Melinda S. Hancock, FHFMA,CPAPartner, DHG Healthcare 2015-16 Chair, HFMA
September 2015
HFMA Maine Chapter2015 Annual Meeting
Objectives of Today’s Presentation
• Identify key trends in healthcare finance
• Describe how these trends impact healthcare finance professionals
• Discuss strategies for success in the current healthcare environment.
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Go Beyond the Status Quo
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“It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.”
Muhammad Ali
Shaping the Curve
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It’s Been 5 Years…Still Divided?
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Medicare Spend Flattens
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The Unexplained Gap
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CMS Accelerates the Tipping Point for Everyone
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2011 2015 2016 2018
Traditional, Fee for Service Alternative Payment Models
“…HHS goal of 30 percent traditional FFS Medicare payment through alternative payment models by the end of 2016… 50 percent by the end of
2018” HHS Press Office 1-26-15
85% of payment tied to quality and value metrics (ex. Hospital Value Based Purchasing, Hospital Readmission Reduction Program)
Category 1: Fee for Service—No Link to Quality
Category 2: Fee for Service—Link to Quality
Category 3: Alternative Payment Models with Fee For Service Base
Category 4: Population-Based Payment
• Payments are based on volume of services and not linked to quality or efficiency
• At least a portion of payments vary based on the quality or efficiency of healthcare delivery
• Some payment is linked to the effective management of a population or an episode of care
• Payments still triggered by delivery of services, but opportunities for shared savings or 2-sided risk
• Payment is not directly triggered by service delivery so volume is not linked to payment
• Clinicians and organizations are paid and responsible for the care of a beneficiary for a long period (e.g., >1 year)
• Limited in Medicare fee-for-service
• Majority of Medicare payments now are linked to quality
• Hospital value-based purchasing
• Physician Value-Based Modifier Readmissions/Hospital Acquired Condition Reduction Program
• Accountable care organizations • Medical homes • Bundled payments
• Eligible Pioneer accountable care organizations in years 3-5
• Some Medicare Advantage plan payments to clinicians and organizations
• Some Medicare-Medicaid (duals) plan payments to clinicians and organizations
Another Way of Looking at This
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30% by end of 2016 & 50% by end of 2018 of this category
85% by 2016 and 90% by 2018 of this category
Des
crip
tion
Exam
ples
Source: Rahul Rajkumar, MD, JD; Patrick H. Conway, MD, MSc; Marilyn Tavenner, RN, MHACMS- Engaging Mulitple Payers in Payment Reform. JAMA. 2014;311(19(:1967-1968
The Continuum of Financial Risk
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Source: Hancock, M., Hannah, B. “Determining Your Organization’s Risk Capability”, hfm magazine, May 2014.
Go Beyond Current Use of Technology
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“Under payment models that reward efficiency and high-quality care, if a hospital or health system is losing money due to inadequate clinical performance, it cannot afford to wait one or more months to find out the problem. Healthcare leaders should understand how their organizations are performing today so they can take corrective action before revenue loss becomes a hemorrhage.”
~John Glaser, CEO, Siemens, hfm magazine, May 2014
New Technology• Clinical technology
• Personalized medicine, new drugs, new treatments• Shift to ambulatory, less invasive, new modalities
• Health IT• From EHRs to advanced health information infrastructure• Rise of personal devices as key platform for healthcare delivery
and coordination
Big Data – Big Deal?
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$600To buy a disk drive that can store all of the world’s music
6.8 BillionCell phone subscriptions in 2013 including more subscriptions than people in the US (327M vs 318M)
30 BillionPieces of content shared on Facebook permonth
60% Potential increase in retailers’ margin possible with big data
40%Projected growth in global data generated per year
vs. 5% Growth in global IT spending
$300 billionAnnual value to U.S. health care of “big data” – 2x total annual healthcare spend of Spain
1.5 millionMORE data savvy managers needed to take advantage of big data in the United States
Source: McKinsey Global Institute Analysis
How Do Top Performers Use Analytics?
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Compare your organization to the top performers.
Capability Progression:Where Is Your Organization?
