Advancing Risk Capability in 2015: Medicare Shared Savings Program and ACO Investment Model. March 23, 2015 // 12:00 P.M. 1:00 P.M.
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1 Advancing Risk Capability in 2015: Medicare Shared Savings Program and ACO Investment Model March 23, 2015 // 12:00 P.M. 1:00 P.M. EST
2 CENTER FOR INDUSTRY TRANSFORMATION The DHG Healthcare Center for Industry Transformation exists to provide industry leaders with intelligence to serve and advance the delivery of healthcare in the United States and across the world. The 2015 Webinar Series is a demonstration of our commitment to our clients to provide distinctive industry commentary on the most critical reform elements impacting healthcare providers in 2015 and beyond. 2
3 TODAY S PRESENTERS Kent Thompson Manager, DHG Healthcare Assists clients in the areas of financial operations, corporate compliance, revenue cycle management, ICD-10 compliance and revenue transformation More than 27 years of healthcare experience in industry and consulting A member of HFMA since 1989, Kent s involvement has been at the National and Chapter levels in a variety of leadership positions. Melinda Hancock Partner, DHG Healthcare Leads a team in developing DHG Healthcare s next generation financial modeling products and services related to a variety of revenue transformation business issues, including the transition from fee-for-service to non-ffs payment models More than 22 years of healthcare experience in the public and industry sectors A member of HFMA since 1994, Melinda s involvement has been at the National and Chapter levels in a variety of leadership positions and she is currently the National Chair-Elect Craig Anderson, Sr. Principal-in-Charge, DHG Healthcare Center for Industry Transformation Leads clients through an accelerated decision making and strategic planning process designed to solve complex business problems More than 35 years of executive experience in healthcare consulting and operations Coordinates the development of thought leadership capital as the industry transforms from fee-forservice to risk based reimbursement 3
4 SESSION GOALS AND OBJECTIVES Understand Current MSSP Structure and History IDENTIFY THE HISTORY OF THE MSSP PROGRAM AND THE CURRENT INFRASTRUCTURE. Results and Challenges to the current program OVERVIEW OF THE RELEASED RESULTS OF THE PROGRAMS TO DATE AND UNDERSTAND CHALLENGES TO THE CURRENT PROGRAM. AIM program and proposed changes to the MSSP REVIEW OF THE NEW AIM PROGRAM AND MEDICARE S PROPOSED CHANGES TO THE CURRENT MSSP. 4
5 AGENDA HISTORY MSSP FUNDAMENTALS RESULTS & CHALLENGES ACO INVESTMENT MODEL OVERVIEW AND PROPOSED CHANGES NEXT GENERATION ACO INVESTMENT MODEL 5
6 Shared Savings Program Background Shared Savings Program Web site Mandated by Section 3022 of the Affordable Care Act Established a Shared Savings Program (SSP) using Accountable Care Organizations (ACOs) Medicare Shared Savings Program must be established by January 1, 2012 Notice of proposed rulemaking issued March 31, 2011 CMS sought and received over 1,300 comments on the proposal Issued Final Rule November 2011 Source: MLN Webinar 4/8/14 6
7 Medicare Shared Savings Program NOW AN ANNUAL ENROLLMENT PROCESS ANOTHER 89 STARTED 1/1/15 GROWTH IN BENEFICIARIES 7
8 MSSP Fundamentals 8
9 Fundamentals of the MSSP Program EXPLANATION OF HOW MSSP WORKS AND ARE STRUCTURED. DESIGN ELEMENT ONE-SIDED MODEL TWO-SIDED MODEL SHARED SAVINGS PAYMENT CYCLE Sharing Rate Up to 50% based on quality performance Up to 60% based on quality performance Minimum Savings Rate (MSR) Varies by number of assigned beneficiaries 2% Shared Savings Method First dollar sharing once MSR is met or exceeded First dollar sharing once MSR is met or exceeded Maximum Sharing Cap Total shared savings payments cannot exceed 10% of benchmark Total shared savings payments cannot exceed 15% of benchmark Minimum Loss Rate None ACO repays share of all losses if expenditures are more than 2% higher than benchmark Shared Loss Rate None One minus final sharing rate applied once minimum loss rate is met; loss rate is capped at 60% Maximum Loss Cap None Losses capped at 5%, 7.5%, 10% in years 1, 2, 3, respectively Health Care Advisory Board,
