New Reimbursement Models in a Value-Based World

Transcription

1 New Reimbursement Models in a Value-Based World Deborah Walker Keegan, PhD Medical Practice Dimensions, Inc. 1

2 About Deborah Walker Keegan National healthcare consultant and keynote speaker Recognized leader in physician-hospital integration, physician compensation, billing, and operations More than 25 years of experience as a health care consultant and medical practice executive PhD from The Peter F. Drucker Graduate School of Management; MBA from UCLA; ACMPE Fellow Co-author/author of 6 best-selling books, numerous articles, and presentations to over 150,000 physicians, leaders, administrators, and staff Co-author of The Physician Billing Process, deborahwalkerkeegan@msn.com TEL:

3 Payment Reform Health Plans Pay for Value 3

4 High-Deductible Health Plans 2013: 49% of Non-Government Plans are HDHP HDHP / HSA Million Million 15% Average Annual Growth Rate Bronze Exchange Plan - $5,000 Source: AHIP Center for Policy & Research, July Annual census of America s Health Insurance Plans. Data as of January

5 High-Deductible Health Plans Employer Premium Patient Premium Sick Visit Plan Pays Sick Visit Patient Pays Before $5,000 $1,000 $65 $35 Patient Payment $1,035 Today $2,000 $2,000 $0 $100 $2,100 5

6 High Deductible Plans Time-of- Service Patient Cycle Credit Card on File (CCOF) 6

7 Time-of-Service Payments Copayment Level 1 Basic Copayment Balance Level 2 Typical Practice Copayment, Balance, Pre-payment, Coinsurance, Unmet Deductible Level 3 Best Practice 7

8 Patient Collections Cycle Statement 1 Statement 2 Statement 3 Letter 1 Letter 2 Phone Call 1 9 Months! Letter 75 Days! Statement 2 1 Payment Statement 1 8

9 Risk Modeling Differentiate by Collectability Low 2 Statements 1 Letter 0 Phone Calls Moderate 2 Statements 1 Letter 1 Phone Call High 2 Statements 1 Letter 1-3 Phone Calls 9

10 Credit Card on File (CCOF) Secure Swipe/Hold/Charge Payment gateway to authorize and securely store data Written patient consent to charge credit/debit card up to a $ limit Courtesy call if charge is greater than $ limit Charge within 48 hours after insurance has paid May also use for payment plans, refunds 10

11 Benefits of CCOF No patient statements Minimal patient collections follow-up No collection agency/fees Less bad debt No patient surprises Streamlined check-in/check-out Streamlined financial reconciliation Speed up revenue!!! 11

12 What s in Your A/R? Deborah has a $5,000 deductible plan Deborah Paid? Allowable Payer Paid? Self Pay Deductible Copay A/R > 90 days DRO Bad Debt 12

13 Patient Credit Scores FICO will no longer weigh medical debts on credit reports as heavily as it did when calculating credit scores It will also ignore any collections that have already been paid We found that for someone where medical collections is their only derogatory, it is not as negative as a regular unpaid collection would be. So we adjusted the algorithm. Source: The New York Times. Credit Scores Could Rise with FICO s New Model. August 7,

14 Payment Reform Health Plans Pay for Value 14

15 Physician Payment Reform National Commission Report For both Medicare and private insurers, annual updates should be increased for E&M codes Updates for procedure codes should be frozen for a period of 3 years Higher payment for facility based services that can be performed in a lower-cost setting should be eliminated Source: Report date March

16 Physician Payment Reform National Commission Report Transition from FFS in next 5 years -Payers should eliminate stand-alone FFS -Transition to payment for quality and value -Continue to re-calibrate FFS to encourage quality and cost-effectiveness and penalize misuse or overuse of care Source: Report date March

17 Pay for Value Pay for Structures & Systems Electronic health records Incentives Pay for Care Collaboration Shared savings Bundled pay FFS Plus Payment PCMH-PMPM Case rate Pay for Quality Pay-for-performance Warranties 17

18 Government ACO Initiatives 1 CMS Medicare Shared Savings Shared Savings Program Program (MSSP) Physicians & hospitals align in defined ways One track and two track options for shared savings 338 MSSP ACOs 4.9M beneficiaries 99% Track 1 shared savings only, not shared risk 114 that started in 2012: $128M in savings in Year 1 Source: CMS Fast Facts All Medicare Shared Savings Programs and Medicare Pioneer ACOs, May

19 Government ACO Initiatives 2 Center for Innovation Pioneer ACO Advanced organizations Higher shared savings in years 1-2; populationbased payment in year 3 Pioneer ACO 28 MSSP ACOs 28% dropped out year 1 700,000 beneficiaries 23 Pioneer ACOs saved Medicare Trust Fund $147M in Year 1 Outcomes-based contracts with other payers in Year 2 Source: CMS Fast Facts All Medicare Shared Savings Programs and Medicare Pioneer ACOs, May

