CMS Innovation and Health Care Delivery System Reform Patrick - PowerPoint PPT Presentation

CMS Innovation and Health Care Delivery System Reform Patrick Conway, MD, MSc Acting Principal Deputy Administrator and Chief Medical Officer Deputy Administrator for Innovation and Quality Director, Center for Medicare and Medicaid Innovation Center for Medicare and Medicaid Services (CMS) April 27, 2016

Overview Delivery System Reform and Our Goals Early Results CMS Innovation Center 2

CMS support of health care Delivery System Reform will result in better care, smarter spending, and healthier people Evolving future state Historical state Public and Private sectors Key characteristics Key characteristics  Patient-centered  Producer-centered   Incentives for outcomes Incentives for volume   Sustainable Unsustainable  Coordinated care  Fragmented Care Systems and Policies Systems and Policies  Value-based purchasing  Fee-For-Service Payment  Accountable Care Organizations Systems  Episode-based payments  Medical Homes  Quality/cost transparency 3

Delivery System Reform requires focusing on the way we pay providers, deliver care, and distribute information “ { } Improving the way providers are incentivized, the way care is delivered, and the way information is “ distributed will help provide better care at lower cost across the health care system. FOCUS AREAS Pay Deliver Distribute Providers Care Information 4 Source: Burwell SM. Setting Value- Based Payment Goals ─ HHS Efforts to Improve U.S. Health Care. NEJM 2015 Jan 26; published on line first.

CMS has adopted a framework that categorizes payments to providers Category 1: Category 2: Category 3: Category 4: Fee for Service – Alternative Payment Models Built Fee for Service – No Link to Value Link to Quality on Fee-for-Service Architecture Population-Based Payment  Payments are  At least a portion  Some payment is linked to the  Payment is not directly based on of payments vary effective management of a triggered by service volume of based on the population or an episode of delivery so volume is not services and quality or care linked to payment Description  Payments still triggered by  Clinicians and not linked to efficiency of quality or health care delivery of services, but organizations are paid and efficiency delivery opportunities for shared responsible for the care of savings or 2 -sided risk a beneficiary for a long period (e.g., ≥1 year)  Limited in  Hospital value-  Accountable Care Organizations  Eligible Pioneer  Medical homes Medicare fee- based purchasing Accountable Care  Physician Value  Bundled payments for-service Organizations in years 3- 5 Medicare  Majority of  Comprehensive Primary Care  Maryland hospitals Modifier Fee-for-  Readmissions / Medicare initiative Service  Comprehensive ESRD payments now Hospital Acquired examples  Medicare-Medicaid Financial are linked to Condition quality Reduction Alignment Initiative Fee-For- Program Service Model 5 Source: Rajkumar R, Conway PH, Tavenner M. CMS ─ engaging multiple payers in payment reform. JAMA 2014; 311: 1967 -8.

During January 2015, HHS announced goals for value-based payments within the Medicare FFS system On March 3, 2016, President Obama and HHS announced that 30 percent of Medicare payments are tied to quality payments through APMs. This goal was achieved one year ahead of schedule! 6

Target percentage of payments in ‘FFS linked to quality’ and ‘alternative payment models’ by 2016 and 2018 Alternative payment models (Categories 3- 4) FFS linked to quality (Categories 2 - 4) All Medicare FFS (Categories 1 - 4) 2011 2014 2016 2018 0% ~20% 30% 50% ~70% >80% 85% 90% Historical Performance Goals 7

The Health Care Payment Learning and Action Network will accelerate the transition to alternative payment models  Medicare alone cannot drive sustained progress towards alternative payment models (APM) Network Objectives  Success depends upon a critical mass of partners • Match or exceed Medicare adopting new models alternative payment model  The network will goals across the US health  Convene payers, purchasers, consumers, states and system - 30% in APM by 2016 federal partners to establish a common pathway for - 50% in APM by 2018 success]  Collaborate to generate evidence, shared approaches, • Shift momentum from CMS and remove barriers to private payer/purchaser  Develop common approaches to core issues such as and state communities beneficiary attribution • Align on core aspects of  Create implementation guides for payers and purchasers alternative payment design  Accomplishments  Common definitions for alternative payment models and agreement to report publicly  Population-based payment and episode-based payment model workgroups and now focused on implementation 8

