CEO
University Behavioral Associates
Scott Wetzler, PhD
Attending Psychologist
Montefiore Medical Center
Stacey Blase, PhD
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Learning Objectives
At the end of this session, organizations will be able to:
1. Interpret financial costing and utilization data to make a case for value
2. Complete a costing exercise
3. Develop a data driven plan to market to community partners and payers
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Overview & Roadmap
1. Background on value-based purchasing models
2. Sample overall healthcare costs and intermediate steps
3. Costing demonstrations for example interventions
4. Summary on negotiating for risk contracting
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Models of Value-Based Reimbursement
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Pay for Performance
Bundled Payment
Patient Centered Medical Home
Shared Savings
Shared Risk
Full Risk
From Shared Savings toward Assuming Risk
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Options Level 0 VBP Level 1 VBP Level 2 VBP Level 3 VBP
Total Care for General Population
FFS with bonus and/or withhold based on quality scores
FFS with upside-only shared savings when quality scores are sufficient
FFS with risk sharing (upside when outcome scores sufficient; downside reduced when quality scores are high)
Global capitation (with quality-based component)
Integrated Primary Care
FFS (plus PMPM subsidy) with bonus and/or withhold based on quality scores
FFS (plus PMPM subsidy) with upside- only shared savings based on total cost of care (savings available when quality scores are sufficient)
FFS (plus PMPM subsidy) with risk sharing based on total cost of care (upside available when outcome scores sufficient; downside reduced when quality scores are high)
PMPM capitated payment for primary care services (with quality-based component)
Bundles FFS with bonus and/or withhold based on quality scores
FFS with upside-only shared savings based on bundle of care (savings available when quality scores are sufficient)
FFS with risk sharing based on bundle of care (upside available when outcome scores sufficient; downside reduced when quality scores are high)
Prospective bundled payment (with quality-based component)
Total Care for Subpopulation
FFS with bonus and/or withhold based on quality scores
FFS with upside-only shared savings based on subpopulation capitation(savings available when quality scores are sufficient)
FFS with risk sharing based on subpopulation capitation(upside available when outcome scores sufficient; downside reduced when quality scores are high)
PMPM capitated payment for Total Care for Subpopulation (with quality-based component)
Outpatient12%
Emergency1%
Inpatient19%
Other3%
Inpatient21%
Emergency1%
Clinic + Physician
6%
Other14%
Pharmacy23%
Healthcare Costs (NYC HARP, 2012)
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$28,118 per patient per year!
Behavioral HealthServices
33% TotalHealthcare Costs
Medical HealthServices
67% Total Healthcare Costs
Data book for Behavioral Health Carve-in and Health and Recovery Plans (HARPS). State of New York. January 21, 2014.
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Member Months 1,015,883 CY 2011 Member Months 991,337 CY 2012
Behavioral Health Service Group Util/1,000 PMPM % Total Behavioral Health Service Group Util/1,000 PMPM % Total
Inpatient Psych 5164 288.02$ 13% Inpatient Psych 5012 289.20$ 12%
