PREPARING FOR THE NEXT GENERATION OF MANAGED CARE CONTRACTING Nanci Robertson, RN BSN President - Robertson Consulting, Inc. Doral Jacobsen, MBA FACMPE CEO - Prosper Beyond, Inc. DORAL JACOBSEN AND NANCI ROBERTSON DO NOT HAVE ANY FINANCIAL CONFLICT TO REPORT AT THIS TIME. LEARNING OBJECTIVES Identify barriers and deal breakers for contracting arrangements Identify various contracting methodologies payers are employing in todays transformed healthcare environment Determine critical practice attributes necessary for a successful contracting arrangement 2 1
AGENDA Connecting the Dots Today s Framework & Models Advanced Alternative Payment Models Setting up to Succeed 3 CONNECTING THE DOTS 4 2
CONNECTING THE DOTS BIG PICTURE Affordability Crisis Unsustainable Costs Aging Population 5 CONNECTING THE DOTS - PAYER COMMON THEMES Triple Aim Narrow Networks Increasing Patient Liability Growing Transparency & Cost Focus Focus on Quality Measures MACRA Alternative Payment Models (APMs) Government Payers Major Commercial Carries Employers Your Organization 6 3
Level of Economic Risk 10/31/2016 TODAY S FRAMEWORK & MODELS 7 Value Based Contracting Continuum Shared Risk Global Payments Fee for Service Performance Based Bundles Payments Shared Savings Degree of Provider Integration 8 4
CMS PAYMENT FRAMEWORK The framework situates existing and potential APMs into a series of categories. 9 WHERE ARE WE HEADED? Source: Alternative Payment Model Framework and Progress Tracking (APM FPT) Work Group. Alternative Payment Model (APM) Framework Final White Paper. Health Care Payment Learning and Action Network. 12 Jan. 2016. 10 5
CATEGORY 1 FEE FOR SERVICE Key Attributes Professional and Facility services billed separately Payment retrospective Fee Schedules based on various methodologies and payer edit logic decreases reimbursements Low Data Analytics Capabilities No Integration necessary Fundamental Drivers The more you do = the more you make The more highly reimbursed the code = the better to bill Quality not a consideration Success Factors Negotiate increases annually Compare contracts using Medicare as a base Ultimate leverage is market share 11 FEE FOR SERVICE THE MATH 12 6
CATEGORY 2 PAY FOR PERFORMANCE Key Attributes FFS reimbursement architecture w/ added financial incentives tied to quality/efficiency metrics Requires formalized process/investment by healthcare team to ensure quality metrics and cost efficiency measures are met Minimal integration and data analytics capabilities necessary Fundamental Drivers Financially incentivizes and rewards providers & healthcare team to target quality/efficiency metrics Improves outcomes for given patient population Potential for reduction in total medical expense Success Factors (all in Category 1 +) Establish realistic goals & baseline quality/cost efficiency metrics being measured Understand the reporting/reconciliation process; what, when, who and how Recognize exposure for downside potential and/or withhold Requires investment in infrastructure that can improve quality of care 13 PAY FOR PERFORMANCE THE MATH 14 7
CATEGORY 3 BUNDLES Key Attributes FFS reimbursement architecture w/ added financial incentives and potential penalties tied to quality and efficiency Performance measured compared to established target Includes Bundle Payments (tied to procedures) Requires moderate degree of integration and collaboration across the care continuum and higher level of data analytics capabilities Fundamental Drivers Financially incentivizes healthcare team to target quality/efficiency metrics Improves outcomes for given patient population Establishes mutual accountability between multiple providers Success Factors (all in Category 2 +) Understand unit cost for the bundle Must meet cost AND quality measures in order to access rewards Reduce input costs and grow volume Care coordination across the continuum 15 BUNDLES THE MATH 16 8
