BPCI Advanced Understanding the Latest Episode Based Program and the Opportunities A Presentation for the ACC April 3, 2018 Christopher J. Donovan Partner Foley & Lardner LLP C. Frederick (Fred) Geilfuss Partner Foley & Lardner LLP Mark Tatelbaum Vice President & General Counsel Ameritox, LLC
Today s Agenda Overview of BPCI Advanced Legal and Regulatory, including waivers Comparison to other bundled programs Results from original BPCI Opportunities and Strategies for success Q&A 2
BPCI Advanced Overview Last models of original BPCI program conclude September 30, 2018 Application date has passed, but still opportunities through contracting with Conveners or Participants First Bundled Payment program from Trump Administration Driven by MACRA New HHS Secretary Nominee Azar s perspective 3
BPCI Advanced Overview (cont d) Voluntary program Only one model (original BPCI had four models) No Model 3 (the Post Acute Bundle) BPCI-A starts October 1, 2018 and ends December 31, 2023. One later opportunity for Participants to join BPCI-A is expected to start January 1, 2020. 4
BPCI Advanced Overview (cont d) Single retrospective bundled payment, one risk track, 90 day episode 29 Inpatient/3 Outpatient clinical episodes Qualifies as an Advanced APM for MACRA Payment tied to quality measures Target prices provided in advance 5
Stakeholders Convener and Non Convener Participants Conveners may be Acute Care Hospitals (ACH), Physician Group Practices (PGP), other Medicare provider/supplier, intermediary Most expected to participate through Conveners Non Convener Participants can only be PGP/ACH: only bears own risk, not downstream Episode Initiators Only PGP/ACH can be Episode Initiators Must elect one or more clinical episodes for bundles in application and from October 2018 until January 2020 no drop/add 6
Payment and Quality Measures Providers continue to bill Fee-for- Service Actual FFS compared to Target pricing (Target is 3% discount to historic FFS) Quality measures can increase/decrease payment 7
Other 30 day post episode look back to assess increase in FFS/cost shifting with potential repayment from Participant to CMS Model is a total cost of care and Participants at risk for use of providers outside the bundle 8
BPCI-A Programmatic Waivers CMS Expects to offer conditional waivers of Medicare Payment rules Waiver of 3-Day Acute Care Stay for SNF Medicare coverage Telehealth Payment Policy Waiver Post-Discharge Home Visits Payment Waiver 9
BPCI-A Other Aspects Learning System Activities Organized sharing of care redesign ideas Active Monitoring Site visits Monitoring of referral patterns Assessing outcomes Looking for changed behavior 10
BPCI-A Beneficiary Protections Beneficiary free choice of providers no restraints on free choice Beneficiary may not opt out of payment methodology if choose a BPCI-A Participant Participants must notify beneficiaries of their participation in BPCI-A and require downstream EIs and Participating Providers to do so (template notice letter by CMS to be provided) 11
BPCI-A: Fraud and Abuse Waivers Fraud and abuse waivers expected for BPCI-A Assumed will be same or similar to original BPCI Model 2 F&A Waiver Original BPCI Model 2 Waivers for EI contribution of internal cost or savings to Savings Pool Incentive Payments distributed from Incentive Pool Gainsharing Payments made by Gainsharer Group Practice to Gainsharer Group Practice Practitioners In-Kind patient engagement incentives provided by Model 2 Awardee, EIP or Gainsharer to a Model 2 Beneficiary (waives any Beneficiary Inducement CMP) (e.g., free transportation, equipment) 12
Overlap with Other Initiatives BPCI-A is not a shared savings model, so may participate in both MSSP and Next Gen ACO along with BPCI-A. But, clinical episode in BPCI-A excluded for Medicare Beneficiaries aligned to NextGen ACOs, Track 3 of MSSP, among others If in CCJR may not participate in BPCI-A for clinical episodes included in CCJR 13
BPCI A: Applications Applications were due March 12 Next application not expected until 2020 14
Original BPCI Results Evaluations of original BPCI Model 2 show opportunities Model 2 had 215 Awardees and 422 hospitals participating Participating hospitals were generally larger, non-profit urban hospitals with a teaching program, often in competitive markets Major Joint Replacements of lower extremities (60%) and Congestive Heart Failure (27%) were most selected clinical episodes. Joint Replacements showed the most improvement in cost reductions 15
