New Healthcare Delivery Models Under the Patient Care and Affordability Act Accountable Care...

New Healthcare Delivery ModelsUnder the Patient Care and Affordability

Act

Accountable Care Organizations and Beyond

Robert W. Markette, Jr. CHC, JDBenesch, Friedlander, Coplan & Aronoff, LLP

One American Square, Suite 2300 Indianapolis, IN 46242Phone: (317) 632-3232

[email protected]

New Care Delivery ModelsCenter for Medicare & Medicaid Innovation

Accountable Care Organizations (“ACOs”)

Hospital Bundled Payments Pilot Program

Bundled Payments for Care Improvement

Independence at Home Project (“IAH”)

Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents

Community Based Care Transitions Program

Web site http://innovations.cms.gov/

New Care Delivery Models

Goals:

• Reduce and control costs• Improve quality of care• Integrate and coordinate delivery of care• Deliver seamless, high quality care instead of the

fragmented care provide by FFS health care

These programs are likely to be driven by large hospital systemsand/or physicians’ practices.

Accountable Care Organizations

PPACA required CMS to establish a voluntary ACO program by January 1, 2012

• Promotes accountability for a patient population • Coordinates services under Medicare Parts A &

B• Encourages investment in infrastructure and

redesigned processes for high quality and performance standards


CMS issued Final Rule on October 20, 2011 – established requirements for the Medicare Shared Savings Program (“MSSP”)

MSSP will reward ACOs that:

• Lower health care costs• Meet performance standards on quality of

care


Entities eligible to form an ACO:

• ACO professionals (physician, PA, NP, CNS) in a group practice• Networks of individual ACO professionals• Partnerships or joint ventures between hospitals and ACO

professionals• Hospitals employing ACO professionals• Critical Access Hospitals• Federally Qualified Health Centers• Rural Health Clinics

Other healthcare entities may provide services through an ACO but not form their own and may not be used to assign patients to the ACO.


Formation• Providers come together to form ACO• Apply to CMS• Must meet all eligibility and program

requirements• Must serve 5,000 Medicare FFS patients• Agree to participate in MSSP for 3 years• An existing ACO will not automatically

be accepted


ACO Requirements:1. Be willing to become accountable for

the quality, cost, and overall care of assigned beneficiaries

2. Enter into a three year agreement with HHS

3. Have a formal legal structure to allow receipt and distribution of payments

4. Include sufficient primary care providers


5. Have at least 5,000 Medicare FFS beneficiaries assigned to it

6. Provide information to HHS to support the assignment of beneficiaries to ACO

7. Have a leadership and management structure in place

8. Define processes to promote evidence based medicine, patient engagement, reporting on quality and cost measures, and coordinating care

9. Meet patient centeredness criteria


An entity may be part of more than one ACO, as long as its TIN is not one that is used to assign beneficiaries.

Opens door for long-term care facilities, home health agencies, and hospice to be part of multiple ACOs.


“Beneficiary Assignment” – operational term needed to determine whether a beneficiary received sufficient level of requisite services from physicians in an ACO

• CMS will provide list of beneficiaries likely to receive care from ACO based upon primary care utilization during most recent period

• List will be updated quarterly based on current 12 month period

• CMS will reconcile list to reflect beneficiaries who met assignment criteria at the end of each performance year


Medicare Beneficiaries

• Only beneficiaries in the traditional Medicare FFS program under Parts A & B are eligible

• Participation in ACO is voluntary – no enrollment• Medicare ACOs must notify patients they are

participating in an ACO – must post signs and distribute notices

• ACOs can contact beneficiaries from CMS prospective list to notify them of participation and that ACO intends to request beneficiary’s identifiable data from CMS

• 30 day wait period – if no response – ACOs can obtain identifiable data


Legal Structure

ACO must be a legal entity for:• Receiving and distributing shared

savings• Repaying shared losses• Provider compliance with quality

criteria


Governance

ACO must maintain an identifiable governing body with authority to execute functions of ACO

1. Define processes to promote evidence-based medicine and patient engagement

2. Report on quality and cost measures3. Coordinate care


At least 75% control of the ACO’s governing body must be held by ACO participants.

Each participant must have proportionate control over governing body decision making.