10 Statutory Requirements BY STATUTE, ACOS MUST MEET THE FOLLOWING ELIGIBILITY CRITERIA: Agree to participate in the program for at least a 3-year period Have a sufficient number of primary care professionals for assignment of at least 5,000 beneficiaries Have a formal legal structure to receive and distribute payments Have a mechanism for shared governance and a leadership and management structure that includes clinical and administrative systems Shall provide information regarding the ACO professionals as the Secretary determines necessary Define Processes to: Promote evidenced-based medicine Promote patient engagement Report quality and cost measures Coordinate care Demonstrate it meets patient-centeredness criteria Source: MLN Webinar 4/8/
11 Other Shared Savings ACO participants cannot participate in multiple Medicare initiatives involving shared savings, including: Independence at Home Medical Practice Demonstration (ACA Sec. 3024) Medicare Healthcare Quality Demonstration (MMA Sec. 646)* Multi-Payer Advanced Primary Care Practice Demonstration (MAPCP)* Physician Group Practice Transition Demonstration Pioneer ACO Model demonstration Other ongoing demonstrations involving shared savings Additional programs, demonstrations or models with a shared savings component may be introduced in the Medicare program in the future *Only contracts with shared savings arrangements Source: MLN Webinar 4/8/
12 Fundamentals of the MSSP Program Relevant Fraud & Abuse Concerns Five (Overlapping) Waivers Within Shared Savings Program Stark Law: Prohibits referral to entities with which physician has a financial relationship Anti-Kickback Statue: Prohibits hospital from incentivizing physician referrals Civil Monetary Penalty: Prohibits both payment to Medicare beneficiaries to receive services and payment to physicians to limit services Pre-Participation Waiver: Applies broadly to start-up arrangements (e.g. infrastructure subsidies) by providers taking bona fide steps to join program within a target year. Participation Waiver: Broad waiver of all three regulations for ACOs during program participation and six months after. Shared Savings Distribution Waiver: Specific exception to permit unrestricted distribution of savings among participants, provided payments not used to limit medically necessary care 1. Physician Self-Referral Compliance Waiver: Specific exception for arrangements that would otherwise implicate Stark law, for organizations not needing broader waivers. Patient Incentive Waiver: Specific exception permitting ACOs to offer medically related incentives to all Medicare beneficiaries to encourage prevention and compliance. Health Care Advisory Board,
13 Fundamentals of the MSSP Program 33 Total number of quality measures 4 25% Domains of quality measures Percentage of quality score composed by each domain Patient, Caregiver Experience of Care Patient Safety/ Care Coordination At-Risk Population Preventive Health 7 Measures All based on CAHPS Scores 6 Measures EHR capabilities weighted twice as much as other categories 12 Measures Focused on diabetes, heart failure, hypertension, coronary artery disease 8 Measures Include a variety of screenings, measurements, immunizations Health Care Advisory Board,
14 Aggregate & Patient Level Data From CMS Aggregate-Level Data Individual-Level Data Initial Data Provision Quarterly Data Reports Benchmark Data Beneficiary Claims Data Provided to all ACOs at start of agreement period Based on historical beneficiaries used to calculate cost benchmark Provided to all ACOs on quarterly basis and in conjunction with annual quality/financial reports Based on most recent 12 months of data for prospectively assigned beneficiaries Provided at beginning of agreement period and end of performance year as well as with each quarterly aggregate data report Information on historically assigned beneficiaries HIPAA restrictions apply Provided upon formal request from ACO Available monthly For use only in coordinating and/or improving care Must publicize to patients how data will be used Includes (Where available) Financial performance Quality performance scores Aggregated metrics on assigned population Utilization data from historical beneficiaries (at start of agreement period) Includes Beneficiary names Date of Birth (DOB) Health insurance claim number Health Care Advisory Board,
