Navigating Through Oceans of Data: - Being Part of and Competing in the ACO & Bundled Payment Reforms! Presenter: John Sheridan, MHSA, FACHE Navigating the Perils of Care Transition New Jersey Long Term Care Leadership Coalition 2014 Annual Conference
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Navigating Oceans of Data - Being Part of and Competing in the ACO & Bundled Payment Reforms!
Bundled Payment BPCI and Accountable Care Organizations are changing the paradigm for payment and delivery of post acute care. This change creates episode of care programs. The presentation reviews how New Jersey is affected by BPCI and ACOs.
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Navigating Through Oceans of Data: - Being Part of and Competing in the ACO & Bundled Payment Reforms!
Presenter: John Sheridan, MHSA, FACHE
Navigating the Perils of Care TransitionNew Jersey Long Term Care Leadership Coalition2014 Annual Conference
Why must we face and know Data?Or The Question that is the “Elephant in the room.”
“Are we appropriately Doctored”? / Are we well served?
• "the great American medical guilt trip“› We spend far more on health care for allegedly worse health
outcomes, including higher mortality, compared to other countries. › This is an apples-to-oranges comparison of vastly different
geographies, social structures and cultures. After subtracting homicides and automobile fatalities, the mortality discrepancies largely disappear. We cannot cure homicide and automobile fatalities once they have happened
• Medicine, like life [or “Big Data”], inevitably consists of messiness, error, tedium, unresolvable dilemmas and contradictory trade-offs. › Book Review: 'Doctored' by Sandeep Jauhar By THOMAS P. STOSSEL, MD – Wall Street Journal Aug. 25, 2014
Age Cohort Male Percent Female Percent Total PercentAged 65-69 years 157,657 13.4% 186,199 15.9% 343,856 29.3%Aged 70-74 years 117,110 10.0% 145,561 12.4% 262,671 22.4%Aged 75-79 years 91,187 7.8% 127,166 10.8% 218,353 18.6%Aged 80-84 years 67,175 5.7% 109,136 9.3% 176,311 15.0%Aged 85 years and over 51,853 4.4% 119,980 10.2% 171,833 14.6%
Total 484,982 41.3% 688,042 58.7% 1,173,024 100.0%
Population of New Jersey - estimate 2009 - Age 65 and Over
Whose care can “we” influence with Bundles and ACOs?
Measure New JerseyNJ
PercentUSA
USA Percent
Acute Care Medicare Adm/1000 312 215Acute Care Medicare People Served 201664 6174844
Medicare A Days/1000 1889 1597
NJ Persons over age 65 1,082,587 3.2% of USA 34,126,305New Jersey Medicare A Beneficiaries 646,359 59.7% 28,720,205 84.2%NJ Estimated Medicare Advantage Beneficiaries 436,228 40.3% 5,406,100 15.8%
Estimated Medicare Acute Care Days 1,220,972 45,866,167
2012
To be in a Bundle Payment Care Improvement Program or an ACO,Beneficiaries must Medicare A & B
What is a Bundled Payment for Care Improvement (BPCI) Bundle?
• Episode-based payment aggregates Medicare payments to multiple providers and suppliers for services that are related to particular clinical conditions for a period of time (time defines episode length)
• Episode-based payments measure patient experience of care, process, outcomes, and cost of care
• The goals of BPCI are: › align payment incentives among providers & suppliers › improve the health care experience of Medicare
beneficiaries who undergo episodes of treatment for clinical conditions
What are the Bundled Episodes – Models 2-3-4?1 Acute myocardial infarction 25 Major bowel 2 Amputation 26 Major cardiovascular procedure 3 Atherosclerosis 27 Major joint replacement of the lower extremity 4 Automatic implantable cardiac defibrillator generator or lead 28 Major joint upper extremity 5 Back and neck except spinal fusion 29 Medical non-infectious orthopedic 6 Cardiac arrhythmia 30 Medical peripheral vascular disorders 7 Cardiac defibrillator 31 Nutritional and metabolic disorders 8 Cardiac valve 32 Other knee procedures 9 Cellulitis 33 Other respiratory
10 Cervical spinal fusion 34 Other vascular surgery 11 Chest pain 35 Pacemaker 12 Chronic obstructive pulmonary disease, bronchitis/asthmae 36 Pacemaker Device replacement or revision 13 Combined anterior posterior spinal fusion 37 Percutaneous coronary intervention 14 Complex non-Cervical spinal fusion 38 Red blood cell disorders 15 Congestive heart failure 39 Removal of orthopedic devices 16 Coronary artery bypass graft surgery 40 Renal failure 17 Diabetes 41 Revision of the hip or knee 18 Double joint replacement of the lower extremity 42 Sepsis 19 Esophagitis, gastroenteritis and other digestive disorders 43 Simple pneumonia and respiratory infections 20 Fractures femur and hip/pelvis 44 Spinal fusion (non-Cervical) 21 Gastrointestinal hemorrhage 45 Stroke 22 Gastrointestinal obstruction 46 Syncope and collapse23 Hip and femur procedures except major joint 47 Transient ischemia 24 Lower extremity and humerus procedure except hip, foot, femur 48 Urinary tract infection
