Healthcare Financial Management Association

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Nov 10, 2013 (3 years and 8 months ago)

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Healthcare Financial Management

Association



Bundled Services Contracting


(A trip down memory lane!)


April 20, 2012


A Little Bit of History



Old days in Maryland (
Circa 1
990’s)

-
Lot of Cardiac

-
Lot of Orthopedic (knee/hip)

-
Transplant

-
Lot of other risk



Some More History




Outside Maryland

-
Has been out there a long time

-
DRG (sort of) since 1982

-
Case rates, per diems

-
All types of risk!

What’s Happening In Maryland Today?




A little bit of this, and a little bit of that


Some Cardiac


Some Orthopedic


Transplant



Current players


Hopkins


MedStar


UMMC




Why Do We Do It?




Required by our friends, the payers



Competitive advantage



It’s the
future! (?)


SO
-

What Do You Need To Think About?


Physician alignment



Ability to replicate consistent results/outcomes



Operations



What to bundle



Pricing


Physician Alignment


CRITICAL
!


Buy in, cooperation, input
-

CRITICAL
!








Ongoing data/feedback
-

CRITICAL
!


Consistent Results


Outcomes



Length
-
of
-
stay



Readmissions



Etc.



Evidence
-
based medicine


Nasty Old Operations!


Contracting participating providers


Who?


Surgeons, Anesthesia, Pathology, PT…


Hospital


Home health

(More on this later)


LOA/contracts:
$
’s (limited $’s) and rules

Nasty Old Operations!


Contract compliance


Rules of the road


Authorizations


Patient ID/notification


Registration (who is paying claims?)


Case Management


Nasty Old Operations!


Billing


Are you the payer?


How do you get/process the claims?


Monitoring what’s in and what’s out



Collecting


Tracking AR



Reimbursement


If you are the payer, how do you do that?


If you are not the payer, how do you do that?

More Things To Think About



Exception reporting (ProvenCare
®
)



Contract performance



Regulatory reporting (Maryland)



Financial accounting


Two Approaches



You are the payer


Claims in and out


Reimbursements in and out


What services are in and out


Build it or rent it


Rely upon the payer


Claims go direct


Rely on payer to bundle


Things you must do


Pricing


Reporting


Negotiate rates: payers and providers


What to Bundle?



Surgical/interventional procedures most common


-
Cardiac (surgery/interventional cardiology)


-
Orthopedic (joint/spine)


-

Bariatric


Inpatient or Outpatient


Things you can predict!


Can do medical cases too


You get the idea






Pricing
-

Things To Consider



Volumes


Hi
-
cost items (Implants, Drugs, Etc.)


New technology


Catastrophic cases


What services are included (scope of service)?

-
Pre, Post, how far out?

-
Cost = Physician + Hospital + ?????

(more on this soon)

Excellent Resource




Center for Healthcare Quality & Payment Reform



Transitioning to Episode
-
based Payment

http://www.chqpr.org/downloads/TransitioningtoEpisodes.pdf

PCP

Surgeon

Other Specialist

PCP

Surgeon

Other Specialist

PCP

Surgeon

Other Specialist

PCP

Surgeon

Other Specialist

Imaging

Imaging
Implant, etc.

Imaging

Imaging

Drugs

Drugs

Drugs

Drugs

HOSPITAL
STAFF

HOME CARE

PCP CARE MGR

HOSPITAL
STAFF



HOSPITAL

DRG

REHAB FACILITY

LONG
-
TERM CARE


HOSPITAL
DRG

Potential Elements of an Episode Payment for Major Acute Care,

Including Components Already Paid on an Episode/Case Rate Basis

Length of Time





PHYSICIANS


DEVICES

DRUGS

NON
-
MD
STAFF

FACILITY

Provider
and
Services




Reference:

Center for HealthCare Quality & Payment Reform.

Http://www.chapr.org/


Pre
-
Admission

Hospitalization

Post
-
Acute Care

Readmission

Pricing


Identify sample population


DRG


CPT/ICD procedure code


Like patients


Pull data by phase of care


Understand variation


Identify carve outs, exclusions, bill aboves


Don’t forget
-

physician, home health,…..




Regulatory Approval


In Maryland hospitals can participate in bundled contracts



HSCRC oversight



Need a legal entity to contract



Hospitals must file Alternative Rate Application
-

Must receive
HSCRC approval!



Ongoing Regulatory Reporting/Renewals


Moving Ahead to the Past?


ACO



Bundled pricing



???

Thank you!

Questions ?

Mike Wertz

Senior Director Payer Relations & Contracting

Telephone 410
-
328
-
1723

Email:
mwertz@umm.edu


22

4/20/2012


Matt Orth

Director Managed Care Analytics

MedStar Health

410
-
772
-
6825

matt.orth@medstar.net


Medicare Bundling Initiative

Healthcare Financial Management

Association


23


More formally known as:

CMS Center for Medicare and
Medicaid Innovation


Bundled Payments for Care
Improvement Initiative


aka


CMMI BPCI


24

What’s in a Bundle?


