Ensuring Success in a Value-Based Health Economy:

Key Trends and Policy Initiatives Impacting Care

across CommunitiesTracey Moorhead, President and CEO, VNAA

May 18, 2016

Warning Signs:

Industry Challenges

2

Statutory & Regulatory Barriers

• Lack of Medicare coverage for long-term care services

• Downward pressure on rates

• New care delivery & payment models focus on hospitals & MDs

Industry Readiness for Transformation

• Only 100 of over 1,200 organizations in CMS BPCI program are home health agencies

• Mandatory 2016 HH VBP Pilot in 9 states with almost no prior value-based purchasing exposure

Fragmentation at all Levels

• Highly fragmented market with 11,500 Medicare certified agencies

• Numerous state and national organizations representing piecemeal segments, competing for members and advocacy voice

Key Trends

✤ Population Health Management

✤ Data as King

✤ Value trumps Volume

✤ Consolidation replaces Collaboration

✤ States lead the way

✤ Consumers take control

TREND:

Population Health Management

✤ Not a new concept. Just HOT.

✤ Increasingly integrated approaches to medical,

behavioral, public health and social services

✤ Social determinants of health

✤ Funding for social and community services

✤ Key components: Assessment, stratification,

engagement/intervention, measurement,

REPETITION

Care Across the Continuum

Well/Healthy

• Wellness

• Prevention

At Risk

• Risk Mitigation

• Promote healthy lifestyle choices

Chronic Care Management

• Prevent ED/ hospital visits

• Coordinate care across providers

Complex CareManagement• Utilize

appropriate Post-acute settings

• Coordinate care across providers

Advanced Illness

• Advanced illness care

• Palliative care

• Hospice care

Primary Care SupportPost Acute Care

CoordinationAdvanced Illness Care

Expansion

TREND:

Data as King

✤ Formerly: Data collected and used to pay claims, track

patients, approve new drugs and devices.

✤ Current and future: Data used for complex and

evolving questions around efficient, targeted, effective

care (See: PHM)

✤ Critical role of dynamic, predictive analysis

Data, Data, Data

Data Element Examples

• Clinical, functional, and social profile

• Level of patient activation

• Care plan & performance against

care plan using evidence based

guidelines

• Patient utilization across healthcare

settings

• Risk stratification to identify high risk and

rising risk patient cohorts

• Performance on population health

metrics

• Performance for specific populations, e.g., dual eligibles

• Cost per service / bundle of services

• Cost and clinical quality performance against performance-based contract targets now

and projected

• Variation in performance by site of

service/practitioner

• Patient “leakage”8

TREND:

Value trumps Volume

✤ Accelerating adoption of value-oriented payment models.

✤ Implement cost-reducing products and technologies

✤ Optimize limited FFS resources

✤ Invest for value-based health economy.

✤ Broader definition of total costs of care

✤ Care teams as the new normal

✤ Right care, right place, right time

✤ Managing the “Care Managers Conundrum”

“Quality as the Chariot to Payment”

✤ Current: “Tower of Babel” of multiple quality measure

sets in siloed delivery systems

✤ Near Term Future: Integrated, unified measures

✤ IMPACT Act for Post-Acute Care

✤ AHIP & CMS: Core measures for providers

Reimbursement Changes Drive APM

Significant Medicare FFS payment cuts

to force Alternative Payment Models

$260b

Hospital cuts

(2013-2022)

$415b

Total FFS Cuts

(2013-2022)

50% Medicare

APM Target

(2018)

Medicare Moves Aggressively Toward

Value-Based Purchasing

Target % of Medicare FFS payments

linked to quality and alternative payment

models in 2016

By the end of 2014,

CMS reported

alternative payment

models accounted

for 20% of Medicare

FFS payments to

providers.