15 Benchmark To establish the benchmark per ACO, CMS will calculate a risk adjusted average per capita of Parts A and B expenditures for Medicare FFS: Uses beneficiaries who would have been assigned the last 3 years and trend BY1 and BY2 to BY 3 based on national growth rates. BY1 is weighted at 10%, BY2 is weighted at 30% and BY3 at 60% Four major categories: ESRD, disabled, aged/dual eligible, aged/non dual eligible. Adjustments made for catastrophic claims 15
16 Cost (in Thousands) Estimated Start-Up Cost (Millions) Implementation Costs STUDY OF THE TWO 2012 START CLASSES DONE BY THE NATIONAL ASSOCIATION OF ACOS OF IMPLEMENTATION COSTS. Comparison of IT Costs to Aligned Beneficiaries 1 (million) ,000-10,000 10,000-15,000 16,000-25,000 26,000 Aligned Beneficiaries 5,000-15,000 16,000-25,000 26,000+ Aligned Beneficiaries Internal Staff & Equipment Costs External Vendor Contract Costs Aligned Beneficiaries 16
17 Early Results and Challenges to Current Model 17
18 ACO Early Financial Results TO DATE, MSSP AND PIONEERS HAVE GENERATED $817M OF SAVINGS WITH $372M RETURNED IN SAVINGS PIONEERS: second year was better than first year ($96M vs $87M). Achieved a 1% lower spending trend overall for the Medicare population vs FFS. Almost 1/3 of original participants have left the program MSSP ACOS: Almost 25% of 2012/2013 participants were able to share savings of over $300M. Another quarter reduced spending but not enough to share savings. One ACO overspent by $10M and owed $4M back. Source: McClellan, M.B., Kocot, L., White, R. Katikaneni, P., Medicare ACOs, Continue to Improve Quality,Some Reducing Costs. Brookings.9/22/14. 18
19 And then there were 19 19
20 ACO Early Quality Results OVERALL HIGHER AVERAGE PERFORMANCE: PIONEER ACOS: all reported quality and mean quality scores increased 19% and overall improvement on 28 of 33 quality measures. Also reported improved average performance scores for patient and caregiver experience for 6/7 measures. MSSP ACOS: improved in 30 out of 33 measures and overall increase in patient experience over FFS. Also achieved higher average performance on 17/22 GPRO measures. 9 MSSPs failed to report quality scores: 4 of which would have qualified for shared savings Source: McClellan, M.B., Kocot, L., White, R. Katikaneni, P., Medicare ACOs, Continue to Improve Quality,Some Reducing Costs. Brookings.9/22/14. 20
21 Pioneer Quality CMS Pioneer ACO Program Quality Performance Average Quality Score by Domain Domain PY1 PY2 Change Patient/Caregiver Experience 1.66 (83%) 1.72 (86%) +3% Care Coordination/Patient Safety 1.22 (61%) 1.41 (71%) +10% Preventative Health 1.40 (70%) 1.60 (80%) +10% At-Risk Population 1.35 (67.5%) 1.65 (83%) +17.5% 21
22 Additional Drilldowns PHYSICIAN LED ACOS WITH OR WITHOUT HOSPITAL AFFILIATION FLORIDA AND TEXAS Source: McClellan, M.B., Kocot, L., White, R. Katikaneni, P., Medicare ACOs, Continue to Improve Quality,Some Reducing Costs. Brookings.9/22/14. 22
23 Challenges to Current Model Fee-for-Service underlying structure Reset of Base Benchmarks Required two sided transition Upfront costs (2012 cohort study) Beneficiary assignment retrospective Long settlement periods 23
24 ACO Investment Model Overview and Proposed Changes 24
25 What is AIM? ACO INVESTMENT MODEL Developed in response to stakeholder concerns that some ACOs lack access to funding needed to invest in an infrastructure to implement such a program successfully Encourages formation of ACOs in areas where there are low concentration of current programs. Focus on rural areas Upfront payments and per beneficiary payments. 25
26 AIM Model AIM class starting in 2016 Current MSSP participants can join from 2012, 2013 and 2014 classes Three payment streams for 2016 class: An upfront, fixed payment: Each ACO receives a fixed payment of $250,000. An upfront, variable payment: Each ACO receives a payment of $36 per beneficiary based on the number of its preliminarily, prospectively-assigned beneficiaries. A monthly payment of varying amount depending on the size of the ACO: Each ACO receives a monthly payment of $8 per beneficiary based on the number of its preliminarily, prospectively-assigned beneficiaries for up to 24 months. During the selection process, the ACO Investment Model will target new ACOs serving rural areas, areas of low ACO penetration and existing ACOs committed to moving to higher risk tracks. 26