Must include one Medicare beneficiary


Leadership and Management

• ACO managed by CEO/manager/general partner – must be subject to control of governing body

• Clinical management and oversight by senior-level medical director who is one of the ACO’s physicians – must be regularly onsite at one of ACO locations, board certified, and licensed in a state where ACO operates


Required Processes and Patient Centeredness

ACOs are required to implement proceduresfor the following:

1. Promoting evidence based medicine2. Promoting beneficiary engagement3. Internally reporting quality

and cost metrics4. Coordinating care


Patient CenterednessACO must demonstrate patientcenteredness by:1. Having a beneficiary experience of

care survey in place and describe how the ACO will use the results to improve care

2. Patient involvement in ACO governance


3. Process for evaluating health needs of the ACO’s assigned populations

4.System in place to identify and update high risk individuals must:

- promote improved outcomes for high risk and multiple chronic condition patients

- plan tailored to patients needs


5. Have a mechanism in place for the coordination of care (process

to exchange summary of care data when patient transitions)


6. A process to communicate clinical knowledge/evidence based medicine to beneficiaries in an understandable way

7. Process for beneficiary engagement/ shared decision making

8. Written standards for access and communication, including access to

records


9. A process to measure clinical performance by physicians

10. System in place to identify and update high risk individuals


MSSP – Methodology

• Providers and suppliers will continue to be paid for services in the same manner

• ACO will be eligible to receive shared savings payment if it meets quality performance standards and has generated shareable savings


MSSP Track 1:

• Only shared savings in excess of benchmark

• Sharing rate – up to 50% • Not held accountable for losses• Only in Track 1 for first agreement

period


MSSP Track 2

• More experienced ACOs• Will account for savings and losses• Higher performance payment limit – 15% of applicable year’s

benchmark• Higher sharing rate of up to 60%• Share losses if per capita costs are above updated benchmark

by amount equal to or greater than MLR – set at flat 2% • Liable for up to 60% of entire difference b/t updated

benchmark and actual expenditures for performance year• Actual amount varies based on quality performance• Rewards ACO with high quality score by reducing amount of

losses it owes to CMS• Loss sharing limit

• 1st year loss = 5% of benchmark• 2nd year = 7.5%• 3rd year = 10%


MSSP – Methodology – Step 1• Establish benchmark at beginning of each

agreement period• Benchmark surrogate measure of what

Medicare FFS Parts A & B expenditures would have been in absence of ACO

• Initial benchmark is risk adjusted using the CMS Hierarchical Condition Categories risk adjustment model

• Trend benchmark forward to third year by using national growth rate in Medicare Parts A & B expenditures for FFS beneficiaries


MSSP – Methodology – Step 1• CMS will weight most recent year of benchmark

• Benchmark year 3 = 60%• BY2 = 30%• BY1 = 10%

• Allows CMS to establish lower Minimum Savings Rates (“MSR”) & results in more accurate benchmark

• Each year CMS will update benchmark by projected absolute amount of growth in national per capita expenditures for Parts A & B


MSSP – Methodology – Step 2• Compare performance to benchmark to

determine shared savings/losses• CMS will create MSR (2% to 3.9%) – accounts

for normal variation • Track 1 – MSR accounts for normal variation

based upon # of assigned beneficiaries• MSR creates a corridor around benchmark that must

be met or exceeded to share in savings• If actual expenditures are lower than updated

benchmark and savings meet or exceed MSR, ACO will be eligible for shared savings


MSSP – Methodology – Step 2• Track 2

• MSR – no requirement to be based on number of assigned beneficiaries

• Minimum Loss Rate (“MLR”) is established to determine if ACO is responsible for shared losses

• MSR & MLR set at flat 2%• Lower MSR balances risk that ACO will achieve

savings• Actual expenditures must be lower than the updated

benchmark to be eligible for shared savings• If actual expenditures are higher than the

benchmark and losses meet or exceed MLR, a loss is incurred = no shared savings


MSSP – Methodology – Step 3• Determining sharing rate and shared

savings• CMS will apply sharing rate, determined

for each ACO based on its quality performance, to the difference between the updated benchmark and actual expenditures

• ACO will share in savings at this rate, on a first $ basis up to performance payment limit

MSSP – Methodology – Step 3• Track 1:

• ACO may earn sharing rate up to 50%• Performance payment limit = 10% of Part A

& B updated benchmark

• Track 2:• May earn sharing rate up to 60%• Performance payment limit = 15% of Part A

& B updated benchmark


Quality and Continuous Improvement

CMS will define quality goals and improvement goals for ACOs.

