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1 Payment Reform Update and Risk Readiness 2 Landmarks in the - PDF document

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4/4/2019 Medicares New Pathway for ACOs Morie Mehyou, MBA, CPA (Inactive) Baptist Health UAMS Accountable Care Alliance Eric Rogers, Director BKD Health Care Performance Advisory Services HFMA Arkansas Chapter Meeting April 11, 2019 1 1

  1. 4/4/2019 Medicare’s New Pathway for ACOs Morie Mehyou, MBA, CPA (Inactive) Baptist Health UAMS Accountable Care Alliance Eric Rogers, Director BKD Health Care Performance Advisory Services HFMA Arkansas Chapter Meeting April 11, 2019 1 1 Payment Reform Update and Risk Readiness 2 Landmarks in the “Pathways to Success” Final Rule 3 Baptist Health UAMS Accountable Care Alliance 4 Financial Implications 2 1

  2. 4/4/2019 Payment Reform Update and Risk Readiness Hospital executives agree that the current FFS reimbursement model is changing and preparation is needed to survive the transition to value- based care, however, the timing and method of preparation vary greatly from provider to provider Incentive Capitation Direct to Penalties Episodic Care ACO Employer Bonus Full Risk 3 4 2

  3. 4/4/2019 CMS MSSP Experience Past 5 Years Savings Patterns Number Percent No savings 57 15% 4 years of losses then savings 53 14% 3 years of losses then savings 87 23% 2 years of losses then savings 55 15% 1 years of losses then savings 55 15% 5 years of savings 39 10% Other patterns 30 8% 376 100% 5 Major Payer Perspectives 6 3

  4. 4/4/2019 Major Payer Perspectives 7 How are hospitals preparing for the transition? • Strategic planning • Assigning workgroup and accountable executive(s) • Leveraging data • Engaging physicians • Building post-acute networks • Focusing on quality and care coordination • Participating in a voluntary CMS program • Bundles • ACO • CPC+ • Engaging large employers and MA plans • Starting a provider owned health plan 8 4

  5. 4/4/2019 Landmarks in the “Pathways to Success” Final Rule Enhanced Basic Track Track A B C D E Up to 40% sharing Up to 40% sharing Up to 50% sharing Up to 50% sharing Up to 50% Up to 75% sharing rate based on rate based on rate based on rate based on sharing rate rate based on quality, quality, not to quality, not to quality, not to quality, not to based on quality, not to exceed 20% of exceed 10% exceed 10% exceed 10% exceed 10% not to exceed benchmark benchmark benchmark benchmark benchmark 10% benchmark 1 st dollar losses 1 st dollar losses at 1 st dollar losses at at 30%, not to 1 st dollar losses at 30%, not to exceed 30%, not to exceed exceed 8% of 40–75%, not to Upside only Upside only 2% of revenue 4% of revenue revenue capped exceed 15% of capped at 1% of capped at 2% of at 4% of benchmark benchmark benchmark benchmark in 2019 and 2020* MIPS APM MIPS APM MIPS APM MIPS APM Advanced APM Advanced APM 9 Baptist Health UAMS Accountable Care Alliance - Pathways to Success Options Benchmark base 34,000 x $10,800 (2019 Options Agreement Period Track Selection Decision Time Table Estimate) MSR/MLR Max Saving Rate Max Loss RateGain Max RateLoss Max Rate Gain Limit Loss Limit Option 1 - Do Nothing to renew Current Agreement Continue with current agreement July 1, 2019 367,200,000 1% 50% -30% 10% -4% 36,720,000 (14,688,000) agreement 1-1-2018 to 12-31, 2020 until December 31, 2020 Option 2 - Sign up for 5 year Current Agreement Enhanced Track (no other option July 1, 2020 367,200,000 1% 75% -40% 20% -15% 73,440,000 (55,080,000) agreement Pathways to Success 1-1-2018 to December 31, will be available if we waited past Enhanced starting 1-1-2021 2020 July 1 2019 New 5 years agreement 1-1-2021 - 12-31-2025 Option 3 - Renew for 5 years - Current Agreement Basic - Level "E" (this option is July 1, 2019 367,200,000 1% 50% -30% 10% -4% 36,720,000 (14,688,000) Pathways to Success Track "E" 1-1-2018 to December 31, only available if we make a starting 1-1-2020 (Available only 2019 decision after open enrollment 7- during open enrollment in 2019) New 5 years agreement 1-2019 1-1-2020 - 12-31-2024 YEAR 2019 2020 2021 2022 2023 2024 2025 MONTH M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Option 1 X 1 YEAR REMAINING EXISTING CONTRACT Option 2 X SAVINGS RATE OF 75% - LOSS RATE 40% = MAX SAVINGS 73M / MAX LOSS 55M EVERY YEAR FOR 5 YEARS Option 3 X SAVINGS RATE OF 50% - LOSS RATE 30% = MAX SAVINGS 36M / MAX LOSS 15M EVERY YEAR FOR 5 YEARS X Decision point to make to continue with ACO 5

