Healthcare Financial Management Association - md aaham by hcj

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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 1990’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
                                         Potential Elements of an Episode Payment for Major Acute Care,
                                        Including Components Already Paid on an Episode/Case Rate Basis

                                                              Length of Time

                        Pre-Admission                   Hospitalization                   Post-Acute Care



                                                                                                              Readmission

                              PCP                            PCP                           PCP                   PCP
           PHYSICIANS
                            Surgeon                        Surgeon                       Surgeon               Surgeon
                         Other Specialist               Other Specialist              Other Specialist      Other Specialist


                              Imaging                       Imaging                       Imaging               Imaging
            DEVICES
                                                          Implant, etc.
Provider
and                           Drugs                          Drugs                         Drugs                 Drugs
Services     DRUGS


                                                           HOSPITAL                     HOME CARE              HOSPITAL
           NON-MD                                           STAFF                      PCP CARE MGR             STAFF
            STAFF

                                                    HOSPITAL                          REHAB FACILITY          HOSPITAL
            FACILITY
                                                  DRG                                LONG-TERM CARE         DRG

                                   Reference:
                                   Center for HealthCare Quality & Payment Reform.
                                   Http://www.chapr.org/
                     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
 Healthcare Financial Management
           Association


Medicare Bundling Initiative
                4/20/2012


                  Matt Orth
      Director Managed Care Analytics
               MedStar Health
                410-772-6825
           matt.orth@medstar.net



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More formally known as:
 CMS Center for Medicare and
    Medicaid Innovation

 Bundled Payments for Care
   Improvement Initiative
             aka


          CMMI BPCI




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       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)




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           How to Pay a Bundle

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




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We got a boatload of data from CMS




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                 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….



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                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




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Let’s price this Bundle…..




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                                                    The fine print…..
I’ve listed the major categories we need to address. After a brief summary, the bullet points indicate questions on the application that
apply to
his section and a very brief recap of the specific task .
Provider Network Building
                                                           Most of these are common to all Models 2-4; variations are indicated.

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 risk
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 fact with 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 that 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 measures 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 risk
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 fact with 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 that 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 measures 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)




                                                                                                                                             30
      But seriously… some details
• MSDRG definition
  •Exclusions
  •Families
  •How to identify?

• Beneficiary Choice
• Readmissions (related? Part B?)



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              More details
• Redesign clinical processes
•Metrics
  •Outcomes
  •Quality

•Provider Network
  •Contracts
  •Gainsharing/incentives



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             And more details
• Involvement of providers
• Education/involvement of beneficiaries
• Financial Opportunity
  •Inpatient or post-discharge?




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           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?


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 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?




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             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




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Thanks for sticking around after lunch


                  Matt Orth
      Director Managed Care Analytics
               MedStar Health
                410-772-6825
           matt.orth@medstar.net




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