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Evaluating, Developing and Operating Bundled Payment Programs
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WHO AM I
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FOUNDED:
1998FOUNDED:
2006FOUNDED:
1999FOUNDED:
1990
are now…
FOUNDED:
2016
are now…
FOUNDED:
2000
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CONNECTS
all
components
of the revenue
cycle
FULLY
INTEGRATES
technology
systems ENSURES
SEAMLESS
coordination of
the financial
and clinical care
of the patient
a new kind of revenue cycle management company
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# of
Episodes Episode Methodology Includes Examples
1Chronic Care Episode
(manages multiple chronic
conditions)
7 chronic conditions
Circulatory care episode that coordinates the care for multiple chronic
conditions, including diabetes, heart disease, hypertension, and
hyperlipidemia
1 Perinatal Episode6 MS-DRGs as episode
anchors
Pre and post-delivery services, with Vaginal Delivery or Cesarean
Section
35 Acute Care Episodes93 MS-DRGs as
episode anchorsJoint replacements, renal failure, congestive heart failure, pneumonia
21 Proprietary Episodes 21 episodes
Hip replacement, angioplasty and endoscopy; acute medical events
such as stroke, heart attack and pneumonia; chronic conditions
including diabetes, congestive heart failure, and coronary artery
disease; and pregnancy
48CMMI Bundled Payment
for Care Improvement
(BPCI) Episodes
179 MS-DRGs as
episode anchors
Congestive heart failure, pneumonia, joint replacements, diabetes,
stroke, sepsis, and UTI
1 CJR Episode4 MS-DRG Subgroups
469 and 470Joint replacements
3 EPM Episodes 3 EpisodesHeart attacks (AMI and PCI); Bypass surgery (CABG); Hip/femur
fractures (SHFFT)
109 Total Episodes
INTRO• nThrive has developed the largest number of episodes in the industry (109 episodes).
• Commercial episodes represent 40% of inpatient spend.
• nThrive’s technology also allows for the creation and management of custom episodes.
p. 5
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Heart/VascularCongestive Heart Failure
(CHF) Heart Failure & Shock Hospitalization
Acute Myocardial Infarction
(AMI)
Acute Myocardial Infarction
Hospitalization (Discharged Alive)
Coronary Artery Bypass
Graft (CABG)
Coronary bypass with PTCA
Coronary bypass with cardiac
catheterization
Coronary bypass w/o cardiac
catheterization
Other cardiothoracic procedures
Cardiac Valve Replacement
Cardiac Valve Replacement with
cardiac catheterization
Cardiac Valve Replacement w/o
cardiac catheterization
Percutaneous Coronary
Angioplasty (PCI)
Percutaneous coronary angioplasty
with drug-eluting stent
Percutaneous coronary angioplasty
with non-drug-eluting stent
Percutaneous coronary angioplasty
without coronary artery stent
Neuroscience
Stroke
Acute ischemic stroke w use of thrombolytic
agent
Intracranial hemorrhage or cerebral infarction
Nonspecific CVA & precerebral occlusion
Orthopedic
Hip/Knee
Replacement
Major joint replacement or reattachment of
lower extremity
Bilateral or multiple major joint procs of lower
extremity
Spinal Fusion
Combined anterior/posterior spinal fusion
Spinal fus exc cerv w spinal curv/malig/infec
or 9+ fus
Spinal fusion except cervical
Cervical spinal fusion
INTRO: Designed 20 Episodes related to 8
Most Common Disease or Procedure
Conditions
p. 6
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BPCI
• Target prices are set based on hospital’s historical performance only
• Price is set for each MS-DRG (e.g. 469, 470)
• Prices are not adjusted for quality outcomes
CJR
• Target prices are set on blend of hospital and regional data, transitioning to regional standard prices over 5 years period
• Price is set for the combination of MS-DRG and major risk factor (e.g. hip fracture)
• Prices are adjusted for quality outcomes
EPM
• Target prices are set on blend of hospital and regional data, transitioning to regional standard prices over 5 years period
• Additional complex episode scenarios are adjusted in pricing
• hospital-to-hospital transfer
• CABG readmissions in the AMI model
• Presence or absence of AMI in the CABG model
• Prices are adjusted for quality outcomes
INTRO: Designed Episodes for Each of
the CMS Acute Inpatient Bundles
p. 7
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What Is Bundled Payment – FFS vs. FFV, fixed price, and the right accountability
Where we are as an industry with Bundled Payment
Group Interest – Where?