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Estimated Long-Term Value of “Big Data” Levers
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Clinical Operations
Accounting & Pricing
Public Health
New Business Models
Research & Development
$165 Billion
$108 Billion
$47 Billion
$100 Billion $200 Billion $300 Billion
Outcomes & Cost AnalyticsClinical DecisionsTransparency of Medical DataRemote MonitoringAdvanced Profile Analytics
Fraud DetectionOutcomes Based Pricing
Predictive ModelingBig Data Clinical TrialsPersonalized Medicine (Genome)Analyzed Disease Patterns
Source: McKinsey Global Institute, “Big Data”, p. 50
Go Beyond Current Experiences
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Summary of Innovation Models
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Accountable Care Episode Based Payment Initiatives
Primary Care Transformation Medicaid & CHIP Population To Accelerate Testing
of New ModelsSpeed Adoption of
Best Practices
ACOs BPCI Models 1-4 Advanced Primary Care Initiatives
Reduce AvoidableHospitalizations for NF residents
State Innovation Models :Round 1 & 2
Beneficiary Engagement Model
Advanced Payment ACO ACE Demonstration Comprehensive Primary
Care InitiativeFinancial Alignment Incentive for
Medicare & MedicaidFrontier Community Health Integration
Community Based Care Transitions
Comprehensive ESRD Care Initiative
Oncology Care Model
FQHC AdvancedPrimary Care Practice
Strong Start for Mothers & Newborns Maryland All Payer Health Care Action and
Learning Network
ACO Investment ModelSpecialty
Practitioner Payment Model
Graduate Nurse Education
Medicaid Innovation AcceleratorProgram
Health Care Innovation Round 1&2
Innovation Advisors Program
Next Generation ACO Model
Comprehensive Care for Joint Replacement
(CCJR)
Independence at Home Medicaid Prevention of Chronic Diseases
Health Plan Innovation Initiatives Million Hearts
Pioneer ACO Multi Payer Advanced Primary Care Practice
Medicaid Emergency Psychiatric Demonstration
Medicare Care Choices Award Partnership for Patients
Rural Community Hospital Demonstration
Transforming Clinical Practice
Medicare IVIG Demonstration
http://innovation.cms.gov/initiatives/#views=models
Anticipated Penetration of Value-Based Payment
Financial Impacts on Efforts to Date
Perceptions on Enabling Readiness
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Becoming Risk Capable
Reform Across the Continuum
SNF Value Based Purchasing (VBP)Star RatingAlt Pmt Models- Hi End
HHVBPStar RatingAPMs- Low End
VBP/RRP/HACVBPM/PQRS/MIPSMeaningful UseComp Care For Total JointsStar Rating Roll out
Advanced Payment Models: Commercial/Medicare/State
Larger share of $TransparencyAbility to shop
HFMA Value Project Research
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hfma.org/valueproject
Go Beyond Current Models of Collaboration
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Creation of Vivity
Key Elements:• No deductible• Move away from FFS• Shared care mgmt.• Common EHR• Joint wellness services• Shared financial
risk/gain
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Anthem partnered with 7 major hospitals to form Vivity.
HFMA Is Reaching Out
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hfma.org/physician hfma.org/healthplan
Go Beyond Current Thinking: Quality
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And Now We Present…
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In Place Now:Nursing Facilities Hospital HCAHPS (Added Spring 2015)Dialysis CentersMedicare Advantage PlansHome Health Agencies (Started July 2015)
Coming Soon:Overall Hospital Rating (expected 2016)
ORIENTATION CALL
PRE-VISIT DOC
REQUEST
INTRO MEETING
VERIFICATION PROTOCOL
IMPROVEMENT STRATEGIES
EXIT INTERVIEW
FINDINGS REPORT
ON SITE VERIFICATION GOALS
Refine and finalize verification protocol
Disseminate ideas to use the survey and results in quality improvement
Collect feedback from hospitals on how Leapfrog can make the survey and the display of survey results more actionable so they can be used even more effectively in quality improvement
Develop and test a business model to sustain the national roll-out of the on-site data verification program
Transparency: Quality and Price
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“Participants repeatedly said they wanted to see a resource, or ask their doctor, to better understand what a particular test or procedure would cost before they agreed to it, and wanted to comparison shop among providers when possible. They said that they also wanted the ability to know what a treatment should cost before they agreed to it, and needed more transparent information on price in order to do this….They were very interested in efforts to share information on price and quality.”