  6. 4/4/2019 Benchmark Expenditures and Risk Adjustment Methodologies • CMS will maintain the overall approach to establishing and rebasing benchmarks based on expenditures from three benchmark years leading up to an agreement period using four beneficiary categories • In this rule CMS finalizes a policy to incorporate regional expenditures into benchmarks sooner, beginning with initial agreement periods for agreement periods beginning on July 1, 2019, and in subsequent years. Regional Adjustment rates: • First agreement period 15-35 percent • Second agreement period 25-50 percent • Third agreement period 35-50 percent • Fourth and subsequent periods 50 percent • HCCs 11 Patient Attribution Waivers & Benefits • Voluntary alignment • SNF three-day waiver • E&M and other HCPCS • Post-acute network codes • Telehealth • Newly and continuously • Physicians assigned • MIPS/A-APM • 4 Beneficiary Categories • Beneficiary incentives • ESRD • Disabled • Aged, Dual Eligible • Aged, Non-Dual Eligible 12 6

  7. 4/4/2019 2018 to 2019 Attribution Changes by Age Group 34,963 30,485 24,411 15,263 12,719 10,552 10,201 9,398 8,597 7,172 6,561 6,074 5,674 5,062 4,134 3,741 3,495 2,904 2,518 2,427 2,226 1,540 1,425 591 837 <65 65-75 76-85 > 85 TOTAL Dropped in 2019 In 2018 and 2019 New in 2019 2018 NET 2019 NET 13 Comparing 2018 to 2019, Increase in 65-75 Age Group And Decrease in over 76+ YR Groups. Need to Focus on Accurate Documentation to ensure Accurate HCC Scores ATTRIBUTION DISTRIBUTION BY AGE CATEGORY COMPARE 2018 TO 2019 2019 NET 18.77% 43.65% 26.88% 10.70% 2018 NET 18.61% 41.72% 28.20% 11.46% New in 2019 23.00% 47.97% 21.10% 7.93% In 2018 and 2019 16.93% 41.79% 29.38% 11.90% Dropped in 2019 25.35% 41.46% 23.46% 9.73% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% <65 65-75 76-85 > 85 14 7

  8. 4/4/2019 • Traditional Medicare Patients • Started January 1 2018 for 3 years contract Background with CMS • Joint effort by BH and UAMS to: • Reduce exposure to risk • Learn more about how to operate under a risk model with selected set of population (Traditional Medicare patients) • Share ACO operation cost • Find other opportunities in improving patient care and operation efficiency 15 • Baptist Health (BH) is a faith based healthcare Who we are system and the largest health care provider in the state of Arkansas Where we are from • University of Arkansas for Medical Sciences What we do (UAMS) is the only academic health sciences university in the state of Arkansas Why we do it • Locations and access points throughout the state of Arkansas • Combined over 18,000 employees • 35,000 Medicare lives with benchmark of $10,761 • At Risk Track 1+ with 1% MSR/MLR With No SNF waiver – 1 st year 2018 • Qualify for Alternative Payment Model (APM) • Provide better coordinated care for Arkansans • Share learning experience in value based models using claims data and decision support tools 16 8

  9. 4/4/2019 2018 Summary Contract duration Three years (Jan 2018 – Dec 2020) MSR/LSR 1% ( estimate 3.5M) Base Benchmark per patient 10,761 Shared Saving / Loss rate 50% / 30% Number of lives 32,401 Maximum saving / Loss 10% / 4% of actual spend Estimated benchmark spend for 2018 333M Financial goal for 2018 Reduce spend by more than 1% 17 9

  10. 4/4/2019 Shared Savings Economic Model “….. But if less is more, how you're keeping score?....” Eddie Vedder, Society 19 ACO Financial Data Sources Monthly CCLF Files • Lots of claim level details • Require a robust and highly technical IT platform to manage data • Generally about 30 – 90 days lag from date of service • CCLF Files do not have all services and expenditures associated with attributed lives – Missing: • Substance Abuse spend • Spend relating to those that opted out of sharing their data • Non-Claims payment (change in 2019) • CCLF Files do not account for: • Truncation • Run-out claims 20 10

  11. 4/4/2019 ACO Financial Data Sources CMS Quarterly Performance Reports • Contain comprehensive summaries of activities • Summary reports take into consideration several key expenditures that are not provided in the CCLF monthly files • Substance abuse spend • Patients that Declined data sharing spend • Truncation • Run-out spend • Data is presented as summaries and ratios • Reports arrive much later after quarter end • Difficult to reconcile to monthly CCLF files 21 Why compare both sets of data sources? • Get a better understanding how data is used • Building a financial model that can be used earlier in the year before any CMS quarterly reports are issued • Start the process in March or April • Provide meaningful reports to the Board and other stakeholders • Assist in making determination to terminate contract within optimal time avoiding costly continuation of a bad contract 22 11

  12. 4/4/2019 Building the Model 23 Thank You! 24 12

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