Bundled Payments

Stacey Schulz, MBA

Sr. Contract Manager

UnityPoint Health - Meriter

Stephanie Cain, APN, DNP

Advanced Practice Nurse - Colorectal Center

UnityPoint Health Peoria- Methodist Medical Center

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Purpose & Learning Objectives

• Give an overview of Bundled Payment initiatives at UnityPoint - Meriter and UnityPoint - Peoria Methodist– What are Bundled Payments?– How do we structure a Bundled Payment Program?– What is impact of Bundled Payments on delivery of

Care?

Bundled Payments

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Fee For Service Payments

• Separate payments for each service during a single illness or course of treatment– Fragmented provision of care– Minimal coordination across providers and health

care settings– Rewards quantity vs. quality

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What are Bundled Payments?

• A lump sum payment for an entire episode of care– More coordinated care– Higher quality outcomes– Lower cost to payors/patients– Opportunity to align incentives for providers across

the care continuum

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Available Opportunities

• Partnership for Healthcare Payment Reform – Private Payor Bundle Pilot

• Center for Medicare and Medicaid Innovation (CMMI)’s Bundled Payments for Care Improvement Initiative (BPCI)

Bundled Payments

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PHPR

• Initiative sponsored by the Wisconsin Health Information Organization: provide superior healthcare at affordable costs

• Total Knee Replacement Pilot– Bundled Payment with a private payor– Collaborative communication and feedback amongst

participants (providers and payors)– Ability to design episode of care and required

performance measures

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CMMI – Bundled Payments for Care Improvement Initiative

• Four innovative payment models– Financial and performance accountability

measures– Care redesign/enhancements

• Evidence-based medicine• Standardized operating protocols• Improved care transitions

– Potential to gainshare

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BPCI Models of Care

• Model 1: Retrospective Acute Care Hospital Stay Only

• Model 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care

• Model 3: Retrospective Post-Acute Care Only• Model 4: Prospective Acute Care Hospital Stay

Only

Bundled Payments : CMMI

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Model 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care• 48 Episodes (MS-DRG severity family) to select from

Post-Acute Episode Length– 30, 60, or 90 days

• 3% discount for 30 and 60 days• 2% discount for 90 days

• Risk Track for Outliers– A: 1/99, B: 5/95, C: 5/75 – Responsible for 20% of episode payments above the high-end threshold

• Model 2 Waivers

– Payment Policy Waivers• 3-Day Stay Requirement for SNF Payment• Post-Discharge Home Visit• Telehealth

– Fraud and Abuse Waivers• Savings Pool Contribution Waiver• Incentive Payments Waiver• Group Practice Gainsharing Waiver• Patient Engagement Incentive Waiver

Bundled Payments:

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BPCI Model 2 - Meriter

• Major joint replacement of the lower extremityMS-DRG 469: Major joint replacement or reattachment of lower extremity with major complication or comorbidity

MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complication or comorbidity

• 90 days, 2% discount• Risk Track B (5/95)• Fraud and Abuse Waivers

– Savings Pool Contribution Waiver– Incentive Payments Waiver– Group Practice Gainsharing Waiver

• Live: January 1, 2014

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CMS Pricing Rules

•Update Factors

•Area Wage Index

Historical Hospital

Claim Data

•Risk Tracks•National Case-mix Weights

•Low Volume Adjustment

Apply

•Area Wage Index

•Case-mix•Discount

Adjustments

Target Price

$

End Result =

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Post-Episode Spending

• CMS will perform a Post-Episode Spending Calculation for the 30-Day Post-Discharge period after an episode ends– Total expenditures during the 30-Day Post-

Episode period exceeding the Risk Threshold (5/95), is excess spending that must be repaid.

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Net Payment Reconciliation Amount

Target Price Aggregate FFS Payment

Net Payment Reconciliation

Amount

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Opportunity to Gainshare

• Model 2 Fraud and Abuse Waivers allow the development of a Gainsharing Program to allow Awardees to share savings with providers/practitioners involved in Care Redesign for identified Episodes of Care– Internal Cost Savings– Positive Net Payment Reconciliation Amounts

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Gainsharing Program Requirements• Ensure care is not inappropriately reduced• Maintain or improve quality of care• No inappropriate change in utilization or referral

patterns• Protect against fraud, waste, and abuse

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Bundled Payment Process

• Convene an interdisciplinary team• Define the episode of care• Develop performance measures

– Financial– Quality

• Create model of care• Price the episode of care• Identify cost reduction opportunities• Develop gainsharing program• Foster a continuous process improvement plan

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Interdisciplinary Team

• Designed to develop and monitor the episode of care and performance– Legal/Policy– Clinical Leaders: inpatient, surgical, therapy,

post-acute care– Quality/Performance Improvement– Finance/Data analysis– Administration– Physicians

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Turning Physician Interest into Engagement

Monthly Meetings

For the first time, physicians were able to see how they

were performing not only as an individual, but also relative to their peers.

