1 CNYCC Joint Board and Finance Committee Forum December 1, 2015 Michael Bailit Bailit Health
2 Meeting Agenda 1. Value-Based Payment Overview Environmental Context New York State Roadmap DSRIP Payment Reform Models Expectations of the PPS 2. PPS Contracting Options Pros and Cons 3. Operational Implications 4. Discussion
3 Value-Based Payment Overview Environmental Context New York State Roadmap DSRIP Payment Reform Models Enter Medicare?
Introduction to Value-Based Payment For many years health care has been purchased on a piecework basis, where delivery of each service generates a separate payment. What do you get when you pay per piece? You get lots and lots of pieces especially for high margin services like surgery and imaging. Payment drives care delivery. 4
The US delivers more higher margin services than other developed countries... MRIS PER 1,000 United States France 106.9 90.9 OECD Median Canada 52.8 50.6 Source: D. Squires and C. Anderson, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.
but we re not any healthier! PERCENT OF POPULATION 65+ WITH TWO OR MORE CHRONIC CONDITIONS United States 68 France 43 OECD Median N/A Canada 56 Source: D. Squires and C. Anderson, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.
7 Goals of Payment Reform Payment reform is intended to create provider economic incentives to improve health care delivery and produce high-value, cost-effective care. There are multiple alternative payment models to feefor-service payment. There is also increasing evidence for some alternative payment models of critical success factors. Some believe that one critical success factor for payment reform is matching the strategy to the geographic region and its delivery system.
8 What Does the Road Ahead Look Like for Central New York? Payment reform is happening all around us and becoming an increasing focus for Medicare, states, commercial insurers and employers. The status quo is not a realistic option. While NYDOH has created a detailed roadmap for payment reform, there is a real opportunity to shape a future path that appears to work best for CNYCC s provider community and the patients it serves.
9 Forces Behind Change: Consumers People want more accessible, coordinated, wellinformed care: One provider responsible for primary care and coordinating care (91%) Place to go for care at night and on weekends (89%) Doctors with easy access to your medical records (96%) Information on quality of care for different providers (95%) Information about costs of care before you get it (88%) People think doctors working in teams or groups improves care Doctors and nurses working closely as teams (88%) Doctors practicing with other doctors in groups (65%) Source: How, S. et al. Public views on US health system organization: a call for new directions. The Commonwealth Fund. August 2008 and Guterman, S. What do we expect from ACOs? AcademyHealth Annual Research Meeting June 8, 2014
10 Forces Behind Change: CMS (through Medicare & Medicaid) Secretary Burwell set ambitious goals for Medicare: 2016: 30% of payments will be made through alternative payment models 2018: 50% of payments will be made through alternative payment models; and 90% of FFS payments be linked to quality or value. It is testing many different Alternative Payment Models, including: Population-based payment through several different ACO models (i.e., Pioneer ACO, Medicare Shared Savings Program, Next Gen) Primary care payment through several different patient-centered medical home programs (e.g., Comprehensive Primary Care Initiative) Episode-based payment through voluntary and mandatory programs (i.e., Bundled Payment for Care Improvement, and Comprehensive Care for Joint Replacement)
11 Medicare is Increasingly Linking FFS to Value Source: Conway, P. CMMI Update November 10, 2014
12 and Making FFS a Less Attractive Option in the Long Run FEE 2015 and earlier Fee Schedule Updates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 0.5 0.5 0.5 0 0 0 0 0 0 2026 and later 0.75 QAPMCF* 0.25 N-QAPMCF** MIPS Quality Resource Use MIPS Payment Adjustment (+/-) Clinical Practice Improvement Activities 4% 5% 7% 9% Meaningful Use of Certified EHR Technology PQRS, Value Modifier, EHR Incentives Certain APMs Qualifying APM Participant Medicare Payment Threshold Excluded from MIPS 5% Incentive Payment Excluded from MIPS *Qualifying APM conversion factor **Non-qualifying APM conversion factor Slide adapted from: https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/value-based-programs/macra-mips-and-apms/macra-mips-and-apms.html
Majority of States are in the Process of Health Care System Redesign 34 states, three territories and Washington, DC all received State Innovation Model (SIM) Grants which requires multi-payer payment reform activities Model Test Awardees Model Design Awardees Round One and Round Two Awardees. Source: CMS.gov Designed by Showeet.com 13
The Commercial Sector in New York is Changing, Too Percent of commercial payments that are value-oriented in NY And the tap is expected to stay open and affect more payments over the next several years 47% 46% 15% Hospital PCPs Specialists Source: Catalyst for Payment Reform, 2013
NYS Roadmap For Medicaid Payment Reform No single path to payment reform is prescribed, however NYDOH will offer standardized options of different payment models from which MCOs and PPS can choose. Goal for 80-90% of managed care payments to providers to be by valuebased payment methodologies by the end of the DSRIP demonstration. 1 3 2 Vision of three different types of integrated services with coordination between them to serve the unique needs of the Medicaid population: 1) Integrated primary care 2) Episodic care for highly specialized services (e.g., maternity, joint replacement) 3) Specialized continuous care (e.g., for special needs populations)
Bill Gates on Change We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10.