ACO must meet these goals to qualify for shared savings.


Quality Performance Scoring

33 measures from 4 “domains”

1. Patient/Caregiver Experience of Care2. Care coordination/Patient Safety3. Preventative Health4. At-Risk Population

Measures align w/ other CMS programs – Physician Quality Reporting System, EHR Incentive Programs, National Quality Strategy, Million Hearts Initiative


Patient/Caregiver Experience• Getting timely care, appointments

& information• Physician communication• Patients’ rating of physician• Access to specialists• Health promotion & education• Shared decision making• Health status/functional status


Care Coordination/Patient Safety• Risk-standardized, all condition readmission• Ambulatory sensitive conditions admissions

– COPD• Ambulatory sensitive conditions admissions

– CHF• Percent of PCPs who successfully qualify for

an EHR Incentive Program Payment• Medication Reconciliation – after discharge

from an inpatient facility• Screening for fall risk


Preventative Health • Influenza immunization• Pneumococcal Vaccination• Adult weight screening & follow-up• Tobacco use assessment & cessation

intervention• Depression screening• Colorectal Cancer screening• Mammography screening• Proportion of adults who had their blood

pressure measured w/i preceding 2 yrs


At Risk Population• Diabetes

• Hemoglobin A1c control < 8%• Blood pressure < 140/90• Low density lipoprotein < 100• Tobacco non-use• Aspirin use• Hemoglobin A1c poor control > 9%


At Risk Population• Hypertension

• Blood pressure control

• Ischemic vascular disease• Complete lipid profile & LDL control < 100 mg/dl• Use of aspirin or other antithrombotic

• Heart Failure• Beta-blocker therapy for left ventricular systolic

dysfunction


At Risk Population• Coronary artery disease

• Drug therapy for lowering LDL cholesterol

• Angiotensin-converting inhibitor or angiotensin receptor blocker therapy for patients with CAD and diabetes and/or left ventricular systolic dysfunction


Quality Performance Scoring

• 1st performance yr – quality performance standard = complete & accurate reporting for all measures

• Subsequent yrs – quality performance will be phased in - ACOs will be eventually be assessed on performance


Quality Performance Scoring• Pay for Performance Phased In

• Yr 1 – pay for reporting all 33 measures• Yr 2 – pay for performance = 25

measures – pay for reporting = 8 measures

• Yr 3 & beyond – pay for performance = 32 measures – pay for reporting = 1 measure


LTC Facilities, HHAs & Hospice

You will most likely not be starting an ACO.

You will need to be prepared to have arelationship with ACO.

ACO will be a referral source.



Developing relationships:1. Identify potential leaders in your area2. Review existing relationships w/ hospitals and

physician groups that might be forming ACOs 3. Make sure you get a seat at the table4. Show them what you can offer & how you can

add value



Key areas:

1. Quality – reduce rehospitalizations, improved post-acute outcomes, patient satisfaction; etc.2. Make sure you understand the quality measures and how they might be used3. Review your current policies/procedures related to how you deal with post acute patients – update if need to incorporate more quality goals



Key areas:

4. Patient Centeredness – communicating to patients, chronic

patient care, patient satisfaction



Key areas:

6. Cost savings – getting patients out of hospital and into post-acute care, when done properly, saves everyone money



Providers that can make this case to ACOleaders will be the ones that are included.

You will need to be proactive in making your case.

Hospital Bundling

• Hospital centric model focused on an episode starting three days prior to admission and continuing for thirty days post discharge.

• Built around the “entity”. Entity will have a hospital plus post acute providers.

Hospital Bundling

• Payment methodology must not result in greater expenditures per beneficiary.

• Payment shall be comprehensive and cover the costs of applicable services and other appropriate services.

• Services paid for by the pilot project shall be provided or directed by the entity.