Original BPCI Results (cont d) Participating hospitals generally had higher baseline costs for selected episodes than nonparticipating hospitals (10% higher on average) Participating hospitals made limited use of Permitted Beneficiary incentives (18%) 3-day hospital stay waiver (5%) Telehealth and Home Visit (5% or less) While Gainsharing was included in 61% of Participation Agreements, Gainsharing only used by 18% of Awardees (to share $13.5 million); Internal Cost Savings only used by 8% 16
Original BPCI Results (cont d) Physicians most likely recipients of gainshares Average episode was $1,273 below baseline cost (4.5% savings) Savings largely due to lower payments for Post- Acute Providers Generally used education of physicians to make them aware of efficiency opportunities No significant change in quality noted 17
STRATEGIC OPPORTUNITIES FOR DOWNSTREAM PROVIDERS/SUPPLIERS Approach Conveners who contract with multiple Episode Initiators Performance Based Sales Bundled Product/Service Platform M and A See Medtronic (care management/monitoring); Cardinal (Navihealth acquisition); Phillips (Wellcentiv acquisition); Stryker 18
STRATEGIC OPPORTUNITIES FOR DOWNSTREAM PROVIDERS/SUPPLIERS (cont d) Propose innovative redesign that ensures quality and reduces cost Example, sharing arrangements where reimbursement is tied to clinical improvement while lowering expense Data Analytics/Benchmarking/Technology Tools Identify clinical episodes with opportunities Understand cost elements in bundle percentage cost elements, track outcomes, costs Commercial payors and self-funded employer opportunities and device firms as conveners 19
STRATEGIC OPPORTUNITES Collaboration with Medacta Believed to be the first of its kind in the industry DANVILLE, Pa. and CASTEL SAN PIETRO, Switzerland Once again, Geisinger is pioneering a ground-breaking new model for care in which the innovative health system has announced it will expand its ProvenCare Total Hip program even further by standing behind the costs associated with orthopaedic surgeries for a lifetime. Geisinger collaborated with Medacta International, a global leader in orthopaedic medical devices, on a first-of-its-kind pilot program to provide a Geisinger Health Plan member who was receiving hip-replacement surgery an unlimited time frame for future surgical care and cost that may be needed. These costs will be proportionally shared between Geisinger and Medacta, including the device itself and all hospital costs, while the patient remains with Geisinger Health Plan and is treated by Geisinger providers. Source: https://www.geisinger.org/about-geisinger/news-and-media/news-releases/2018/03/08/21/51/geisinger-announces-it-will-standbehind-cost-of-hip-surgery-for-a-lifetime 20
LEGAL ISSUES AKS/STARK/Gainsharing CMP See recent OIG Advisory opinions on Bundles, volume discounts, performance rebates expanding traditional safe harbor for warranty and discounts/rebates to Value Based Purchase See comments solicited by OIG from Pharma, Advamed regarding further needed expansion of safe harbors, additional safe harbors for VBP HIPAA regarding data analytics- combining product data with population health services (marketing versus population health uses; need for separate corporate divisions) 21
Action Steps for Counsel DO understand value based payment methodologies including fraud and abuse and program waivers For M and A deals, DO look at current OIG AOs on value based safe harbors and how they fit the post close business model especially shared product/service offerings https://oig.hhs.gov/fraud/docs/advisoryopinions/2017/ AdvOpn17-03.pdf For contractual value based pricing DO understand how discounts/rebates are calculated, whether they distinguish payors, are objective, can be documented with customer to achieve maximum safe harbor coverage DO analyze payment streams for compliance 22
Action Items for Counsel (cont d) DO check State Risk Based Organization (RBO) laws to verify if any insurance, capital reserve, regulatory requirements are triggered DO insure that compliance executives understand VBP and have adopted necessary policies and procedures to tailor various business approaches DO stay current on new models emanating from CMMI and commercial payor groups as they likely will run ahead of safe harbors 23
Q & A 24