27 AIM Model WHO CAN PARTICIPATE? For ACOs starting in 2016, an ACO will be eligible to participate in AIM if it is eligible to participate in MSSP and satisfies the following requirements: Has 10,000 or fewer preliminarily, prospectively-assigned beneficiaries Does not include a hospital as an ACO participant or an ACO provider/supplier unless the hospital is: Critical Access Hospital (CAH) or; Inpatient Prospective Payment System (IPPS) hospital with 100 or fewer beds Can t be owned or operated in whole or in part by a health plan 27
28 AIM Model AIM PAYMENT EXAMPLE PARTICIPATION BEGINS IN JANUARY ,000 ASSIGNED BENEFICIARIES UPFRONT, FIXED PAYMENT $ 250,000 UPFRONT, VARIABLE PAYMENT 216,000 MONTHLY PAYMENT ($48,000/MONTH) 1,152,000 TOTAL PAYMENTS OVER 24 MONTHS $ 1,618,000 28
29 AIM Additional Questions DO I REPAY THE UPFRONT PAYMENTS? CMS will recover the payments from shared savings as long as you are in the program. If you don t earn enough to cover the costs and you don t enter a second program, CMS will not pursue recovery. WHAT IF THE PAYMENTS ARE MORE THAN I SAVE? CMS won t pursue amounts in excess of the earned shared savings. WHAT IF I LEAVE THE PROGRAM EARLY? CMS will pursue full recovery of payments if you leave the program early. 29
30 MSSP Proposed Expansion On December 1, CMS proposed a 3 rd Track Issue Track 1: Current Track 1: Proposed Track 2: Current Track 2: Proposed Track 3: Proposed Risk One Sided No change Two Sided No change Two Sided Transition To Two Sided Assignment Benchmarks Quality Sharing Rate 1 st agreement is one sided but subsequent are two sided Preliminary prospective assignment for reports. Retrospective assignment for financial reconciliation Reset at the start of each agreement period Up to 50% based on quality Remove requirement to transition to two sided Can go straight into two sided but cant go back to track 1 No change Same as Track 2 No change Same as Track 1 No change Prospective assignment for reports and financial reconciliation Seeking alternatives Same as Track 1 Seeking alternatives Same as Track 1 and seeking alternatives Up to 50% based on quality for 1 st agreement period, reduced 10 % points for each subsequent pd under this model Up to 60% based on quality No change MSR/PPL 2%-3.9%/10% No change 2%/15% No change 2%/20% Loss Sharing Limit N/A No change 5% Yr 1, 7.5% Yr 2, 10% Yr 3 No change 15% Up to 75% based on quality 30
31 Timeline for MSSP & AIM MONTH DEADLINE EFFORT MAY 31 NOTICE OF INTENT LOW JULY 31 APPLICATION MID JANUARY 1 START DATE HI 31
32 Next Generation ACO Model 32
33 Key Components: Next Gen Current MSSP participants and new applicants Two application rounds: 2015 & 2016 Three one year performance periods with two additional one-year extensions Smoothing cash flow through alternative payment mechanisms Discount rather than MSR Quality, Regional and National Efficiency components 33
34 Key Improvements Refined Benchmarking Reward quality performance Rewards attainment of and improvement in cost containment Transition away from reference to historical ACO expenditures Improve Engagement Increased access to visits Reward payment for care from the ACO Decision process for alignment Collaboration on communication 34
35 Types of Entities & Functions Alignment Quality Reporting through ACO Population- Based Payments Capitation Coordinated Care Reward 3-Day SNF Rule Telehealth Post- Discharge Home Visit Provider/ Supplier Preferred Provider SNF Affiliate Capitation Affiliate This table is a simplified depiction of key design elements with respect to provider and supplier roles. It does not necessarily imply that this list of capabilities is exhaustive with regards to possible ACO relationships and activities. 35
36 Examples of Relationships Multiple Relationship Possibilities with Non-Provider/Supplier Entities Specialist Each type of line depicts a possible form of relationship described by the text adjacent to each line: Preferred Provider SNF SNF Affiliate Capitation Affiliate ACO SNF PCP 36
37 Contact Us Kent Thompson Manager DHG Healthcare Winston-Salem, NC P: Craig Anderson, Sr. Principal DHG Healthcare Hudson, OH P: Melinda Hancock Partner DHG Healthcare Richmond, VA P:
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