85%

30%

90%

50%

Medicare FFSFFS linked to

Quality

Alternative Payment

Models

*Alternative Payment Models: ACOs. medical homes, bundled payments, comprehensive primary care initiative,

comprehensive ESRD, duals financial alignment FFS Model, Pioneer ACOS years 3-5

2016 2018

MACRA

• The Medicare Access and CHIP Reauthorization Act of

2015

Repeals the SGR

Charts a new course for physician payment in Part B

• MACRA creates two paths:

MIPS: “fee-for-service plus quality link” path

APM: accountable care organization or other risk-

bearing organization path

• For physicians and physician organizations, likely to be

more significant than the Affordable Care Act

SGR Replacement: MACRA

14

Year Merit-Based Incentive Payment

System (MIPS)*

Eligible Alternative Payment

Models (APMs)

2019 +/- 4% +5%

2020 +/- 5% +5%

2021 +/- 7% +5%

2022 +/- 9%

(and beyond)

+5%

(to 2024)

*Additional potential bonus for exceptional performers; MIPS bonus pool is budget neutral

Two Paths: MIPS or APMs

Path 1: Roll Up of Existing Part B

Quality Reporting into MIPS

PQRS

Value Based

Payment Modifier

Meaningful Use

MIPS

15

Existing

Medicare

Part B

Quality

Reporting

Programs

Qual

Resource

Clinical

Electronic

MIPS

Fundamental Capabilities for Success

in Value-Based Environment

Care Delivery Transformation

Change

Management

Stakeholder Engagement

Technology

Performance Management

• Managed Care structure

• Best in class care coordination

• Population health focus

• Evidence based care

• Shift from silo based

care model

• Pay for performance

and risk assumption

• Organizational

alignment

• Agility and

innovation

• Provider engagement

• Provider incentive based

compensation model

• Patient centered care model

• Integrated clinical and

financial platform

• Ability to communicate

across care continuum

• EMR optimization

• Advanced analytics

• Dashboards and

reports

• Reporting

• Manage to outcomes

• Stars Improvement

strategy

Federal Reforms Driving

Value-Based Care

The number of

individuals covered

by federal and state

programs has

increased by nearly

one third since the

passage of ACA

Value, not

volume, is the

keystone of value

based care

models.

Federal Programs Promoting Value Based Care

Shared SavingsBundled

Payments

MA Payment Reforms and

Quality Bonuses

Hospital Value Based

Purchasing

Physician Value-Based Modifier

Hospital Readmissions

Acquired Conditions

Dual Eligible Financial

Alignment Demo

Medicare Home Health Value-

Based Purchasing Demo

• All HHAs in nine states: AZ, FL, IA, MD, MA, NE, NC, TN, WA

• Only HHAs certified for less than 6 months and with fewer

than 20 cases per year exempt

Ap

plic

ab

ilit

y

• 24 measures: 6 Process / 15 Outcome / 3 New

• Better of achievement or improvement

• Comparison by state /size cohort (large/small)

Perf

orm

an

ce

Measu

rem

en

t

• Budget neutral overall

• Between 3 and 8 percent of payments at risk

• Lower-performing HHAs receive lower payments than what

would have been reimbursed under traditional FFS MedicareFin

an

cia

l

Imp

act

Medicare Home Health Value-

Based Purchasing Demo

19

Where

• Proposed States for Participation

• Arizona

• Florida

• Iowa

• Maryland

• Massachusetts

• Nebraska

• North Carolina

• Tennessee

• Washington

What

• Applies a payment reduction or increase to current Medicare-certified HHA payments depending on quality performance

• Payment adjustments applied on an annual basis beginning at 5% and increasing to 8% in later years

• Payment adjustments based on HHA total performance score

• Performance would be evaluated based on 10 process measures, 15 outcomes measures, and 4 additional new measures

The model will test whether incentives for better care can improve

outcomes in the delivery of home health services.