CATEGORY 3 SHARED SAVINGS/RISK Key Attributes FFS reimbursement architecture w/ added financial incentives and potential penalties tied to quality and efficiency Performance measured compared to established budget Includes Shared Savings/Risk Requires higher degree of integration and collaboration across the care continuum and higher level of data analytics capabilities Fundamental Drivers Financially incentivizes healthcare team to target quality/efficiency metrics Improves outcomes for given patient population Potential for reduction in total medical expense Success Factors (all in Category 2 +) Requires sustainable resources and more advanced infrastructure to achieve goals Must meet cost AND quality measures in order to access rewards Trust and collaboration between providers and payers critical 17 SHARED SAVINGS/RISK #1 THE MATH 18 9
SHARED SAVINGS/RISK #2 THE MATH 19 SHARED SAVINGS/RISK #3 THE MATH 20 10
CATEGORY 4 GLOBAL PAYMENTS Key Attributes Payment architecture reflects total cost of care for treating a primary (e.g., chronic) condition or managing an entire population Person Focused cover a wide range of services focused on preventive maintenance Requires the highest degree of integration and collaboration across the care continuum and highest level of data analytics capabilities Fundamental Drivers Financially incentivizes healthcare team to target quality/efficiency metrics Improves outcomes for given patient population Potential for reduction in total medical expense Success Factors (all in Category 2 and 3 +) Necessitates virtual integration for some models or vertical integration for highly integrated models Requires most advance transformational thinking about delivery system reform 21 GLOBAL PAYMENT THE MATH 22 11
ADVANCED ALTERNATIVE PAYMENT MODELS 23 STANDARDS FOR ADVANCED APMS The total amount an APM Entity potentially owes CMS or foregoes under an APM must be at least equal to either: (1) For [qualified participant (QP)] Performance Periods 2017 and 2018, 8 percent of the estimated average total Medicare Parts A and B revenues of participating APM Entities; or (2) 3 percent of the expected expenditures for which an APM Entity is under the APM. 42 CFR 414.1415 Medical Home Models - QP performance period 2017, the total annual amount that a Medical Home Model advanced APM Entity potentially owes CMS must satisfy: 2.5 percent of the estimated average total Medicare Parts A and B revenues for participating entities, and in 2018 this amount must be 3 percent. Base payments on quality measures comparable to those used in MIPS quality category Requires participants to use certified EHR technology 2019 Advanced APM Menu: Potential Future Advanced APMs: Comprehensive Primary Care Plus (CPC+) Oncology Care Model (OCM) Medicare Shared Savings Program (MSSP) Tracks 2 & 3 MSSP Track 1+ Next Generation ACO Episode Payment Models (2 tracks includes CJR) Comprehensive ESRD Care Model (CEC) Medicare Diabetes Prevention Program Cardiac Rehabilitation (CR) Incentive Payment Model 24 12
QUALIFYING VS PARTIALLY QUALIFYING APM Payment Amount 2019 to 2020 2021 to 2022 2023 + QP % Payments 25% 50% 75% Partial QP % Payments 20% 40% 50% QP All Payer % Payments NA 50%/*25% 75%/*25% Partial QP All Payer % Payments NA 40%/*20% 50%/*20% * Medicare minimum Patient Amount 2019 to 2020 2021 to 2022 2023 + QP % Patients 20% 35% 50% Partial QP % Patients 10% 25% 35% QP All Payer % Patients NA 35%/*20% 50%/*20% Partial QP All Payer % Patients NA 25%/*10% 35%/*10% 25 MEDICARE SHARED SAVINGS PROGRAMS - TRACKS 2 & 3 Currently 433 MSSPs 95 % in track 1 and 5% in Tracks 2 & 3 Shared Savings/Risk Model (two sided) Three Year Program Must have defined processes to: Promote evidenced-based medicine Promote patient engagement Report quality and cost measures Coordinate care Medicare Shared Savings Program ACO Assigned Beneficiary Population by ACO by County FAST FACTS All Medicare Shared Savings Program (Shared Savings Program) ACOs 26 13
COMPREHENSIVE ESRD CARE MODEL (CEC) Currently 13 CECs participants - beneficiaries with ESRD 1.2% population, but total spend 6.3% Shared Savings/Risk Model Four Year Program next round 1/1/17 ESRD Seamless Care Organizations (ESCOs) Dialysis Centers Nephrologists Other Suppliers Outcomes focused 500 patients matched to the entity CEC Model Participants https://innovation.cms.gov/initiatives/comprehensive-esrd-care/ 27 COMPREHENSIVE PRIMARY CARE PLUS (CPC+) New Model - builds upon Comprehensive Primary Care initiative (2012-7 Regions) P4P or Shared Savings/Risk Model Five Year Program starts 1/1/17 Advanced Primary Care Medical Home Model * Cap of 1,500 dual participants CPC + 14 Regions Multi Payer *Participants CAN include MSSP HCC Risk Adjusted Payments https://innovation.cms.gov/initiatives/comprehensive-primary-care-plus 28 14
