When the Dust Settles-What s Next?
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1 When the Dust Settles-What s Next? AMA IPPS Conference Robert Nesse M.D. Senior Director of Payment Reform Mayo Clinic nesse.robert@mayo.edu
2 What is Driving the Change in Healthcare? Common Belief: The Affordable Care act and new Accountable Care Organizations.
3 Risk Spectrum VBP Provider- Sponsored Health Plan Government Payer Commercial Payer Employers Government (MAP) Commercial (Fully Insured) Employer (Large Group TPA) MACRA (MIPS) Bundles (BPCI) Bundles APM: Medicare ACO ACO (TCOC Risk Sharing) ACO: Accountable Care Organization BPCI: Bundle Payments for Care Improvement MIPS: Merit-based Incentive Payment System TPA: Third Party Administration VBP: Value Based Payment
4 Value & Value Based Payment Value Based Payment models reward good outcomes that meet performance targets for cost They transfer risk to providers or offer shared savings if the performance goal is met They assign responsibility for a population of patients to a provider or payer group and reimburse based on total cost of care targets
5 Moving Toward ACOs & Value Based Payment The number of ACO-covered lives is projected to increase to 105 million by 2020 Mayo Clinic is excluded from most ACOs and narrow networks, including: The 800+ United ACOs including Nexus ACO to appeal to employers The ~300 Aetna ACOs, Reference: Q1 2016, Leavitt Partners.
6 Payer mergers, acquisitions, and recent joint ventures Deal Archetype State of Domicile Buyer Target Washington Acquisition Consideration $1,800M+ Health Plans Acquiring Health Plans Pennsylvania $100M Montana $18M Wisconsin Equity Transfer Health Systems Acquiring Health Systems (incl. health plan assets) Ohio Wisconsin $250M (30% stake) No Consideration Wisconsin $363M Health Plans Acquiring Health Systems Minnesota No consideration Texas $2,000M Illinois $645M Health Systems acquiring Health Plans Minnesota No consideration Washington $24M
7 The Pre-requisites of Value Based Payment: Attribution, Risk Adjustment, Performance Measures and Network Adequacy
8 The Fundamentals for Success in Value Based Payment Patient Attribution Patient Risk Adjustment Performance Measures and Benchmarking Network Adequacy
9 The Fundamentals for Success in Value Based Payment Patient Attribution Patient Risk Adjustment Performance Measures and Benchmarking Network Adequacy
10 Attribution Challenges for Multi-Specialty Referral Practices Ongoing care vs. episodic care vs. complex care for serious illness Ongoing care: long term patient relationship with goal of better health (primary care, population health) Episodic care: short term patient relationship to Provide recommendations for therapeutic approaches (consultation) Resolve an acute or chronic problem through a specific procedure (therapeutic intervention by a specialist) Complex care: medium to long term patient relationship to provide coordinated care for a major illness care is available only in select facilities
11 Hospital Discharges for Major Joint Replacement Does SE Minnesota Really have the highest Rate of MJRs in America? CMS.Gov 6/2015
12 Patient Attribution Model Comparison Adjusted knee joint replacement rate/1,000 HVHC/TDI 2016
13 Total Cost of Care for Community Patients Mayo Clinic Rochester. MN Community Measures Annual Report Measure Number of attributed patients 13,709 10,233 9,212 % attributed out of total unique pts 3.5% 2.8% 2.2% Total cost before truncation ($100K) $301.9 M $218.3 M $218.9 M Total cost after truncation ($100K) $217.5 M $152.9 M $148.7 M Risk score Risk adjusted per patient per month (PPPM) $ $ $ Total cost index (TCI)
14 Primary Care and Referral Care 2013 Data Panel Status No. Patients Indexed Total Cost Mayo Rochester Primary Care Health Plans Paneled 60, Unpaneled 5, Paneled 572 3, Unpaneled 212 3, UNPANELED PATIENTS HAVE SUBSTANTIALLY MORE SURGERIES, CLINIC VISITS TO GENERAL INTERNAL MEDICINE (COORDINATING PROVIDERS FOR REFERRAL PATIENTS) AND OTHER NON-PRIMARY CARE PROVIDER VISITS THEY ALSO HAVE AN EXTREMELY LOW INCIDENCE OF VISITS TO A PRIMARY CARE PROVIDER
15 The Fundamentals for Success in Value Based Payment Patient Attribution Patient Risk Adjustment Performance Measures and Benchmarking Network Adequacy
16 Patient Risk Score and Medicare Bonus or Penalty= Reconciliation Payment Ellimoottil, C. Health Affairs 35:
17 Key Findings of the MN Dept. of Health Quality Reporting Risk Adjustment Assessment (annotated by REN) There is a growing body of evidence that suggests patient characteristics or socio-demographic factors also need to be considered more effectively when measuring the quality of care that doctors and clinics provide to patients. Yet, we lack evidence on which factors are the most relevant and how large the impact of patient characteristics is on quality measure outcomes. MDH s current risk adjustment methodology does not appear to cause financial harm to providers This is in part because our risk-adjusted measures are currently used only in one pay-for-performance program. Providers are concerned that potential improvements to the MDH risk adjustment approach would not apply to the broader market because of a lack of a uniform approach to risk adjustment in the state. Comparing the performance of clinics that see similar patients by clustering like clinics together can potentially aid in making more meaningful and fair comparisons. MN Dept. of Health, Health Economics Program 3/2017
18 The Fundamentals for Success in Value Based Payment Patient Attribution Patient Risk Adjustment Performance Measures and Benchmarking Network Adequacy
19 Current Performance Measures and Complex Care Naessens, J. Academic Medicine 2017
20 The Fundamentals for Success in Value Based Payment Patient Attribution Patient Risk Adjustment Performance Measures and Benchmarking Network Adequacy
21 Network Adequacy Standards Quality Rarely Considered Current network adequacy standards put a premium on the number of providers in a plan s network. They rarely address whether those innetwork providers are high quality or offer expanded access. This can make it difficult for plans to develop products with smaller networks that promote access to high quality low cost providers, but limit access to poor quality high cost providers.
22 The Path to Payment Reform Adapted from Optum 2016
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