Market Trends: Volume to Value. Payment for dialysis access procedures in 2016 and beyond. Controlling costs. Fee for Service Coding Changes

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1 Market Trends: Volume to Value Reimbursement is changing from payments based on fee-for-service (FFS) (volume) to a more value-based system and will shift some risk from payors to providers. Payment for dialysis access procedures in 2016 and beyond The Risk Continuum Associated With Existing and Proposed Reimbursement Structures PQRS Bundled VBPM Payment eprescribe Meaningful FFS use Payment for Episodes of Care Financial Risk Global Payment With Performance Risk Global Payment With Financial Risk (ACO, ESCO) Timothy A. Pflederer, MD Chair, ASDIN public policy committee Board member, RPA Consumers Employers Health Plans Clinical Integration Physicians Medical Groups Hospitals Government Payors Other Providers No other disclosures Adapted from: Healthcare Financial Management Association (HFMA), Accountable Care: The Journey Begins, August Controlling costs Reduce FFS price Revalue existing CPT codes Devalue? Bundle CPT codes Create value incentives Pay for performance Penalty? PQRS, VBPM Share risk Episode based payments Global payment (ACO, ESCO) Fee for Service Coding Changes Revaluation Recent changes Angioplasty (35476, 35475) Bundling Angiogram (36147) Stent placement (37238, 37239) Upcoming Mandated Changes Further bundling All dialysis access family codes Angiogram Angioplasty Arterial Venous Thrombectomy Likely to have a single 36xxx code for the procedure that includes cannulation, all selective catheterization, angiogram, angioplasty, and stent ASDIN

2 Similar concept to LE arterial bundled codes Impact on payment uncertain and depends on CPT and RUC process (2015) Final bundles and coding rules Reassessment of practice expense Could allow inclusion of newer, more expensive technology (covered stent) Survey for physician work Outcome dependent on participation and accuracy CMS acceptance and inclusion in PFS Likely 2017 Pay for Performance Value incentive Meaningful Use Incentive Schedule $18, $12,000 $18, $8,000 $12,000 $15, $4,000 $8,000 $12,000 $12, $2,000 $4,000 $8,000 $8,000-1% 2016 $2,000 $4,000 $4,000-2% Total $44,000 $44,000 $39,000 $24,000 Physician Quality Reporting System (PQRS) Incentive program for individual No quality measure specific to interventional nephrology Converts to a penalty program in 2016 If did not report in 2014 will have 2% reduction in all of your medical payments in 2016 Reporting in 2015 will affect 2017 payments, etc * Penalties may increase to -5% in ASDIN

3 Value Based Payment Modifier (VBPM) Mandated by the Affordable Care Act Incentive/penalty program for group practices and individual Who is affected 2015 all in groups 100 eligible providers (EPs) Based on performance in CY 2103 Voluntary election of quality tiering (+/-) If opt out of quality tiering neutral value modifier 2016 all in groups 10 Eps Based on performance in CY 2014 Quality tiering mandatory 2017 and beyond all who bill Medicare VBPM 2016 Those groups and individual not participating in PQRS will have an additional -2% modifier All Medicare payments reduced 2% For those who are participating Quality tiering will determine if a group practice s performance is statistically better, the same, or worse than the national mean Quality based on PQRS reporting Cost based on resource utilization based on total cost per capita of Part A and B attributed patients + disease specific costs with risk and geographic price adjusters VBPM (con t) Quality and Cost are combined for a value score, Providers grouped into tiers of quality and money is redistributed accordingly -1.0% -0.5% -0.5% +1 x Value = Quality / Cost Low cost Avg Cost High Cost +1 x +2 x High Quality x x 0% Avg Quality x 0% - 1.0% Low Quality 0% - 1.0% -2.0% *** Physicians treating frailest patients more likely to incur penalty CMS contractor found that a third of groups with sickest patients fell into high cost category compared to 8% of all groups Value = Quality / Cost 16 Q: When Does VBPM Take Effect? A: It Depends on your group size.we will all be measured in 2015 Cumulative impact Year Deficit E-Prescribing Health Physician Quality Value-Based Modifier Reduction Information Reporting System, (Budget neutral Sequester Technology/ including increases and Meaningful Maintenance of decreases in payments Use Certification (MOC) based on cost/ quality Program data measures with 2- year time lag) 2014 (-2%) (-2%) $4-12K 0.5% if no MOC; 1.0% if MOC 2015 (-2%) $2-8K (-1%) (-1.5%) (-1%) Applied to groups of 100 or more 2016 (-2%) $2-4K (-2%) (-2%) (-2%) Applied to groups of 10 or more 2017 (-2%) (-3%) (-2%) (?) Applied to all 2018 (-2%) (-4%) (-2%) (?) Applied to all 2019 (-2%) (-5%) (-2%) (?) Applied to all Year HIT-MU PQRS VBPM Potential impact % -2 % -2 % - 6 % % -2 %? - 5 % % -2 %? - 6 % % -2 %? - 7 % + It is easy to see why CMS likes these programs Presented by: Sharon Mcilrath - AMA Assistant Director Federal Affairs On January 31, ASDIN