We were transparent.

We Brought Data

Throughout the course of the meetings, we asked

for the physicians to help us design the bundle.

We included them in the process.

We Asked for Help

Physicians walked into a room with a room full of

administrative and operational power.

We were committed.

We Demonstrated Solidarity

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Define the Episode of Care

• Define episode parameters – Included services and items– Excluded services or items– Related Post-Acute Care– Length of Episode

• Qualification Criteria– Eligibility criteria– Ex: Age, limitations of co-morbidities, etc.

• Outlier Protection– Understand where outlier risk resides– Episode development and model of care manages clinical risk

not probability risk

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Develop Performance Measures

• Aim to balance cost and quality outcomes• Complete analysis of “baseline” cost of episode of

care– “Cost” defined as real cost– Segregate variable cost to model volume risk

• Assign Target Cost for purposes of gainsharing (if applicable)

• Determine quality measures– Revision rates– Pain scores– Patient satisfaction scores– Return to functionality assessments (KOOS/WOMAC)

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Group Metrics, Non-financial

Benchmark100%100%

00

Benchmark3.08

Benchmark89%89%

100%67%

100%

Measure Survey 1 Survey 2 Survey 3Change in Score (2-1)

Change in Score (3-1)

Average of Pain 41.2 83.3 -- 42.1 --Average of Symptom 39.1 75.4 -- 36.3 --Average of Daily Living 46.7 86.1 -- 39.4 --Average of Sports and Recreational 27.5 74.2 -- 46.7 --Average Quality of Life 19.3 69.7 -- 50.4 --

KOOS

Physician Communication ScoreNurse Communication ScoreDischarge InstructionsPain Always Well ControlledRate Hospital

Quality Measures

Patient Length of Stay

Patient Experience Measures (HCAHPS)Measure

Measure

MeasureBeta Blocker During Preoperative Period - Knees (Age 18-65)Surgery Patients Receiving Appropriate VTE Prophylaxis - Knees (Age 18-65)30-Day Readmission Rates for Knee Replacements30-Day Complication Rate

Average (mean) Length of Stay:

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Monitoring and Tracking Data

• Develop a mechanism for tracking data• Systematize processes• Communicate outcomes and results timely• Question outliers and idiosyncrasies

– Learn from them and adjust processes, screenings, communications, etc. accordingly

• Consider sample size– Need an “n” that is significant

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Data Analysis Challenge: Linking Disparate Data

Pre-admission SurgeryAcute-Stay/ Discharge

Post-Acute Care

Inpatient Stay

Records

Supply/ Purchasing

Records

Physician Clinic

Records

OR Records

Home Health

Records

Insurance Records

Pharmacy Records

Anesthesia Records

Therapy Records

Quality Records

Records that are owned by other entities23

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Create Model of Care• Identify standards of care and best practices• Understand the cost variation for each component of service

– OR– Implant– Inpatient– Therapy– Home Care– SNF– Readmissions

• Facilitate conversations to identify opportunities by comparing peer-to-peer and against best practice guidelines– Share data and let the data speak for itself– Identify physician champions – Solicit supporting documentation/educational articles, etc.

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Pre-bundle Patient Care

Pre-admission Surgery/Acute Stay

Discharge Post-Acute Care

Post-bundle Patient Care

Pre-admission Surgery/Acute Stay

Discharge Post-Acute Care

• Growing partnership for all stakeholders throughout patients’ continuum of care

• Increased physician and nursing collaboration to ensure quality care

• Increased focus on practicing evidenced-based care

• Improved coordination of care with internal and external stakeholders

• Increased focus on appropriateness of post-acute care

• Increased stakeholder awareness for how to deliver high quality, lower cost care

The Value of Working Across a Continuum of Care:

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Price the Episode of Care

• Define baseline/target price for bundle– CMMI factor in discount– Private payor factor in margin