Care Redesign is Key to Success in

Alternative Payment Models

Reinforces

Informs

Reinforces

Informs

Reinforces

Informs

Source: Centers for Medicare and Medicaid Services (2011). Contracting for Bundled Payment. Washington, DC

Data Sharing Supports All

Activities and Exchanges

Gain and Risk

Sharing

Care

Redesign

Quality and

Performance

Measurement

TREND:

Consolidation replaces Collaboration

✤ Integrated delivery systems require:

✤ Scale/scope of services

✤ Coordinated structure

✤ High performing operations

✤ Rampant consolidation among major health care

orgs risks loss of truly independent local community

providers

✤ Ultimate Consolidation: Providers become Payers:

✤ 60% of new Medicare Advantage plans are

providers (Avalere)

Requirements for Success

Increased Scale Innovation New Role

• Enhanced ability to

compete in a

consolidating

marketplace

• Financial strength to

participate in risk

based models:

enhanced capital

resources,

reinsurance, shared

risk

• New technology and

partnerships to

expand the scope of

home care services

and provide most

value conscious care

• Build a new brand

• Become a change

agent for the evolving

financing and delivery

system

• Build partnerships to

compete with payer

organizations

Response from the Marketplace:

Mergers, Acquisitions, & Partnerships

Small, independent providers will face increasing competitive

challenges as the market morphs to pay for value.

Market

Consolidation

Vertical

Integration

Joint

Ventures• Almost Family buys

Ingenios (health

assessment provider)

• Health South Corp.

acquires Encompass

• UCSD and AccentCare form

joint venture home health

agency

Scaling up: Kindred

acquires Gentiva;

LHC Group buys

Deaconess Home

Care and Elk Valley

Health Services

TREND:

States Lead the Way

✤ States emerging as key players in health care

marketplace

✤ Public health agents, innovators, payers

✤ Increased use of state waivers to expand and

transform Medicaid

✤ SIMs/Duals/CMMI Innovation Awards have provided

capital for states to test reforms.

State Level Value Based Alternatives

Increasing demand and cost

concerns are driving a push toward

home health services as an

alternative to facility based care

2014: Home health and personal

care accounted for between 46%

and 70% of state long term care

expenditures;

2020: Home health expenditures

projected to increase by 84% over

2010 levels to $131 billion

2050: 88.9 million in over 65

population will 2/3 will need some

form of LTCSS

Money Follows the

Person

HCBS State Plan Option

Community First Choice

State Balancing Incentives Payments

Health Home for Chronic

Care

HCBS Workforce Training Grants

ACA-created initiatives for

non-institutional populations

CA: Innovation through WaiverMedi-Cal 2020

Drive towards quality: performance incentives for public hospitals for specific public health; population health; and quality outcome goals ;

Increase efficient delivery: target super users by providing care coordination, social services & supports;

Focus on coordinated primary care: global budget for care to uninsured focused on primary care and not urgent care; and

Maintain innovative services for seniors and persons with disabilities.

CO: Innovation through ACO: CO

• Accountable Care Collaborative

Established geographic/regional networks to provide coordination between providers; medical management for beneficiaries; and accountability

Coordinated care across specialties by establishing “medical homes”

Payment is a per-member-per-month and payment is tied to quality metrics in a pay-for-performance incentive structure

• Expanded Medicaid

• State-Federal partnership model for Marketplace

• Mandatory Medicaid Managed Care including HCBS

services

• Covers home health services with no copay

• Covers hospice services

• Won a 2014 CMS State Innovation Model grant

• Not pursing a DSRIP

• Not participating in the "Duals" demo

DE: Diamond State Health Plan

NY: Innovation through care networks:

• Develops coordinated networks of care with a lead

hospital + providers

Evaluated as a single entity

• Transforms delivery by requiring a 25% reduction in

preventable hospitalizations and other public

health/population health targets

• Integrates providers and community-based solutions in

networks, including home health

TREND:

Consumers take Control

✤ Increasingly Educated Price Seekers

✤ Transparency in provider quality and cost

✤ Continued rise of non-traditional providers

✤ MinuteClinic

✤ Online Communities

✤ Patient-centric reorientation of products and services.

Consumers Take Control

17mm 50mm

20142020

Number of Americans

with an HSA Account

Patient at Center of Health Care

System

Family Hospital Non-Clinical Primary Care

Post-Acute

and Home

Care

Pharmacy Insurance Lab Ancillary Sites

Consulting Physician

QUESTIONS?