Inpatient D&A + Detox 2548 128.51$ 6% Inpatient D&A + Detox 3017 141.24$ 6%
Emergency Room + CPEP 895 13.22$ 1% Emergency Room + CPEP 996 14.92$ 1%
Outpatient Psych 13608 156.16$ 7% Outpatient Psych 12417 139.99$ 6%
Outpatient D&A 10591 105.53$ 5% Outpatient D&A 11578 105.61$ 5%
Other 3678 72.24$ 3% Other 3471 74.80$ 3%
Behavioral Health Total 36,484 $763.68 34% Behavioral Health Total 36,491 $765.76 33%
% ENC (Behavioral Health) 13% % ENC (Behavioral Health) 22%
% FFS (Behavioral Health) 87% % FFS (Behavioral Health) 78%
Acute Care Service Group Acute Care Service Group
Inpatient Acute 3256 474.59$ 21% Inpatient Acute 3733 497.63$ 21%
Emergency Room 317 32.33$ 1% Emergency Room 415 42.43$ 2%
Ambulatory Surgery 603 17.08$ 1% Ambulatory Surgery 750 22.52$ 1%
Clinic 2784 27.86$ 1% Clinic 2807 27.52$ 1%
Primary Care 5803 40.90$ 2% Primary Care 8004 57.56$ 2%
Physician Specialist 5583 54.24$ 2% Physician Specialist 7297 76.64$ 3%
Outpatient Other 40991 268.64$ 12% Outpatient Other 47396 312.00$ 13%
Nursing Facility 2409 42.63$ 2% Nursing Facility 3578 70.12$ 3%
Pharmacy 52279 500.33$ 23% Pharmacy 59333 470.98$ 20%
Medical Health Total 114,025 1,458.60$ 66% Medical Health Total 133,313 1,577.40$ 67%
% ENC (Medical Health) 39% % ENC (Medical Health) 72%
% FFS (Medical Health) 61% % FFS (Medical Health) 28%
All Services Total $2,222.28 100% All Services Total $2,343.16 100%
% ENC (Total Healthcare) 30% % ENC (Total Healthcare) 56%
% FFS (Total Healthcare) 70% % FFS (Total Healthcare) 44%
NYC HARP NYC HARP
1367
932
38 43
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Member Months 11,220,903 CY 2011 Member Months 11,511,393 CY 2012
Behavioral Health Service Group Util/1,000 PMPM % Total Behavioral Health Service Group Util/1,000 PMPM % Total
Inpatient Psych 2.66$ 12% Inpatient Psych 3.36$ 14%
Inpatient D&A + Detox 27 1.33$ 6% Inpatient D&A + Detox 33 1.45$ 6%
Emergency Room + CPEP 28 0.39$ 2% Emergency Room + CPEP 31 0.41$ 2%
Outpatient Psych 6.00$ 27% Outpatient Psych 942 6.56$ 28%
Outpatient D&A 11.89$ 53% Outpatient D&A 1377 11.38$ 48%
Other 23 0.23$ 1% Other 28 0.31$ 1%
Behavioral Health Total 2,415 $22.50 100% Behavioral Health Total 2,454 $23.47 100%
% ENC (Behavioral Health) 27% % ENC (Behavioral Health) 36%
% FFS (Behavioral Health) 73% % FFS (Behavioral Health) 64%
NYC TANF/SN NYC TANF/SN
Member Months 1,493,578 CY 2011 Member Months 1,515,055 CY 2012
Behavioral Health Service Group Util/1,000 PMPM % Total Behavioral Health Service Group Util/1,000 PMPM % Total
Inpatient Psych 88 4.39$ 10% Inpatient Psych 84 4.24$ 10%
Inpatient D&A + Detox 25 1.20$ 3% Inpatient D&A + Detox 30 1.34$ 3%
Emergency Room + CPEP 31 0.43$ 1% Emergency Room + CPEP 33 0.45$ 1%
Outpatient Psych 1123 12.08$ 28% Outpatient Psych 1102 11.44$ 27%
Outpatient D&A 2336 24.15$ 55% Outpatient D&A 2611 22.75$ 54%
Other 105 1.43$ 3% Other 123 1.71$ 4%
Behavioral Health Total 3,708 $43.68 100% Behavioral Health Total 3,983 $41.93 100%
% ENC (Behavioral Health) 8% % ENC (Behavioral Health) 11%
% FFS (Behavioral Health) 92% % FFS (Behavioral Health) 89%
NYC SSI NYC SSI
Data book for Behavioral Health Carve-in and Health and Recovery Plans (HARPS). State of New York. January 21, 2014.
(1) Bundled Payment
Provides a single payment for all services for a specified condition that is based on the costs of adhering to clinical standards of care, risk stratification, and complication allowances
What’s in it for you?