• Assess outliers– CMMI Risk Track– Provision for outliers with private payor or manage risk with eligibility

criteria

• Prospective vs. Retrospective– Prospective requires distribution of payments to episode of care

providers – Retrospective requires reconciliation and settling – Determine frequency of analysis and reconciliation to settle and close

episodes

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Identify Cost Reduction Opportunities

• Understand the detailed cost for each component of the bundle

• Review standardization opportunities– Major: anesthesiology method– Minor: updating physician preference card

• Define key cost components to monitor and track– Inpatient Costs– Surgical Costs– Implant Costs– Sum of Variable Costs– Readmission– Emergency Room– Skilled Nursing Facility– Home Health– Outpatient Therapy

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2012 Meriter Discharge Data (MS-DRG 470)% D/C Home

with OP Follow-up

% D/C to SNF % D/C with Home Care

% D/C Other

PPIC Patients 29.5% 30.1% 39.9% .5%

Medicare Patients 14.2% 60.3% 21.4% 4.1%

Combined Patients (PPIC + Medicare)

19.1% 50.5% 27.4% 3.0%

• Nationally, Medicare Post-TKA SNF discharge rates average between 37-45%

• SNF discharge percentages highly variable across Meriter orthopedic providers (11% to 71%)

• A recent inpatient chart review of 15 PPIC patients discharged to Skilled Nursing Facilities revealed the following:

• 7 of the 15 patients reviewed had mobility limitations or lack of support at home that met skilled criteria for SNF admission

• 8 of the 15 patients were transferring and ambulating without physical assistance prior to acute care discharge and had a spouse or other caregiver available to provide support. Questionable whether skilled criteria met.

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Meriter’s Gainsharing Mechanism• Group Circuit Breakers

– Eliminate payment to the whole group if quality materially declined

• Individual Circuit Breakers– Eliminate individual physician’s payment if

defined performance measures are not met, or materially declined

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Gainsharing Mechanism

• Required Savings– 3% CMS Target Price– Allows coverage for administrative costs

• Additional Savings to be shared 50% with Hospital and 50% with Physicians

• Qualifying Cases – Payouts are determined based on number of qualified cases– Qualifications are based on criteria and standards set by the group

• Pain Management• Implants• LOS• OR efficiency, etc.

– Physicians can make the best decision for an individual patient and may lose a portion (qualified case) of gain-sharing but is not automatically forfeiting any incentive for the period

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Foster Continuous Improvement

• Quarterly Interdisciplinary Team Meetings– Report Outcomes– Review Variances– Introduce Ideas or Opportunities

• Performance Dashboard• Ongoing review and response to variances or

changes in cost or quality data• Open communication and discussion of industry

articles and research

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Online Guided CarePath: Wellbe.me

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Private Payor Considerations

• Ability to develop contractual provisions– Compliance– Termination– Available and applicable waivers– Claims processing– Applicable restrictions

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Bundled Payments

CMS Bundled Payment Initiative UnityPoint Health Peoria Methodist Medical Center Methodist has selected to be paid a bundled rate for major bowel

procedures which includes DRGs 329, 330 and 331. (colon resection primary)

Under the bundled payment initiative, Part A & B services are bundled beginning on the first three days prior to hospital admission through 90 days post discharge.

Providers continue to bill Medicare under fee-for-service. At the end of each contract year, a retrospective reconciliation occurs against the target price.

Methodist selected Risk Tract 2 and launched Oct 1, 2013

Methodist is also a medical shared savings participant with 11,000 attributed members.

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Bundled Payments

Methodist Triple Aim Objectives

A. Improve clinical outcomes of bowel resection patients.

B. Coordinate patient care across the continuum to reduce readmissions, unnecessary testing, and patients adherence to recommended care.

C. Improve the patient’s experience as measured by HCAHPS scores.

D. Increase physician satisfaction through participation in the care redesign process, outcome measurement and economic alignment.

