Value Based Purchasing

Transcription

1 Value Based Purchasing Cary Sennett, MD, PhD Fellow, Economic Studies Brookings Institution Mini Summit on Payment Reform Trends October 27, 2011

2 Why? CBO projects inexorable rise in federal spending Health care is driving It s not about health care (anymore): it s the economy Source: 2011 CBO Long-Term Budget Outlook 2

3 National Strategy for High Value Health Care High Value Health Care Payment Reform Insurance Reform Delivery System Reform 3

4 National Strategy redux Insurance Reform Payment Reform Delivery System Reform Value Based Purchasing 4

5 Accountable Care Organizations Elliott Fisher, MD, MPH: the term ACO describes the development of partnerships between hospitals and physicians to coordinate and deliver efficient care. Wiki: An ACO is a type of payment and delivery reform model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers form an ACO, which then provides care to a group of patients. NCQA: ACOs are provider based organizations that take responsibility for meeting the health care needs of a defined population with the goal of simultaneously improving health, improving patient experience and reducing per capita costs. ACA: a shared savings program...that promotes accountability for a patient population and coordinates items and services under Parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery. 5

6 ACO: Essential Constructs Prepared to accept, and capable of accepting, accountability for clinical, patient experience, and financial outcomes Provider based; typically hospitals and physicians (at least) By intent, should enable better coordination and integration of care across providers/sites of care In a very real way, a legal construct, intended to permit hospitals and physicians to collaborate in ways that do not violate Stark and anti kickback laws 6

7 ACOs The Landscape Demonstration projects and pilots Physician Group Practice (PGP) demonstration Medicare Health Care Quality (MHQC) demonstration: 646 Medicare Shared Savings Program (MSSP) Draft regulations (NPRM) promulgated April 2011 Final regulations released last week NOT a pilot or demonstration Pioneer Innovation Center pilot an alternative to MSSP Likely to attract organizations at the frontier May be the first of several alternatives from CMMI Private Sector Brookings Dartmouth pilots Premier pilots/implementation group 7

8 MSSP: Structural Requirements Core requirement is participation of at least 5000 FFS Medicare beneficiaries Significant flexibility with respect to structure/ governance The vast majority of ACOs are expected to include hospitals; it is likely many will be hospital centric 8

9 Assignment of Individuals to the ACO Two step process: Beneficiary assigned to provider (PCP, specialist, or non MD clinician) Then assigned to ACO by virtue of provider participation Assignment based on plurality of E/M services, measured in dollars Assigned to PCP; if no PCP visits, then via other provider Preliminary prospective assignment with quarterly reconciliation 9

10 Quality measurement and reporting Thirty three quality measures In 4 domains Patient/caregiver experience Care coordination/patient safety Preventive health At risk populations Survey (CAHPS), claims, and (new) GPRO tool Year 1 requirement: complete and accurate reporting Subsequent years: measures progressively scored Achieve threshold: 1.0 points Achieve maximum: 2.0 points Domain score is average of all measures in domain Quality score is average of four domains Thresholds are 30% or 30 th percentile (some all or none measures) 10

11 Shared Savings Two shared savings models Track 1: one sided risk, savings share up to 50%, variable MSR, maximum share 10% of benchmark Track 2: two sided risk, savings share up to 60%, fixed MSR, maximum share 15% of benchmark (maximum loss 5% 10%) Three year agreement period; Track 1 an option in first agreement period only 11

12 Shared Savings Shared savings if (and only if): Savings exceed Minimum Savings Rate (MSR) Quality Thresholds are met Year 1: complete and accurate reporting (of 33 quality measures) Year 2: 25 (of 33) measures scored Year 3: 32 (of 33) measures scored Must meet thresholds both within and across domains 12

13 Calculating savings (and losses) CMS calculates baseline for four subgroups (ESRD, disabled, duals, and elderly) based on Part A/B costs for individuals who would have been assigned to the ACO in prior 3 years Each of those three years actual costs are inflated to year 0 using national growth rate, HCC risk adjuster Weighted (10%, 30%, 60%) sum=aco baseline Contract year target (benchmark) is baseline incremented by national absolute growth amount for FFS Medicare Savings (losses) are difference between actual expenses (for attributed beneficiaries) and incremented baseline 13

14 Calculating ACO s Share Based on savings Based on sharing rate One sided model, 50% Two sided model, 60% Savings (or loss) rate adjusted by quality score Quality score=1 in year 1, multiplier (0 to 1) in subsequent years Theoretical max is 10%/15% of benchmark 14

15 Other Issues CMS has significant reporting obligation To assist ACOs to manage the populations for which they are accountable Beneficiaries, however, can opt out of data sharing CMS will administer CAHPS in 2012 and 2013 CMMI Advanced Payment Initiative 15

16 How Pioneer is Different Innovation Center pilot competitive application and limited number of slots Much is NOT different Structural requirements/governance Quality reporting requirements Higher risk (and must be two sided); transition to population based payments in year 3 Minimum 15,000 beneficiaries (and prospective assignment is an option) 16

17 ACOs: Bottom Lines Final MSSP rule addresses many of the concerns raised in response to NPRM More flexible governance and structural requirements Significantly fewer quality performance measures Potentially greater financial rewards One sided risk option Revised beneficiary assignment approach Advance Payment Model to support upfront investment Unclear whether risk premium in two sided option is sufficient Pioneer program will not be the last CMMI valuebased payment initiative Innovation will continue in the private sector 17

18 On the Horizon 18

19 Summary Pressure to increase the value of care continues to intensify Effective response will require movement on multiple fronts Value Based Purchasing strategies that purchasers can use to drive delivery system reform are an essential component of that Alignment of public sector initiatives around ACOs, but on other fronts as well will be important to rapid and effective change 19

20 More at