BPCI, CJR, EPM
Benefits (or risks from inaction):
- Potential profit
- Capture market percentage
- Increase market size
- (Example on Next Slide)
INTRO
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But Complications ExistFour things thwarting value-based care: EY
1. Increasing costs of care due to inefficiency. Lack of integration across health systems and the fee-
for-service contract structure has led to inefficiencies and wasteful spending, EY notes.
2. Workforce challenges. Finding, retaining and engaging staff is an ongoing challenge — only 12
percent of respondents said clinical ancillary staff was highly engaged and 8 percent said administrative
staff was highly engaged. This can erode the patient experience and lead to burnout for nurses and
physicians, who respondents ranked as highly engaged.
3. Lack of standards to measure and define quality. Providers do not consistently measure
outcomes and quality, and sometimes do not measure them at all, according to EY. These practices
have led to inconsistencies and can put patients at risk for medical errors, according to the report. Fifty-
eight percent of respondents have initiatives underway to reduce medical errors and 18 percent have
patient safety initiatives planned for this year.
4. Poor working relationship between providers, payers and regulators. Payers and providers are
struggling to meet cost and outcomes demands in the current environment while structuring contracts to
progress toward a value-based future.
(Might I add that Poor relationships = Poor data, which you need for bundled pay management)
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JUST THE LAST MONTH
An Exciting Time for Data
Systems are also being developed to
assess diabetic retinopathy (a cause of
blindness), stroke, bone fractures,
Alzheimer’s disease and other
maladies.
This year, for instance, the U.S. Food and Drug Administration approved a deep-learning approach from the start-up Arterys for visualizing blood flow in the heart; the purpose is to help diagnose heart disease.
a Stanford University
study published in January in the
journal Nature used deep neural
networks to diagnose skin cancer from
medical images. The software’s
performance was on par with 21
dermatologists, the study’s authors
wrote.
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Predictive Modeling in Episode of
Care
We do it for costs, readmits. Developing for more right
now.
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Assess
Design
Contract
Workflow
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TLDR:
- Get data and analyze the heck out of it now and in
the future (and make sure you have the skills)
- Start focusing on integration, and keep focusing
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Assess
Design
Contract
Workflow
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Assess: Vision
p. 16
Possible Reasons
- Improve Quality & Outcomes - reduce readmissions)
- Enhance revenue
- Improve the patient experience
- Patient Service Line Efficiency
- Emphasis on Accountable Care
- Maximize resources of new facilities
- Improve access across the continuum
- Growth across region or network
- Improved clinical insights
- Improve efficiency / reduce costs
- Increase workforce capability / quality
- Government mandate
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Assess: Current State Under Episode
Model
p. 17
• How much would episode costs be currently?
• What is my service distribution across episodes?
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Assess: Stakeholder Readiness
p. 18
- Who is for / against? Who perceives they will gain /
lose?
- Who leads…
- Innovation
- Physician Champion for bundled payment
- Quality
- Executive Sponsorship
- Oversight
- Impact of M&A?
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Assess: Finances
p. 19
- Financial KPI’s
- Current and Possible Margin / Case
- Current and Possible Cost / Case
- Satisfaction Indices
- “Fat” removal
- Model target financial futures based on comparable bundles
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Assess: Integration
p. 20
- How sufficiently Integrated are we?
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Assess: Partner Performance
p. 21
- How well do our partners perform?
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Assess: Post-Acute Alignment
p. 22
• How well-aligned is your network?
• Do you know where your patients are going?
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Assess: Physician Performance
p. 23
• Are they performing well?
• Are they incentivized to go from FFS to FFV?
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Assess: Risk
p. 24
• Episode Risk Profiles
• Outlier Risks
• Outlier causes
• Population Risk /
Homogeneity
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Assess: Competitive Advantage
p. 25
- What are you good at?
- What can you control?