CMS will reach Goal 2 through more linkage of FFS payments to quality or value Hospitals, % of FFS payment at risk (maximum downside) Readmissions Reduction 8 7.75 8 Program HVBP (Hospital Value- 3 3 3.00 based Purchasing) IQR/MU (Inpatient Quality 2 ** 2 ** 1.75 Reporting / Meaningful Use) 2 2 2 HAC (Hospital-Acquired Conditions) 1 1 1 Performance period Performance Performance 2014 (payment FY16) period 2015 (FY17) period 2016 (FY18) Physician, % of FFS payment at risk (maximum downside) 9* 9 Physician VM ( 4 6 4 (Value Modifier) 4 2 MU (Electronic Health 3 Record Meaningful Use) 3 3 2 PQRS (Physician Quality 4 2 2 2 2 Reporting System) 2014 Performance 2015 Performance 2016 Performance 2017 Performance period period period period (payment FY16) (payment FY17) (payment FY18) (payment FY19) 9 • * Physician VM adjustment depends upon group size and can range from 2% to 4% • ** Exact percentage will vary based on market basket update

Delivery System Reform and Our Goals Early Results CMS Innovation Center 10

Health Care Spending On March 22, 2016, HHS announced that Medicare spent $473.1 billion less on personal health care expenditures between 2009 and 2014 than would have been spent if the 2000 - 2008 average growth rate had continued through 2014. If trends continue through 2015, that amount could grow to a projected $648.6 billion. To read the full report , visit: https://aspe.hhs.gov/pdf- report/health-care-spending-growth-and-federal-policy 11

Accountable Care Organizations: Participation in Medicare ACOs growing rapidly  477 ACOs have been established in the MSSP, Pioneer ACO, Next Generation ACO and Comprehensive ESRD Care Model programs*  This includes 121 new ACOS in 2016 of which 64 are risk-bearing covering 8.9 million assigned beneficiaries across 49 states & Washington, DC ACO-Assigned Beneficiaries by County ** * January 2016 12 ** Last updated April 2015

Pioneer ACOs meet requirement for expansion after two years and continued to generate savings in performance year 3  Pioneer ACOs were designed for organizations with experience in coordinated care and ACO-like contracts  Pioneer ACOs generated savings for three years in a row  Total savings of $92 million in PY1, $96 million in PY2, and $120 million in PY3 ‡  Average savings per ACO increased from $2.7 million in PY1 to $4.2 million in PY2 to $6.0 million in PY3 ‡  Pioneer ACOs showed improved quality outcomes  Mean quality score increased from 72% to 85% to 87% from 2012 – 2014  Average performance score improved in 28 of 33 (85%) quality measures in PY3  Met criteria for expansion, including Actuary certification (improved quality and lower costs). Elements of the Pioneer ACO have been incorporated into track 3 of the MSSP ACO  19 ACOs operating in 12 states (AZ, CA, IA, IL, MA, ME, MI, MN, NH, NY, VT, WI) reaching over 600,000 Medicare fee-for-service beneficiaries  Duration of model test: January 2012 – December 2014; 19 ACOs extended for 2 additional years ‡ Results from actuarial analysis 13

Spotlight: Pioneer ACO Model, Monarch HealthCare Monarch is Orange County, California’s largest association of private physicians with approximately 20,000 beneficiaries . Disease Management Program • Developed COPD, heart failure, diabetes, chronic kidney disease and chronic pain programs for beneficiaries at all levels of acuity • Educated beneficiaries and caregivers about warning signs and needed action to prevent hospital admissions Outcomes Success Improved outcomes and experiences for beneficiaries, earned impressive quality score of 85.70 out of 100 in 2014 Generated 3.96% in gross savings in 2014 and is one of the highest financial performers among Pioneer ACOs 14

Comprehensive Primary Care (CPC) is showing early positive results CMS convenes Medicaid and commercial payers to support primary care practice transformation through enhanced, non-visit-based payments, data feedback, and learning systems  $14 or 2%* reduction part A and B expenditure in year 1 among all 7 CPC regions and similar results year 2  Reductions appear to be driven by initiative-wide impacts on hospitalizations, ED visits, and unplanned 30 -day readmissions  7 regions (AR, OR, NJ, CO, OK, OH/KY, NY) encompassing 31 payers , nearly 500 practices, and approximately 2.5 million multi-payer patients  Duration of model test: Oct 2012 – Dec 2016 * Reductions relative to a matched comparison group and do not include the care management fees (~$20 pbpm) 15