Model One
-

Inpatient facility only


Model Two


All inpatient services plus xx days post
-
discharge; everything except Part D drugs and hospice


Model Three


Post
-
acute discharge services only
(defined by acute hospital discharge MSDRG)


Model Four


All inpatient services acute stay only
(includes 30 days post
-
discharge acute readmissions)

25

Model One
-

Percentage discount from IPPS MSDRG
payment


Models Two & Three


All claims/payment per usual
Medicare processes/rates; retroactive reconciliation to
target rate (based on discounted 2009 Medicare
payments)


Model Four


True case
-
rate payment to hospital which
then pays physicians



How to Pay a Bundle

26

We got a boatload of data from CMS






27



Data from CMS




Hospital Referral Clusters


Patient residence zip



Includes ALL Medicare claims paid for these
beneficiaries at all providers for 2008 and 2009



Multiple Files (Hospital, physician, IRF, SNF,
HHA, DME…)




Don’t try this at home….


28

Data Issues



The longer the episode, the less the data




Home Health Billing…oops




DME…oops




Scrambled Physician data…. OP data, oops




Clean data…oops



29

Let’s price this Bundle…..



30

The fine print…..

I’ve listed the major categories we need to address. After a brief summary, the bullet points indicate questions on the appl
ica
tion that
apply to

his section and a
very brief recap

of the specific task . Most of these are common to all Models 2
-
4; variations are indicated.

Provider Network Building

We have to identify the providers we need and contract with them, establish procedures, etc.


Describe communications to providers (B9, B10)


How to involve providers with QA/QI Committees (D15 Mod2&3; D13 Mod4)


Care Redesign/case management

We are expected to redesign care in order to achieve the quality and financial outcomes.


Redesign of aspects of care; specific steps, readiness (B11
-
B13)


Ongoing assessment/care improvement during program (B14)


How to get providers involved in care redesign (B10)


How to involve beneficiaries in care redesign (B11)


How will this reduce costs (eg process, forumularies, standardized purchasing, discharge protocols) (C5,C6)


How will this improve quality/pt experience (D1)

Finance

We have to define the episodes and come up with a target rate reduction (or bundled case rate for Model 4). We can propose a

ri
sk
adjuster, but need a qualitative justification. F

or Models 2&3 the logistics are all retrospective, since claims are submitted and paid normally, and reconciled after the fac
t w
ith the target
reduction. For Model 4 it’s a true case

rate that we would distro to the hospital and physicians.


Risk adjuster? (C3)


Describe arrangements (E2)


Logistics of distributing gains (E3)

Gainsharing (B15
-
20)

We need to design and describe how we’re going to share the financial gains (and losses?) with the providers. For Model 2&3
tha
t will
involve a retrospective adjustment since c

laims are submitted and paid normally, then reconciled with the target reduction after the fact. CMS expects quality measur
es
to play a
role in this as well as financial performance.


Logistics of distributing gains (E3)


Describe prior experience with gain
-
sharing, P4P (B16)


Quality standards for gainsharing (B17
-
B19)


Eligibility requirements [quality thresholds, QI requirements] for participating in gainsharing (B20, Mod2&3)


Limit gainsharing to no more than 50% of Medicare payment (B19)

Finance

We have to define the episodes and come up with a target rate reduction (or bundled case rate for Model 4). We can propose a

ri
sk
adjuster, but need a qualitative justification. F

or Models 2&3 the logistics are all retrospective, since claims are submitted and paid normally, and reconciled after the fac
t w
ith the target
reduction. For Model 4 it’s a true case

rate that we would distro to the hospital and physicians.


Risk adjuster? (C3)


Describe arrangements (E2)


Logistics of distributing gains (E3)

Gainsharing (B15
-
20)

We need to design and describe how we’re going to share the financial gains (and losses?) with the providers. For Model 2&3
tha
t will
involve a retrospective adjustment since c

laims are submitted and paid normally, then reconciled with the target reduction after the fact. CMS expects quality measur
es
to play a
role in this as well as financial performance.


Logistics of distributing gains (E3)


Describe prior experience with gain
-
sharing, P4P (B16)


Quality standards for gainsharing (B17
-
B19)


Eligibility requirements [quality thresholds, QI requirements] for participating in gainsharing (B20, Mod2&3)


Limit gainsharing to no more than 50% of Medicare payment (B19)

31

But seriously… some details



MSDRG definition


Exclusions


Families


How to identify?




Beneficiary Choice




Readmissions (related? Part B?)





32

More details



Redesign clinical processes



Metrics


Outcomes


Quality



Provider Network


Contracts


Gainsharing
/incentives



33

And more details




Involvement of providers




Education/involvement of beneficiaries




Financial Opportunity


Inpatient or post
-
discharge?




34

Our very good friends at CMS



Hospital/Physician Relationships/Contracting




Changing the rules




Where are the rules?




Dates








March 15



May 16



June 28



Starts?




Program Length





Got Help?


35

We’re

in Maryland, why do we care?




HSCRC has promised to do something similar




How’s that waiver thing doing?




Is bundling the future?




36

Trouble Sleeping?



http://www.innovations.cms.gov/initiatives/bundle
d
-
payments/index.html


http://cmmi.airprojects.org/bpci.aspx


http://www.resdac.org/PaymentBundlingInitiative.
asp


37

Thanks for sticking around after lunch

Matt Orth

Director Managed Care Analytics

MedStar Health

410
-
772
-
6825

matt.orth@medstar.net