Examples of the Model 2-3-4 Bundled DRGs in Episodes
48 Episode Categories which Bundle 179 MS-DRGs
Major joint replacement of the lower extremity 469 Major joint replacement or reattachment of lower extremity with major complication or comorbidity470 Major joint replacement or reattachment of lower extremity without major complication or comorbidity
Diabetes 637 Diabetes with major complication or comorbidity638 Diabetes with complication or comorbidity639 Diabetes without complication or comorbidity or major complication or comorbidity
Congestive heart failure 291 Heart failure and shock with major complication or comorbidity292 Heart failure and shock with complication or comorbidity293 Heart failure and shock without complication or comorbidity or major complication or comorbidity
Episode NameMS-DRG
91 of the DRGs are in the TOP 100 2012 Medicare DRGs Paid
• 35 New Jersey Hospitals with bundled payment programs• 20 are Phase I – No Risk • 28 have Phase II with Risk Sharing• 1 Model 4 program (Cooper Medical Center)
• Discounts are not of Medicare FFS, they are of the target cost prior to reconciliation of BPCI program
Count of Hospitals Particpating at the Bundled Discount Level 95% 96.75% 97% 98% TotalPhase I - No Risk Share 0 0 1 19 20Phase II - Risk Share 14 1 4 9 28
Hospitals Participating at Discount Level 14 1 5 21
• Risk Tracks, for each episode.› Awardee may opt to bear risk up to the 75th, 95th, or 99th percentile. Awardees
bear 100 percent of the risk up to the risk track threshold and 20 percent of payments above the threshold for a given risk track.
› Risk tracks may be changed quarterly.
• Medicare pays the Awardee the difference between the target price and the actual cost of care for an episode if the actual cost is less than the target price.
• If the actual cost of care exceeds the target price, the Awardee pays Medicare the difference between the target price and actual spending.
• Supporting Awardee preparation, CMS provides Phase 1 participants with monthly beneficiary-level claims data for episodes of care. › Phase 1 participants also engage in a variety of learning activities › Phase 1 and Phase 2 participants and receive target pricing information to
inform their assessment of opportunities under BPCI.
Bundled Payment Care Initiative Summary-1Model Summary Model 1 Model 2 Model 3 - LTC-PAC Model 4
Examples of organizations that may participate in Model:
• Acute care hospitals
• Acute care hospitals• Health systems• Physician hospital organizations• Physician group practices• Conveners of health care providers
• Skilled nursing facilities• Inpatient rehabilitation facilities• Long-term care hospitals• Home health agencies• Physician group practices• Conveners of health care providers• Health systems
• Acute care hospitals• Health systems• Physician hospital organizations• Conveners of acute care hospitals
Entities that can initiate episodes in Model:
• Acute care hospitals• Acute care hospitals• Physician group practices
• Skilled nursing facilities (SNF) • Inpatient rehabilitation facilities (IRF) • Long-term care hospitals (LTCH) • Home health agencies (HHA) • Physician group practices (PGP)
• Acute care hospitals paid under the Inpatient Prospective Payment System (IPPS)
• Receives inpatient hospital care at an Episode Initiator
• The beneficiary is admitted to or initiates services with an Episode Initiator within 30 days after the beneficiary has been discharged from an acute care hospital for an MS-DRG included in a clinical episode associated with the Episode Initiator.
• Receives inpatient hospital care at an Episode Initiator, and on the day of admission, has either one lifetime reserve day or one day of utilization that is also a day of entitlement remaining
Start of episode:• Acute care hospital admission by Episode Initiator for ALL DRGs
• Acute care hospital admission by Episode Initiator for included clinical conditions (identified via MS-DRG)
• Post-acute care with an Episode Initiator (SNF, LTCH, IRF, or HHA) within 30 days after discharge from an acute care hospital for an MS-DRG included in a clinical episode associated with the Episode Initiator. In the case of a PGP Episode Initiator, post-acute care by any SNF, IRF, LTCH, or HHA within 30 days after discharge from an acute care hospital for an MS-DRG included in a clinical episode associated with the PGP Episode Initiator where any physician member of the PGP was the operating or admitting physician for the inpatient stay.