Source: Robert Wood Johnson Foundation. Consumer Attitudes on Healthcare Costs: Insights from Focus Groups in Four U.S. Cities. Jan. 2013. http://www.rwjf.org/en/library/research/2013/01/consumer-attitudes-on-health-care-costs--insights-from-focus-gro.html
Failing Grades
31http://www.catalyzepaymentreform.org/images/documents/2015_Report_PriceTransLaws_06.pdf
Patient Perspective
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Timeline of Performance Periods
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Penalties and Pay for Performance
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Value-Based Care Programs: United
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$10
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$70
Value-Based Payments
2015 2018
$65B in Value Based Contracting by 2018YE – 30% of commercial claims
Shared Savings
Shared Risk
Capitation + PBC
Condition or Service-Line
Programs
Performance Based
Contracts
Primary Care
Incentives
Fee-For-Service
Achieving specific
METRICS
Managing a specific
CONDITION orSERVICE LINE
Managing entire POPULATION HEALTH
$43B in Value Based Contracting by 2015YE
Performance-Based Programs
Episodes Service
Line Programs
Accountable Care Programs (ACOs)
Degree of Care Provider Integration and Accountability
Leve
l of F
inan
cial
Inte
grat
ion
Innovation and Strategic Integration
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SYSTEM/FACILITY STRATEGIC PLAN
PAYMENT MODELS
CLINICALLY INTEGRATED NETWORKS/POST ACUTE CARE NETWORKS
Mandatory Reform Elements
Managed Care/Direct to Employer Opportunities
Go Beyond the Acute Care Space
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Physician Penalties Arrive
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SOURCE: Medical Group Management Association (MGMA) 2014
Year/Program eRX PQRS Meaningful Use
Value Modifier MIPS
2012 -1.0%
2013 -1.5%
2014 -2.0%
2015 -1.5% -1.0%* -1.0%
2016 -2.0% -2.0% -2.0%
2017 -2.0% -3.0-5.0%**(each year) -4.0%
2018*** up to -4%
2019*** up to -5%
2020*** up to -7%
2021*** up to -9%
* Penalties will be greater for unsuccessful e-prescribers** Penalty amount could increase up to 5% depending on meaningful use success rates***MIPS information is estimate only
The Penalty Phase
MACRA: Physician Payments• Payment rates for 2015-2019 will be .5% annually and then frozen
2020-2025. Thereafter tiered .25% (MIPS participants) or .75% (APM participants).
• Creates MIPS: Merit-Based Incentive Payment System
– Starts 2019 & combines EHR incentive program, PQRS and VBPM
• Develops 4 categories of measures
– Quality, Resource Use, Clinical Improvement, & EHR Use
• Range of payment adjustments
– In 2019: -4% to +12%
– In 2027: -9% to +27%
• Program is budget neutral
• Allows providers in Alternative Payment Models (APMs) to opt out of MIPS and can be eligible to receive 5% lump sum bonus 2019-2024
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SNF Value-Based Purchasing
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• One year performance periods and baseline
• Requires 2 metrics: all cause readmissions and preventable readmissions
• Effective 10/1/18, with a 2% withhold
• Part of SGR fix in 2014 so not budget neutral: only 50%-70% to be returned to SNFs
• Same formula as hospital readmissions penalty
Medicare: Home Health Agencies1. Announced in July the start of Star Ratings2. Low spend providers in APMs3. On July 6, 2015, CMS proposed the HHVBP• Authorized by the ACA and implemented by CMMI as of
1/1/16 with the first payment year to be 1/1/18. Baseline year is CY15.
• Comments due by Sept. 4, 2015• Will be among all HHAs in 9 states: random selection
• Mass., Md., N.C., Fla., Wash., Ariz., Iowa, Neb., Tenn.
• Payments adjusted (performance year) Year 1 CY16 and 2 CY17: 5% Year 3 CY18: 6% Year 4 CY19 and 5 CY20: 8%
Go Beyond the Numbers
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What Engagement Means in This Context
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Adaptation of Max Weber’s typology of social action can be applied in many venues of change for health care.
1. To engage in a noble shared purpose
2. To satisfy a self interest
3. To earn respect
4. To embrace tradition“In the face of ever-increasing complexity, the hard work and best intentions of individual physicians can no longer guarantee efficient, high-quality care. Fixing health care will require a radical transformation, moving from a system organized around individual physicians to a team based approached focused on patients. “- Engaging Doctors in the Health Care Revolution, Thomas E. Lee, MD and Toby Cosgrove, MD
Help Consumers Make Sense of the Numbers
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hfma.org/dollars
Equip Staff for Success in the Consumerism Era
• Agenda for live training on site for your patient access staff
• Slide deck that can be customized
• Sample financial policies
• Coaching guidelines
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hfma.org/dollars
Educate Consumers
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• Describes how to request price estimates, step by step
• Clarifies what estimates may or may not include
• Explains in-network and out-of-network care
• Defines key terms
• New: Provides information on assessing healthcare qualityhfma.org/consumerguide
Go Beyond Comfort Zones
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Certification Reflects Strategic Importance of Finance
• Closely aligned with contemporary healthcare business environment
• Designed for financial professionals, clinical and nonclinical leaders, and payers
• Emphasizes the learning needed to shape the business environment
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Stay Up to Date
• hfma.org
• Daily and weekly online news
• Social media– Facebook
• HFMA Forums
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In Conclusion…
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Summary of Potential Next Steps
• How are you performing on VBP/RRP/HAC and what is your exposure for the upcoming years?
• What other value based contracts do you have and what are the performance periods?
• Check on your Star reports in your Qnet?• What are your quality and transparency strategic
plans?• What other pieces of the continuum do you
impact?• How do you and your teams GO BEYOND?
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