NEXT GENERATION ACO New Model - currently 18 Participants Advanced Shared Risk Model Three Year Program next round 1/1/17 Optional years 4 & 5 Different from other MSSPs: Applicants must demonstrate significant preparedness Higher risk and rewards Population Based Payments More rigorous promotion of patient engagement Enhanced collaboration with CMS Next Gen ACO Participants FAST FACTSAll Medicare Shared Savings Program (Shared Savings Program) ACOs 29 APM SUMMARY Payment Models Provider Integration Necessary Technology / Analytics Capabilities Admin. Complexity Care Management Capabilities Provider Engagemen t Level Advanced APM in QPP? Fee For Service Low Low Low Low Low No Pay For Performance Bundled Payments BPCI, CJR Shared Savings MSSP Track 1 Shared Risk MSSP Tracks 2 & 3 Low Low Low Medium Medium No Medium Medium Medium Medium Medium Yes/No Medium Medium Medium Medium Medium No Medium High High High High Yes Next Gen ACO High High High High High Yes CPC + High High High High High Yes CEC High High High High High Yes OCM High High High High High Yes Global Payments High High High High High Yes What are you ready for? It depends Market? Providers? Gaps? Resources? Capital? Mission/Vision? Risk Tolerance? Culture? 30 15
SETTING UP TO SUCCEED 31 ESTABLISH A VALUE PROPOSITION Value Propositions answer the following questions: Who are you? What value does your practice add to the network? How can you quantify how you add value? Why are you better than the competition? Where do you see yourself on the managed care contracting continuum? 32 16
MACRA GOAL 2017 ADMISSION TO THE 70+ CLUB 33 COMPLETE A MARKET ASSESSMENT Understanding how you are perceived is a foundational step. http://graphics.wsj.com/medicare-billing/ 34 17
35 EVALUATE CURRENT PERFORMANCE Devil is in the details CPT code level Payer current fee schedules Unit cost and revenue Hassel factor Language considerations Payer edits APMs % Payer Total Gross % Payers Total Charges Mix Revenue Collections Payer 1 $ 1,000,000 17% $ 700,000 70% Payer 2 $ 500,000 8% $ 300,000 60% Payer 3 $ 750,000 13% $ 590,000 79% Payer 4 $ 250,000 4% $ 100,000 40% Medicare $ 1,500,000 25% $ 1,000,000 67% Medicaid $ 500,000 8% $ 300,000 60% Commercial $ 750,000 13% $ 600,000 80% Self Pay $ 500,000 8% $ 400,000 80% Others $ 250,000 4% $ 200,000 80% Total $ 6,000,000 100% $ 4,190,000 70% 36 18
NEGOTIATE AGREEMENTS WITH THE END IN MIND Create a Collaborative relationship You are important without practices there is no network Know where you are headed Ask the right questions Put the past behind Be the partner of choice Leverage your strengths Be rewarded for the Value you Add 37 MONITOR PERFORMANCE AND STEER Key components of a comprehensive contract monitoring system: Complete a contract quick reference guide Load allowables into practice management system Monitor payer website regularly Keep your finger on the pulse of denial and/or administrative burden issues Plan for the next round of negotiations in terms of timing 38 19
BEST PRACTICES : By failing to prepare, you are preparing to fail. - Benjamin Franklin Define practice roles and responsibilities for contracting activities with clarity Analyze contract performance thoroughly and establish baseline performance Establish timelines for negotiations based on historical performance Secure a provider champion to support the process Understand that a well thought out approach pays off Take emotion out of the equation Put the past behind them Focus on creating a collaborative relationship with payer partners and understand that it will not be perfect for anyone Establish both short and long-term goals Consider new approaches/measures and assist the practice in growing into value-based arrangements 39 LET DORAL AND NANCI KNOW WHAT YOU THOUGHT! Fill out the speaker evaluation emailed to you at the end of each day or immediately through the MGMA16 mobile app. 40 20
QUESTIONS? Nanci Robertson, RN BSN President - Robertson Consulting, Inc. roberstonconsulting@comcast.net (303) 981 5138 Doral Jacobsen, MBA FACMPE CEO - Prosper Beyond, Inc. doraldj@prosperbeyond.com (828) 231 1479 41 21