- Where is your high volume?
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Assess
Design
Contract
Workflow
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- Patient identification (trigger mechanism, etc.)
- Length of episode: Pre episode period, episode start date,
episode end date.
- Patient Exclusions
- Included and excluded services
- Principal Accountable Provider
- Core Services
- Quality Metrics
- Payment Model
Design Considerations: Formal Bundle
Definition
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- Remember: More Scope =
- More Risk
- More Control
- More Potential Upside
- Scope does not necessarily equal population size
- How much chronic vs acute?
Design Considerations: Scope
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Beckers Hospital: Bundled payments 101: 4 steps to develop, implement and operationalize a bundled payment strategy (Feb. 2017)
Step 1: Unlock access to your claims data
Step 2: Use claims analytics to develop your bundled payment strategy
Step 3: Collaborate transparently with your provider network
Manage your provider network with three levels of analytics:
View performance by practice and provider
Understand specific member scenarios and identify any potentially avoidable costs
Review provider benchmarking report for peer-to-peer analysis
Step 4: Operationalize your bundled payment strategies
Design Considerations: Getting at the
Data
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- Do you own or manage your own health plans?
- Do you have ready access to health plan payor data? Rx data?
- Post-adjudicated?
- Are any quality initiatives in place between the health plan and the health system?
- 3rd-party data sets (Truven, etc.)
- Without this data, you’ll struggle to get very far
Design Considerations: Getting at the
Data
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- Analyze possible bundle finances
- Perform scenario models
- Discover populations
- Develop risk profiles
- Report Physician and Partner Performance
- And more – all of which is helpful in understanding your
operating environment, market, capabilities, and ideal potential
bundles
Design Considerations: What to Do With
the Data
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- Homogenous? Disparate?
- Remember – use your claims data to understand your
populations’ key characteristics
- Will help you define bundles that you can provide while
mitigating risks or intelligently accepting risks you can’t avoid
Design Considerations: Patient
Population
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- Do you have what it takes (providers / facilities / capabilities /
etc.)
- What bundle definitions will work bet with your mix of providers,
patients, and quality initiatives?
- Would you if you worked with someone else (JV)?
Design Considerations: Organization
Capability
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- In the shift to a flat-price, consumer-focused model, would
providing non-medical services round out the package?
- Gym, nutritionists, etc.
Design Considerations: Non-Medical
Services
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- On cost reduction… Most of it comes from post-acute
- Lots of people reducing SNF in favor of HHA and IRF
Design Considerations: Bonus Thought
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Assess
Design
Contract
Workflow
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- Conditions
- Services
- materials
Contracting Considerations: Exclusions
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- Procedures
- Post-Acute Treatments
- Warrantied Services (like surgery-caused issue readmits)
Contracting Considerations: Inclusions
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- Drug Availability (Prescription vs Generic)
- Included physicians
- Etc.
Contracting Considerations:
Contingencies
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- Employer-as-Payor
- Gainsharing
- FFS with true-up
- Withold
- Payor-defined / negotiated
- Prospective
Contracting Considerations: Payment
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- Know them (Beyond the Scope of Today)
Contracting Considerations: Regulations
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Assess
Design
Contract
Workflow
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- Not much yet by way of standards and leading practices
- But getting care coordination together is high on the list
- Can’t communicate enough with and between groups
- Who will be the quarterback? You as the hospital.
Workflow Considerations: Overview
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- Don’t automate a process until you’re comfortable with what it is
- Don’t be afraid to start things off manually
Workflow Considerations: EMR
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- While EMR changes shouldn’t be undertaken too quickly,
performance tracking should
- Performance can be tracked well with the right tool
- Doesn’t require heavy implementation
- Provides significant insight into all aspects of bundle
performance
Workflow Considerations: Performance
Tracking
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- Expect to run FFS and BP processes concurrently for a while
- Ultimately design one process to manage both
Workflow Considerations: Migration
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- Who owns and is accountable for it? At what levels? At what
organizations?
- Don’t just train once
Workflow Considerations: Training
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- Keep and eye on how you will record charges. Many ways to
lose revenue in a poorly-managed transition
Workflow Considerations: Charge
Capture
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