E. Improve operating efficiency resulting in lower costs.

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Peoria Bundle Components

Bundled Payments

Physicians’ services Inpatient hospital services

(episode anchor) Inpatient hospital readmission

services Long term care hospital

services (LTCH) Inpatient rehabilitation facility

services Skilled nursing facility services

(SNF)

Home health agency services (HHS)

Hospital outpatient services Independent outpatient

therapy services Clinical laboratory services Durable medical equipment Part B drugs

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Private Payor Considerations

• Ability to develop contractual provisions– Compliance– Termination– Available and applicable waivers– Claims processing– Applicable restrictions

Bundled Payments

• Started engaging surgeons 5 months before project started– Weekly meetings; data; 1:1 meetings

• Shared baseline data early on so all new current situation and opportunity

• Included in design of gain share model, metrics, and dashboard design

• Saw need to hire colorectal NP navigator (dual role Bundled project and launch colorectal cancer center)

• Invested time in gaining surgeon consensus on order sets, processes and procedures

Top Initiatives to support project

• Engaged wide stakeholder groups – Nursing units– Administration– PI analyst– Finance– Case management– Coders– OR staff– Schedulers– Surgeon office staff– Primary care providers– LTC’s

Top Initiatives to support project

• Good engagement from surgeon groups• Good awareness and adherence to processes sets from

OR and nursing staff– OR staff asking about opening expensive items– Nursing staff and getting patients moving quicker and setting

discharge expectations

Positive Outcomes

• Internal cost savings being achieved– ICU LOS and overall LOS down– Cost per Case down (supplies in OR)– Decreased Surgical Site Infection

• Navigator working well– Patients like having navigator at the hub– Surgeons like navigator to round and provide updates and

recommendations

Positive Outcomes

Outcome Data (first four months)

Outcome Data (first four months)

Outcome Data (first four months)

Outcome Data (first four months)

Internal Cost Savings to dateMajor Bowel Procedures

CY 2012 Baseline (Inflated*)

Rollup starting Oct

2013

Medicare only

All Colon Bundle w/ Medicare Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14

n= 55 29 3 11 2 7 4 2

ALOS 7.7 7.1 5.7 9.1 4.5 6.7 7.25 2

Avg Cost/Case $19,712 $16,974 13,652 22,048 13,884 13,555 18,018 7,022

Avg Supply Cost/Case $5,186 $3,677 2,684 4,721 3,505 3,206 3,244 2,107

Mortality 0 1 0 1 0 0 0 0

Estimated Savings (green) -79,408 -18,181 25,694 -11,656 -43,100 -6,777 -32,402

ICU as part of stay

n= 15   11   2 5 1 1 2 0

ALOS for entire visit 12.6   9.4   5.0 12.0 4 8 10.5  

ALOS in ICU 2.8   2 1.0 3.0 1 2 3.5  

Avg Cost/Case for entire visit $30,453 $22,634 14,682 27,981 15,471 18,821 22,704  

Avg Supp Cost/Case entire visit $6,842 $3,478 2,665 4,181 3,427 1,469 3,563  

Avg Cost/Day in ICU $1,788 $1,802 1,775 2,027 1,408 1,534 1,598  

Avg Supply Cost/Day in ICU $87 $83 82 93 65 71 74  

Pts without Complications

n= 51 25   3 9 2 6 3 2

ALOS 6.5 6.4 5.7 7.6 4.5 6.5 7.3 2

Cost/Case $16,972 $15,364 13,652 18,312 13,884 12,677 20,153 7,022

Supply Cost/Case $4,629 $3,743 2,684 4,667 3,505 3,496 3,774 2,107

% Pts w/out Complications 92.7% 86% 100 82 100 86 75 100

• Major Bowel Procedures might not be the best to start with?– Challenges

• Identification/Coding– Surgeon called in to minor assist and it gets coded as

bundle despite “not theirs”- perforated bowel • Inclusion & Exclusion Criteria• Elective vs. Emergent Cases and no pre-op screening and

mitigation• Would have hired the NP earlier

Lessons learned and opportunities for growth

• Consensus takes time related to various surgeon practice preference related to training and beliefs

– Example- standardized antibiotic use, close vs. open decisions, use of wound vacs, how soon to do surgery vs. wait

• Surgeons who are on the bundled team are very engaged…they are not so good at getting the processes and information to their peers

– Requires going to offices periodically to review data metrics, and gain sharing

– Keeping them engaged is helps to have citizenship as part of gain share.

Lessons learned and opportunities for growth

• What/How is critical to helping manage? Nurse Practitioner, PI, Case Managers

• What’s missing or challenging?– Sometimes hard to know in the bundle or not?– Patients presenting in crisis so poor outcomes– Not able to take advantage of the SNF waiver due to the

nature of the surgery not being 3 day initial LOS and not doing any direct admits post op at this time due to so few readmits that would be stable

Miscellaneous

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Questions?

Bundled Payments