• Acute care hospital admission by Episode Initiator for included clinicalconditions (identified via anchor MS-DRG).
• The beneficiary is eligible for Part A and enrolled in Part B.• The beneficiary must not have End Stage Renal Disease• The beneficiary must not be enrolled in any managed care plan (for example, Medicare Advantage, Health Care Prepayment Plans, cost-based health maintenance organizations). • The beneficiary must not be covered under United Mine Workers; and Medicare must be the primary payerCriteria for
beneficiaryinclusion in episode:
• Receives inpatient hospital care at an Episode Initiator• includes most Medicare fee-for-service discharges for the participating hospitals
Bundled Payment Care Initiative Summary-2Model Summary Model 1 Model 2 Model 3 - LTC-PAC Model 4
End of episode: Discharge• 30, 60, or 90 days after acute care hospital discharge
• 30, 60, or 90 days after the initiation of the episode
• 30 days after acute care hospital discharge for anchor MS-DRG (following discharge, only related readmissions are included in the episode for the 30 day period)
Types of services included inBundle, which include broad clinical episode categories:
Inpatient Hospital Services
• Physicians’ services• Inpatient hospital services• Inpatient hospital readmission services• Long term care hospital services (LTCH)• Inpatient rehabilitation facility services (IRF)• Skilled nursing facility services (SNF)• Home health agency services (HHA)• Hospital outpatient services• Independent outpatient therapy services• Clinical laboratory services• Durable medical equipment• Part B drugs
• Physicians’ services• Inpatient post-acute care services• Inpatient hospital readmission services• Long term care hospital services• Inpatient rehabilitation facility services• Skilled nursing facility services• Home health agency services• Clinical laboratory services• Durable medical equipment• Part B drugs
IPPS MS-DRGs• Single prospectively determined bundled payment
5% provided to Medicare
• 2% discount for episodes 90 days in length 3% discount for episodes of 90 days
Reconciliation:
hospitals and physicians will be permitted to share savings arising from the providers’ care redesign efforts.
• Medicare pays a predetermined bundled payment amount to the Episode Initiator, which is responsible for paying physicians and non-physician practitioners that furnished services to the beneficiary during the episode.
• Medicare pays the Awardee the difference between the target price and the actual cost of care for an episode if the actual cost of care is less than the target price. If the actual cost of care exceeds the target price, the Awardee pays Medicare the difference between the target price and actual spending.
• 3% discount for episodes of 30 or 60 days in lengthDiscount
provided toMedicare:
• 3% discount for episodes that do not include MS-DRGs included in the ACE Demonstration• 3.25% discount for episodes that include MS-DRGs that were included in the ACE Demonstration
New Jersey Acute and Post Acute Expenditures (2012) [3 days prior to index Admission + 30 days PAC]
Total Costs per Period Reported % Calculated*Day 1-3 Prior to Adm $66,205,522 1.3% $66,205,522Index Admission $2,563,702,946 51.2% $2,563,702,946Days 1-30 post Index AdmissionLong Term Care
New Jersey ACOsACO Legal or Name/Doing Business As ACO Service Area ACO Website Address
Advocare Walgreens Well Network New Jersey Allegiance ACO New Jersey, Pennsylvania http://www.allegiancehealthgroup.comAtlantic ACO New Jersey, Pennsylvania http://www.atlanticaco.orgAtlantiCare Health Solutions, Inc. New Jersey http://www.atlanticare.orgBarnabas Health ACO-North, LLC New Jersey http://www.barnabashealthaconorth.orgCentral Jersey ACO LLC New Jersey http://www.centraljerseyaco.orgDelaware Valley ACO New Jersey, Pennsylvania http://www.jeffersonhealth.org/aco-pa/Hackensack Physician-Hospital Alliance ACO, LLC New Jersey, New York http://www.hackensackumc.org/our-services/medical-services/aco/about-us/HNMC Hospital/Physician ACO, LLC New Jersey JFK Population Health Company, LLC New Jersey http://www.jfkaco.orgLHS Health Network, LLC New Jersey, Pennsylvania http://www.lourdesnet.org/acoMeridian Accountable Care Organization, LLC New Jersey http://www.meridianhealth.comNEPA ACO Company, LLC New Jersey NJ Physicians ACO New Jersey Optimus Healthcare Partners, LLC New Jersey http://www.optimushealthcarepartners.comPartners In Care ACO, Inc. New Jersey http://www.partnersincareACO.comRWJ Partners LLC New Jersey Summit Health-Virtua, Inc. New Jersey http://www.virtua.orgNJ MSSP ACOs 18
NJ Medicaid ACO ApplicantsCamden Coalition of Healthcare ProvidersCoastal Healthcare Coalition, Inc.Healthy Greater Newark ACONew Brunswick Health PartnersPassaic County Comprehensive Accountable Care Organization, Inc.The Healthy Cumberland Initiative, Inc.The Healthy Gloucester Initiative, Inc.Trenton Health TeamNJ Medicaid ACOs - Start 2015 8
• Based on where services are received› Chosen ACO = Primary Care Services From ACO Physicians (FP, IM, GP, Geriatrics) And/or (PA, NP, Clinical Nurse Specialist or Non PCP physician)
› Beneficiary Cost 3 yrs. risk adjusted for health status & demographic factors Year 1 = 10%, Year 2 = 30%, Year 3 = 60% - trend forward
– (Yr. 1 = $10K, Yr. 2 = $11K, Yr. 3 = $12K ) = $11.5K X Trend X discount – Claims exceeding a threshold are excluded– Medicare saves twice?