Hospital Bundling

Additional Post-Acute Care Services

Secretary to determine procedures for providing additional post-acute care services after the “episode.”

Hospital Bundling

HHS will develop quality measures for theepisode of care and for post-acute care.

Required measures:functional status improvement;reducing rates of avoidable hospitalreadmissions;

Hospital Bundling

Required measures:

• Rates of discharge to the community• Rates of post hospitalization ER admission• Incidence of infection• Efficiency measures• Measures of patient centeredness• Measures of patient perception of care• Other measures including outcomes

Hospital Bundling

These required measures are important to post-acute care providers, because these are issues hospitals are going to care about.

Start preparing now to make your case around these measures.

Hospital Bundling

MAIN CONCERN: Hospital controls payments

• This project looks at controlling costs by placing hospital in charge of the money.

• Hospital will pay post acute providers.

• Project does not start until 2013.

Hospital Bundling

Preparing for hospital bundling will be a lotLike preparing for ACOs.

1. Building relationship with hospital

2. Quality will be important

3. What you can do for the hospital

Hospital Bundling

Risk:

Will providers agree to lower rates to “getFoot in the door?”

This might give larger agencies an advantage.

Bundled Payments for Care Initiative

Propose – using a bundled model for limited situations – heart attacks, hip replacements, etc.

Initiative has 4 models.

Hospital Bundling

Interested entities can apply to participate in one of the four models.

There are three retrospective models and one prospective model.


The models:

1. Retrospective Acute Hospital Stay Only

2. Retrospective Acute Care Hospital Stay plus Post-Acute Care

3. Retrospective Post Acute Care Only

4. Acute Care Hospital Stay Only


Post-acute care providers are eligible to participate in Models 2 & 3.

Model 3 would allow post-acute care provider to apply as the bundling entity.

Provider has to designate length of episode – minimum of thirty days.

Provider has to designate amount of discount to CMS.


Model also requires entity to designate eligible beneficiaries, by MS-DRG and excluded unrelated services.

NOTE: CMS will give preference to applications that propose an episode longer than thirty days.


Gain sharing is allowed, but providers are expected to provide evidence of active participation by physicians and other practitioners.


Payment in this model:

Payment will be made under normal PPS rules, with a regular retrospective reconciliation against the target price.



If reconciliation shows the target price was exceeded, the awardee will be responsible for repaying Medicare.



IMPORTANT: The awardee “bears full risk for any expenditures beyond the target price of the episode.”



If reconciliation shows the care was delivered for less than the target price, difference will be paid to the awardee.


Models 1 – 3 use a retrospective reconciliation process.

Medicare pays, then compares amounts paid to “target price.”

CMS is looking for “highly competitive” discounts.


Model 3 bundled payment will include payment for Physician’s services, inpatient hospital readmission; Long Term Care hospital services, IRF services, SNF services, HHA services, outpatient therapy, lab services, DME, and Part B Drugs.


Model 3 creates potential to put post-acute care providers in control of a bundled payment.

Need to be able to figure out “target price.”


Awards are for an initial three year period.

Possible to extend for an additional two years.

CMS is considering appropriate waivers of fraud and abuse laws in order to allow this project to move forward.


RFA states specific requirements for gain sharing as part of this bundling program.

Detail

How savings shared

Cannot reduce or limit medically necessary services

Transparent and auditable

Physician participation is voluntary


Gain sharing Payment methodology:

Not based upon volume or value

may not exceed 50% of amount normally paid to physicians

comprehensive plan for distributing awards

Independence at Home

• This is a physician/nurse practitioner pilot project.

• Three year demonstration – covering not more than 10,000 beneficiaries.

• Began in January, 2012.


Project to test whether model which is

1. Accountable for providing comprehensive, coordinated, continuous, and accessible care tohigh need populations at home

Can achieve certain goals.


Goals:

1. Reduce preventable hospitalizations2. prevent hospital readmissions3. reduce emergency room visits4. improving health outcomes5. improving efficiency of care6. reducing costs7. achieving beneficiary and family

satisfaction.


Eligible patients must have:

Two or more chronic conditions

Two or more functional dependencies

At least one non-elective hospitalization in prior 12 months.