4 Payer contracting Global Payment and Risk Sharing Shared value Contract for services between group practice or provider corporation and health insurance carrier Fixed price Bundled payment Population management Episode Based Procedure Payment CMMI requested information from specialty societies about a potential new model Pay for a procedure episode instead of each individual component of a procedure Essentially bundling across procedure and EM codes Complex Medical Management Model: Episode-Based Payment Structure Episode Start: Incident and prevalent Medicare ESRD beneficiaries Episode End: Patient death or transplant Payment: Separatevariable length episodepaymentfor eachtrigger Phase Start Other Included Services: Phase End Trigger 1: Initial Vascular Access Placement Vessel mapping; Fistula/graft creation; Catheter placement; PD access placement Interventional care to achieve access maturity Access site maturity (first successful dialysis treatment) Trigger 2: On-Going Maintenance Vascular access surveillance, repair, and maintenance Angiogram, angioplasties, thrombectomies, coil embolization, and stents Trigger 3: Access Failure/New Access Access failure (placement of catheter or creation of new fistula/graft Interventional care to achieve access maturity Access site maturity (first successful dialysis treatment) Standardized rate * X% Standardized rate * Y% Standardized rate * Z% 22 Key Considerations Specialists Involved: All specialists including nephrologists, interventional nephrologists, vascular/general surgeons, interventional radiologists Sites of Service Included: All settings, including freestanding vascular access centers (physician office), hospital outpatient departments, ambulatory surgical centers Possible Risk-Bearing Entity (Convener): Convener will be responsible for coordinating care for beneficiaries across settings and distributing Medicare payments (and gains/losses) Freestanding vascular access centers are well positioned to serve this function, as they have significantly nephology involvement and currently provide care across multidisciplinary care teams The appropriateconvener for those treated in hospital outpatient departments needs to be further considered Freestanding vascular access centers could create an additional entity to manage these patients Conveners should include nephrologists Episode payment could encourage more patients to be treated in freestanding vascular access centers, which could result in better clinical outcomes and reduced Medicare costs Key Benefits of Episode-based Payment Structure for Patients and the Medicare Program Payment structure focuses on a critical service for the ESRD population Without proper placement, repair, and maintenance of the vascular access site, patient conditioning decreases and dialysis treatments become less effective The care coordination infrastructure and provider networks already exist within the freestanding vascular office centers These services could be extended to patients who currently receive care in the hospital outpatient department Published research demonstrates that patient outcomes for a vulnerable population can be significantly improved and Medicare can achieve significant savings Expansion of this episode-based payment system to other payers (during the waiting period prior to Medicare eligibility for ESRD) could lead to better access health upon once covered by Medicare A coalition of physician specialty societies and vascular access providers is developing this proposed system ASDIN

5 Summary Coding of dialysis access procedures is going to change dramatically (+ or -) Participating in pay for performance is important because the incentive is changing Avoid penalty Positioning your center now to be able to participate in value based payment systems will be critical as they become the dominant model Pay for value rather than volume ASDIN