• ACO providers are paid Fee For Service• Payments are made by Medicare when claims are received• Providers participating in an ACO may share risk according
to their provider agreements• No Risk ACO =
› Savings capped 10% of total Benchmarked Expenditures• Risk Share determination
› Share – ACO meets Minimum Savings Rate (MSR) & quality standard goals Risk Sharing ACO = Savings capped at 15% of Benchmark / Losses 5% Yr. 1, 7.5%
Yr. 2 and 10% YR. 3 (We are expected to get better in each succeeding year)
What happened with the Sharp Health Care (SHC) ACO?
• SHC holds a one third percentage interest in Sharp ACO. • For 2012 and 2013, Sharp ACO’s performance was under a defined 2% and 1.9%
minimum threshold, respectively, so no shared savings payments were earned and no increased cost payments were due.
• SHC re-evaluated participation for the year ended December 31, 2014 (“Performance Year 3”), Sharp ACO determined it was at risk for a significant shared loss, despite meaningful reductions in readmission rates and hospital and skilled nursing utilization.
• In June 2014, Sharp ACO determined it would not continue in the Pioneer ACO Program for Performance Year 3 and notified CMMI of its decision on June 20, 2014.
• Bundles / ACOs –› CMMI or the Center for Medicare and Medicaid
Innovations is a data driven enterprise of Clinical Informaticists who seek to drive costs down, improve satisfaction and improve quality for beneficiaries.
• Data is the currency for CMMI and for Bundlers and ACO explorers
• Pursuit of Sustainable Care› Affordable Care Act Moved CMS from payer to policy maker CMS Actuary simulation predicts Medicare rates 1/3 those of private pay and ½ of
Medicaid in 75 years
› Therefore / ACOs (420+ ACOs serving 5.0 to 7.0+ Million Beneficiaries) – Savings so far estimated at $1.00 per Beneficiary/Yr.
• Deficit Reduction Act 2005 › Bundled payments› Person centered episodes – 4 models – just getting started.› CMS using Hospital Value Based Payment (HVBP) to “bundle”
In the end Critical Thinking, Judgment and Action….
• Recent financial and business events show all too plainly what can happen when rich data and analytics collide with gaps in knowledge or lapses in judgment.
…So…› Leaders need to ensure that their processes and human
capabilities keep pace with the computing firepower and information they import.
› To overcome the insight deficit, Big Data—no matter how comprehensive or well analyzed—needs to be complemented by Big Judgment.
Good Data Won't Guarantee Good Decisions by Shvetank Shah, Andrew Horne, and Jaime Capellá - Harvard Business Review, April 2012
• Every enterprise needs to fully understand health care event data› what it is, what is does, what it means – and the potential
of data-driven decisions at each part of the episode• Waiting for someone else to generate the data will only delay
the inevitable and make it even more difficult to prevent financial loss
• Once you start tackling all the health data from the episode care processes, you’ll learn what you don’t know, and you’ll be inspired to take steps to resolve any problems.
• You can use the insights gathered at each step along the way to start improving your stakeholder engagement strategies;
CMS Mandated to Change Health SystemsAKA – “New Navigation Principles”• Hospital Value Based Payment (HVBP)
› Withhold of all Hospital Med A Revenue› Withhold return earned by Benchmark Performance and
Improvements› Person Centered Episode cost efficiency (PCE)
• PLUS:› Creating bundled care payment for episodes› Continuing financial penalties for readmissions› Continuing Person Centered Medical Homes (PCMH)› Reform of Medicare as insurance
Combined Social / Clinical CCD document data stored in data analytics warehouse for analysis, reporting, and wider HIE interchange. Elder Care services from HIEs utilized to leverage similar social data for seniors already available from hundreds of shared care sites