Chronic Conditions:

congestive heart failurediabetesCOPDischemic heart diseasestrokeAlzheimer’sothers designated by Secretary

Independence at Home Medical Practice

Independence at Home Medical Practice is the center piece of the IAH project.

Remember: focus is on primary care at home.


“A legal entity that is comprised of an individual physician or nurse practitioner or group of physicians and NPs that provides care as part of a team that includes physicians, nurses, physician assistants, pharmacists, and other health and social services staff.”


“Organized at least in part for purpose of providing physician services; Has documented experience in providing home-based primary care to chronically ill “high cost” beneficiaries;At least 200 beneficiaries;Uses technology;Other defined criteria


PPACA expressly allows for physician’s assistants and nurse practitioners as long as requirements of Act are met; NP or PA practices consistent with state law; NP or PA has requisite experience and training.


IAH also allows for use of affiliated providers, such as RNs and social workers.

By the IAH Medical Practice

Independence at Home – Cost Savings

Medicare will establish a spending target.

If entity provides care to patients for the year for less than the target amount, entity will receive portion of that saving back as an incentive payment.


Definitions do not appear to allow for home

health agencies as providers.

During open door telephone call, a numberOf providers asked CMS to include homeHealth agencies.

Independence at Home and Home Health

Some thoughts:

At a minimum, IAH medical practice is a potential referral source.

Post-acute providers plays a role in quality, avoiding hospitalizations, etc.

Make that case to physicians.


Some thoughts:

Potential to establish a practice?

State regulatory issues.

Reimbursement issues.

May be a difficult road.


Some thoughts:

Long term: this is another step in establishing the home as the place to provide medical services. HHAs have more experience in this area than any other provider.

Initiative to Reduce Avoidable Hospitalizations

CMS will partner with non-LTC facility, independent organizations (enhanced care & coordination providers “E&C Providers”) to implement evidence-based interventions that reduce avoidable hospitalizations for LTC facilities’ residents.


E&C Providers will:

• Collaborate w/ States & LTC facilities• Implement intervention in at least 15 LTC facilities (can’t:

have >25% of residents In Medicare managed care, be hospital-based, special focus facility, no outstanding IJ)

• Hire staff who are present at LTC facilities & work with LTC facility staff to implement preventative services

• Work in cooperation with existing providers• Facilitate residents’ transition from hospitals to nursing

homes• Provide support for improved communication & coordination

among existing providers• Coordinate & improve management and monitoring of Rx

drugs


• Will likely be one award per State• E&C Providers that meet operational performance

parameters, are eligible to receive funds from the Payment Management System on monthly basis• Will be determined based upon a per facility fee

• E&C Providers cannot separately bill Medicare/Medicaid for services at the facilities

• E&C Providers eligible for supplemental funds – based on specific criteria related to:• Reduction of hospitalizations• Quality of care• Minimal survey deficiencies


• Awards per E&C Provider = $5 - $30 million

• Cover 4 yr agreement• 7 awards• Awards given by August 23, 2012• Application process under way

Community-based Care Transitions Program

• Community-based Organizations (“CBOs”) will use care transition services to manage Medicare patients’ transition from hospital to post-acute care providers

• Will be paid all inclusive rate per eligible discharge based on the cost of the transition services provided at the patient level and implementing changes at the hospital level

• Transition services must be provided across the continuum of care

• Must have formal relationship w/ hospitals and other providers along continuum

Community-based Care Transitions Program

• CBO must be present in community it serves

• Must be legal entity that can accept payment for services

• Must have governing body w/ healthcare stakeholders and consumers

• Program will run 5 yrs• Application process under way

Conclusion

PPACA contains several new care deliverymethods that will impact home health andhospice

Providers need to be prepared to maketheir case to these entities in order to bepart of the future.

Conclusion

Focus will be on:

Quality – reducing hospitalizations

Efficiency – doing more for less

Cost Savings

New Healthcare Delivery Models Under the PPACA

Legal Disclaimer:

The materials and opinions presented by the speaker at this session represent the speaker’s views, are for educational and informational purposes only, are not intended to be legal advice and should not be used for legal guidance or to resolve specific legal problems. The speaker expressly reserves the right to advocate other positions on behalf of clients. In all cases, legal advice applicable to your organization’s own specific circumstances should be sought.

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