20 Government ACO Initiatives 3 Center for CMMI Innovation Advance Payment ACO Physicianbased ACOs Advance Payment ACO 36 ACOs Advance payment for infrastructure; recoup via savings Source: CMS Fast Facts All Medicare Shared Savings Programs and Medicare Pioneer ACOs, May

21 Government ACO Initiatives Fee-for-service reimbursement Shared savings if exceed threshold Will reach a point of diminishing returns Intended as a bridge toward risk arrangements Potential for shared savings helps to drive hospital-physician engagement 21

22 Medicare Value 22 Year erx PQRS EHR Value- Based Modifier Total % % % % % % % -1.0% -1.0% -3.5% % -2.0% -2.0% -6.0% % -3.0% -2.0% -7.0% % up to -5% -2.0% up to -9% % up to -5% -2.0% up to -9% ^Only groups with 100+ eligible professionals in 2015; applies to all physicians in

23 Meaningful Use: Stage 2 17 Core Measures Medicare Value 3 Menu Measures 9 MU CQMs CQM: clinical quality measure Meaningful Use PQRS 2014 Measures Domains Report each measure for at least 50% of the Medicare Part B FFS patients seen during the reporting period to which the measure applies. 23

24 Bundled Payment Acute Care Episode (ACE) Demonstration year demonstration Part A and B services from date of admission to date of discharge; Ortho/CV Shared savings payment with patient ** ($1,100) ** Bundled Payments for Care Improvement (BPCI) Four models Reportedly 6,500 candidates Retrospective: FFS payments subject to reconciliation to pre-determined target price for defined episode of care Prospective: Bundled payment to admitting hospital See: 24

25 Bundled Payment Model 1 Model 2 Model 3 Model 4 Episode All acute patients, all DRGs Selected DRGs, hospital plus post-acute period Selected DRGs, post-acute period only Selected DRGs, hospital plus readmissions Services Included in Bundle All Part A paid as part of the MS- DRG payment All nonhospice Part A and B services during initial inpatient stay, post-acute period, readmissions All non-hospice Part A and B services during post-acute period and readmissions All non-hospice Part A and B services during initial inpatient stay and readmissions Payment Retrospective Retrospective Retrospective Prospective See: 25

26 Current State Bundled Payments for Care Improvement (BPCI) 48 episodes-of-care to select Orthopedic Surgery -Major joint upper extremity -Major joint replacement lower extremity -Amputation -Fractures femur and hip/pelvis -Medical non-infectious orthopedic -Double joint replacement of the lower extremity -Revision of hip/knee -Spinal fusion -Hip and femur procedures except major joint -Other knee procedure -Back and neck except spinal fusion -Lower extremity and humerus procedure except hip, foot, femur -Removal of orthopedic devices See: 26

27 Current State Bundled Payments for Care Improvement (BPCI) Cardiology/CV Surgery -Stroke -Coronary artery bypass graft -Percutaneous coronary intervention -Pacemaker -Cardiac defibrillator -Congestive heart failure -Acute myocardial infarction -Cardiac arrhythmia -Cardiac valve -Major cardiovascular, vascular -Chest pain Gastroenterology - Gastrointestinal hemorrhage; GI obstruction - Major bowel - Esophagitis, gastroenteritis and other digestive disorders See: 27

28 Current State Bundled Payments for Care Improvement (BPCI) Other -Urinary track infection -Chronic obstructive pulmonary disease, bronchitis/asthma -Sepsis -Diabetes -Simple pneumonia and respiratory infections; Other respiratory -Medical peripheral vascular disorders -Atherosclerosis -Syncope and collapse -Renal failure -Nutritional and metabolic disorders -Cellulitis -Red blood cell disorders -Transient ischemia See: 28

29 Bundled Care Landscape Beyond Pilot Status Medicare BPCI Results 3 States: Arkansas/Ohio/Tenn Beyond Ortho/CV Surgery UnitedHealthcare: Oncology pilot 34% reduction in costs FFS claims likely to continue near-term/ retrospective reconciliation Payment method vs funds distribution Data Sources: Booz & Company. Bundled Care: The Opportunities and Challenges for Providers, 2013 (30% and 51% citation); UnitedHealthcare: 7/14/

30 Hospital Value Hospital Value-Based Purchasing (HVBP) Effective 10/1/2012 Two performance domains: Clinical and Patient Experience Differential payment funded via reduction in DRG Hospital Acquired Conditions Expansion (HACE) Effective FY 2015, Medicare & Medicaid 1% penalty for high HAC Hospital Readmission Reduction Program (HRRP) Acute myocardial infarction, heart failure, pneumonia Effective 10/12 1% penalty in FY2013; 2% in FY2014; 3% FY