NYS Roadmap For Medicaid Payment Reform Goal 80-90% of MCO Payments to Providers Falls within Levels 1-3 Level 0 VBP Level 1 VBP Level 2 VBP Level 3 VBP (only feasible after experience with Level 2; requires mature PPS) FFS with bonus and/or withhold based on quality scores FFS with upside-only shared savings available when outcome scores are sufficient FFS with risk sharing - upside available when outcome scores are sufficient Prospective capitation - PMPM or bundle (with outcome-based component) (For PCMH/APC, FFS may be complemented with PMPM supplemental payment) 17
Payment Reform Models in New York State s DSRIP Program TOTAL CARE FOR TOTAL POPULATION TOTAL CARE FOR SUB-POPULATION BUNDLES INTEGRATED PRIMARY CARE 18
Total Care for a Total Population Defines a budget on a per-capita basis for a broad population of patients for whom the provider assumes clinical and financial responsibility. Populations can be defined based on enrollment (e.g., PCP selection) and/or on attribution (e.g., assigned to the provider based on visit history). Most often providers share in savings generated ( shared savings ), but are sometimes held accountable for losses too ( shared risk ). Quality is incorporated into the model by diminishing savings distributions or mitigating financial losses. 19
Total Care for a Sub-Population Difference between this and Total Care for a Total Population is just a narrowed population focus. The reasoning is that certain subpopulations may need more specialized services and are best served holistically by providers skilled in their unique needs. The New York State Roadmap defines subpopulations as individuals living with HIV/AIDS and individuals in the MLTC/FIDA, HARP and DISCO populations. 20
Bundled Payments A fixed dollar amount that covers a set of services for a defined period of time. Payment is typically administered on a FFS basis with retrospective reconciliation to an episode budget. There are examples of prospective ( bundled ) payment in use, however. Most often providers share in savings generated ( shared savings ), but are sometimes held accountable for losses too ( shared risk ). Quality is typically a component of payment either influencing gain/loss distribution, or as a separate bonus. 21
Integrated Primary Care Payment is typically administered on a fee-for-service basis with a PMPM supplemental payment that might be made monthly or quarterly. This type of arrangement is typically referred to as patient-centered medical home or advanced primary care. In New York, integrated primary care arrangements that contain: a shared savings component on total cost of care will be considered VBP Level 1 a shared risk component on total cost of care will be considered VBP Level 2 PMPM capitated payment for primary care will be considered VBP Level 3 Quality must be a component in each of the VBP Levels. 22
Off-Menu Options Providers and MCOs are free to make their own valuebased payment arrangement, as long as they meet some broad objectives: 1. Be patient-centric and integrated around one or multiple conditions, subpopulation or total population 2. Shared savings and losses calculations must consider both clinical quality and cost 3. Minimum level of standardization between comparable VBP arrangements (defined in the roadmap) is required to for statewide transparency (e.g., a region could define its own episode for any condition not already being considered, but would have to use the state standard for conditions being defined (e.g., maternity)) 23
24 Off-Menu Options Off-menu options could include, but are not limited to: Bundles for conditions not included in the Roadmap A focus on a subpopulation within a bundle (i.e., lowrisk pregnancy episode) Any Medicare APM program (BPCI, CPC) Medicare or commercial ACO models Off-menu options will not be supported with data supplied by DOH.
25 Expectations of MCOs and of the PPS MCO: By waiver Year 5, all MCOs must employ non-fee-for-service payment systems that reward value over volume for at least 90% of their provider payments. MCO and PPS 1 : In DY 2 (2016), every MCO PPS combination will be requested to submit a growth plan outlining their path towards 90% value-based payments. End of DY 3 (2017), every MCO PPS combination will have at least a Level 1 VBP arrangement in place for PCMH/APC care and one other care bundle or subpopulation (a Level 1 arrangement for the total cost of care for the total population would count as well). PCMH/APC care is selected here because of its vital role in realizing the overall DSRIP goals. 1 Per timeline on page 38 of the Roadmap
Expectations of MCOs and of the PPS 26 End of DY 4 (2018), at least 50% of the State s MCO payments will be contracted through Level 1 VBPs. The State aims to have 30% of these costs contracted through Level 2 VBPs or higher at this time, yet this aim may be adjusted depending on the overall trend towards financial sustainability and high value care delivery as measured through overall DSRIP measures and cost of care measures for bundles and (sub) populations. End of DY 5 (2019), 80-90% of the State s total MCO-PPS payments (in terms of total dollars) will have to be captured in at least Level 1 VBPs. The State aims to have 50-70% of these costs contracted through Level 2 VBPs or higher at this time, yet this aim may be adjusted depending on the overall trend towards financial sustainability and high value care delivery as measured through overall DSRIP measures and cost of care measures for bundles and (sub)populations. The minimum target for end of DY 5 is 35% of total managed care payments tied to Level 2 or higher.
27 One More Thing You Should Know DOH has entered early exploratory discussions with CMS about having Medicare align its payment models with those defined in the Roadmap. CMS has interest in multipayer/all-payer approaches (e.g., Medicare waivers in MD, pending in VT). This activity is worth tracking.