• You benefit from savings generated by improving efficiency within episodes
• Even if you reduce the number of annual outpatient visits, limited opportunity for benefit (and concern that savings achieved might lead to poor outcomes)
• Risk of having to provide more service for each episode
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(1) Bundled Payment Example
Negotiated Payment Model
• Bundle: outpatient psychiatric care for patients with Bipolar Disorder
• Bundle Amount: $1500 annually per patient
Calculations for Savings
• Unit cost per outpatient visit = $135
• Must offer ≤ 11 visits per year to generate savings ($135*11 = $1485)
• Payment is capped provider loses money if ≥ 12 visits per year
• Decrease to 8 visits per year = $420 in savings per patient
• Relatively small amount of savings considering risk that patient might require increased outpatient care
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Financial incentives or disincentives tied to measured performance (e.g. reduction in readmissions)
• Provider receives performance-based adjustments to FFS rates, usually bonuses for exceeding benchmarks in a particular metric
• Requires ability to establish clinical quality benchmarks, and to collect, measure, and report results
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Montefiore
Montefiore
NYC
NYC
0% 10% 20% 30% 40%
<90 days
<30 days
Readmissions
(2) Pay for Performance
(2) Pay for Performance Example
Negotiated Payment Model
• Metric: decrease 30 day readmissions from 24 to 15 (based on 100 patients with Bipolar Disorder referred from psych inpatient)
• Incentive Amount: $50,000
Calculations for Savings
• Unit Cost per inpatient day = $692
• Assuming average LOS on an inpatient unit is 14 days, each admission = $9,694
• 9 saved readmissions = $87,250 savedo In P4P model, you only keep the incentive (a fraction of the savings)o Whoever is taking the risk stands to save the most money
• Achieving $50,000 incentive would be equal to 370 additional visits ($135*370=$49,950), or 3.7 additional visits per patient
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What change in utilization is needed to pay for an intervention?
Profit associated with open access will mostly be linked to quality incentives or inpatient cost savings.
Example Intervention 1: Open Access
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Cost
1 FTE Social Worker for Intake Evaluations
Annual Salary ($48,000 + 30% fringe ) $62,400
.2 FTE Psychiatrist for Medication Consults
Annual Salary ($40,000 + 30% fringe ) $52,000
Total Annual Costs $114,400
Associated Revenue
Additional Intake Evaluations
10/week @ 45 weeks/year = 450 intakes $60,750
Additional Medication Consults
7/week @ 45 weeks/year = 315 consults $47,250
Total Annual Revenue $108,000
What change in utilization is needed to pay for an intervention?
Profit associated with LAIs will mostly be linked to quality incentives or inpatient cost savings.
Example Intervention 2: LAIs
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Cost
.5 FTE Nurse for LAI Administration
Annual Salary ($35,000 + 30% fringe ) $45,500
Total Annual Costs $45,500
Associated Revenue
LAI Billing
10/week @ 45 weeks/yearLAI Administration and Education
$26,550
40/week @ 45 weeks/yearInjectable Medication Only
$23,400
Total Annual Revenue $49,950
What change in utilization is needed to pay for an intervention?
Since billing revenue may not exist, any potential profit in diabetes education would have to be associated with reductions in medical costs.
Example Intervention 3: Diabetes Education
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Cost
1 FTE Diabetes Educator
Annual Salary ($60,000 + 30% fringe ) $78,000
Total Annual Costs $78,000
Associated Revenue
None? $0
Quality Incentives as a Step toward Risk
• Pay for Performance models are intermediate steps to more advanced forms of value-based care
• Data on quality metrics, associated costs, and overall costs of care may provide basis for taking risk on a population
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Full Risk Contracting• Revenue is guaranteed, only amount of service is unknown (but
predictable)• Full-risk capitation allows provider groups to ascend the
premium stream• Providers are in the best position to determine clinical
opportunities for improving outcomes and achieving savings• Allows providers to develop a budget and clinical operations
based on known revenue
MH outpatient care only
(i.e. bundled payments)
MH inpatient and outpatient care
(i.e. quality incentives)
Total cost of care(i.e. including medical costs
and interventions)
Negotiations for Full Risk Contracting
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3 Years Weighted Baseline
Target Baseline
Performance Adjustments
Stimulus Adjustment
Target Budget
Select VBP Arrangement
Historic Claims Data
Risk Adjustment
Growth Trend
Efficiency Adjustment
Quality Adjustment
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Thank you!www.CareTransitionsNetwork.org
The project described was supported by Funding Opportunity Number CMS-1L1-15-003 from the U.S. Department of Health & Human Services, Centers for Medicare & Medicaid Services. Disclaimer: The contents provided are solely the responsibility of the authors and do not necessarily represent the official views of HHS or any of its agencies.