31 No Payment for Errors Serious Reportable Events (29) Surgery on wrong site or wrong patient Wrong surgery on patient Unintended retention of foreign object in patient Intraoperative or immediate postoperative death in an ASA (American Society of Anesthesiologists) Class 1 patient (normal, healthy patient) Death or serious injury due to contaminated drugs, devices, biologics Maternal or neonatal death or serious injury associated with labor or delivery in low-risk pregnancy while in healthcare setting See: 31

32 Payer Strategies Narrow Networks/Steering Purchasing M/M Lives Value Contracts BIG DATA 32

33 Payer Strategies - Acquisition WellPoint Humana United Health Cigna CareMore 26 Centers CA, AZ, NV 50K MA Pts Concentra 310 Med Centers in 40 States Monarch 2,300 MDs California Health- Spring MA Carrier 12 States $800M $790M N/R $3.8B Source: WSJ The Future of U.S. Health Care 12/12/11. B1. 33

34 Payer Strategies Narrow Networks State of Connecticut 2,250 physicians dropped from UHC MA plans, 19% of insurer s physician network Per UHC: Based on quality, panel size, and cost We are notifying affected UH members and are taking steps to help them transition to new providers Source: 10/9/

35 Payer Strategies - Steerage BXBS NC Blue Select - Specialty-based tiering Tier 1 or Tier 2 designation (practice level); Tier 2 is higher out-of-pocket costs for patients (copay; coinsurance) Quality Potentially avoidable morbidity QI Registry Efficiency Episodes of care Indirect standardiz. Efficiency Index Quality: Potentially avoidable complications: colonoscopy; GERD Registry: AGA Digestive Health Outcomes; GI QI Consortium 35

36 Payer Strategies Steerage Indirect Standardization By episodic treatment groups (ETGs) (Example 37-GI) Peer average cost for ETG X Practice volume = Practice expected cost; difference is efficiency ratio ETG Severity Volume Peer Avg Cost Practice Expected Cost Practice Actual Cost IBD $3,524 $352,400 $300, $6,541 $65,410 $70, $11,074 $11,074 $20,000 Total $428,884 $390,000 Efficiency Ratio.91 Source: BXBS NC Blue Select; Specialist Scoring Methodology, Appendix B 36

37 Payer Strategies - Blue Plans PMPM Coordination SHARED SAVINGS Quality and efficiency SHARED SAVINGS TOTAL COST OF CARE QUALITY INCENTIVES PCMH ACO $65 Billion Directed to value-based care Narrow Networks Tier 1 or Tier 2 Source: July 9,

38 Payer Strategies - Value PCMH FFS + PMPM Bundled Pay Prospective Payment Or FFS + Retrospective Budget Adjustment Coordination Case Management Fee ACO Risk Contracts FFS + Shared Savings FFS + Retrospective Budget Reconciliation 38

39 Employer Strategies Self-funded health plans Direct contracting with Centers of Excellence - No out-of-pocket costs for patients - All costs covered: Care, travel, lodging, living expenses for patient and caregiver - Medical tourism in the U.S. Source: Modern Healthcare, 10/8/2013; The Pacific Business Group on Health s Negotiating Alliance is the organization that will oversee the Employers Center of Excellence Network 39

40 Employer Strategies: Steerage Health System Employer Service Virginia Mason Mayo, Scott & White Geisinger Mercy Walmart Cardiac, spine UCSF CalPERS Various Hoag, Newport Beach Kroger Ortho Black Hills Surgical Hospital South Dakota State employees Lower back Johns Hopkins PepsiCo Cardiac, ortho Source: FierceHealthcare; Advisory Board, LA Times, CalPERS, J Healthcare Contracting As reported by Booz & Company 40

41 Emerging Services & Billing Impact Telemedicine: $1.9 B in 2018 Telehealth start-ups: Example: Doctor on Demand Video visit for $40 On-line marketplace: Examples: MD Save - Bundled Rate Medibid - Online bids 41

42 Revenue Stratification FFS Bundled Case Incentives P4P Patient PMPM Shared Savings 42

43 Stratify Each Revenue Stream Case Rate $3 PMPM X $1,000 EHR MU Terms Revenue Cost Impact $12,000 yr X 30 physicians PQRS $50,000 potential Bundled pay Ortho hip/knee $10,000 X 100 $36,000 $55,000 ($19,000) $360,000 $500,000 ($140,000) $10,000 earned ($40,000) $1,000,000 $900,000 $100,000 43

44 Questions and Answers Reminder: Attendees of the live webinar will receive a follow-up by September 19 th with: Webinar recording & handouts Webinar CEU certificate To ensure delivery of this , please add marketing@navicure.com to your safe-sender list.