1 CNYCC Joint Board and Finance Committee Forum December 1, 2015 Michael Bailit | Bailit Health
2 Meeting Agenda 1. Value-Based Payment Overview Environmental Context • New York State Roadmap • DSRIP Payment Reform Models • Expectations of the PPS • 2. PPS Contracting Options Pros and Cons • 3. Operational Implications 4. Discussion
3 Value-Based Payment Overview • Environmental Context • New York State Roadmap • DSRIP Payment Reform Models • Enter Medicare? •
Introduction to Value-Based Payment • For many years health care has been purchased on a piecework basis, where delivery of each service generates a separate payment. • What do you get when you pay per piece? • You get lots and lots of pieces – especially for high margin services like surgery and imaging. • Payment drives care delivery. 4
The US delivers more higher margin services than other developed countries... MRI S PER 1,000 106.9 United States 90.9 France 52.8 OECD Median 50.6 Canada Source: D. Squires and C. Anderson, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.
…but we’re not any healthier! P ERCENT OF P OPULATION 65+ WITH T WO OR M ORE C HRONIC C ONDITIONS 68 United States 43 France N/A OECD Median 56 Canada Source: D. Squires and C. Anderson, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.
7 Goals of Payment Reform • Payment reform is intended to create provider economic incentives to improve health care delivery and produce high-value, cost-effective care. • There are multiple alternative payment models to fee- for-service payment. • There is also increasing evidence for some alternative payment models of critical success factors. • Some believe that one critical success factor for payment reform is matching the strategy to the geographic region and its delivery system.
8 What Does the Road Ahead Look Like for Central New York? • Payment reform is happening all around us and becoming an increasing focus for Medicare, states, commercial insurers and employers. • The status quo is not a realistic option. • While NYDOH has created a detailed roadmap for payment reform, there is a real opportunity to shape a future path that appears to work best for CNYCC’s provider community and the patients it serves.
9 Forces Behind Change: Consumers • People want more accessible, coordinated, well- informed care: • One provider responsible for primary care and coordinating care (91%) • Place to go for care at night and on weekends (89%) • Doctors with easy access to your medical records (96%) • Information on quality of care for different providers (95%) • Information about costs of care before you get it (88%) • People think doctors working in teams or groups improves care • Doctors and nurses working closely as teams (88%) • Doctors practicing with other doctors in groups (65%) Source: How, S. et al. “Public views on US health system organization: a call for new directions.” The Commonwealth Fund. August 2008 and Guterman, S. “What do we expect from ACOs?” AcademyHealth Annual Research Meeting June 8, 2014
10 Forces Behind Change: CMS (through Medicare & Medicaid) • Secretary Burwell set ambitious goals for Medicare: • 2016: 30% of payments will be made through alternative payment models • 2018: 50% of payments will be made through alternative payment models; and 90% of FFS payments be linked to quality or value. • It is testing many different Alternative Payment Models, including: • Population-based payment through several different ACO models (i.e., Pioneer ACO, Medicare Shared Savings Program, Next Gen) • Primary care payment through several different patient-centered medical home programs (e.g., Comprehensive Primary Care Initiative) • Episode-based payment through voluntary and mandatory programs (i.e., Bundled Payment for Care Improvement, and Comprehensive Care for Joint Replacement)
11 Medicare is Increasingly Linking FFS to Value… Source: Conway, P. “CMMI Update” November 10, 2014
12 …and Making FFS a Less Attractive Option in the Long Run 2017 2018 2019 2020 2021 2022 2015 and 2016 2023 2024 2026 and 2025 earlier later 0.75 Fee QAPMCF * FEE 0.5 0.5 0.5 0.5 0 0 0 0 0 0 Schedule Updates 0.25 N-QAPMCF ** Quality MIPS Payment Adjustment (+/-) Resource Use MIPS 4 % 5 % 7 % 9 % Clinical Practice Improvement Activities Meaningful Use of Certified EHR Technology PQRS, Value Modifier, EHR Incentives 5 % Incentive Payment Qualifying APM Participant Certain Medicare Payment Threshold APMs Excluded from MIPS Excluded from MIPS * Qualifying APM conversion factor ** Non-qualifying APM conversion factor Slide adapted from: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html
Majority of States are in the Process of Health Care System Redesign 34 states, three territories and Washington, DC all received State Innovation Model (SIM) Grants – which requires multi-payer payment reform activities Model Design Awardees Model Test Awardees Round One and Round Two Awardees. Source: CMS.gov 13 Designed by Showeet.com
The Commercial Sector in New York is Changing, Too Percent of commercial payments that are value-oriented in NY 47% 46% And the tap is expected to stay open and affect more payments over the next several years 15% Hospital PCPs Specialists Source: Catalyst for Payment Reform, 2013
NYS Roadmap For Medicaid Payment Reform No single path to payment reform is prescribed, however NYDOH will offer 3 standardized options of different payment models from which MCOs and Vision of three different PPS’ can choose. types of integrated services with coordination between 2 them to serve the unique needs of the Medicaid Goal for 80-90% of population: managed care payments to providers to be by value- 1) Integrated primary 1 based payment care methodologies by the end 2) Episodic care for of the DSRIP highly specialized demonstration. services (e.g., maternity, joint replacement) 3) Specialized continuous care (e.g., for special needs populations)
Bill Gates on Change “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10.”
NYS Roadmap For Medicaid Payment Reform Goal 80-90% of MCO Payments to Providers Falls within Levels 1 - 3 Level 0 VBP Level 2 VBP Level 1 VBP Level 3 VBP (only feasible after experience with Level 2; requires mature PPS) FFS with bonus FFS with upside-only FFS with risk sharing Prospective capitation - and/or withhold shared savings available - upside available PMPM or bundle (with based on quality when “outcome” scores when outcome outcome-based scores scores are sufficient component) are sufficient (For PCMH/APC, FFS may be complemented with PMPM supplemental payment) 17
Payment Reform Models in New York State’s DSRIP Program T OTAL C ARE FOR T OTAL P OPULATION T OTAL C ARE FOR S UB -P OPULATION B UNDLES I NTEGRATED P RIMARY C ARE 18
Total Care for a Total Population • Defines a budget on a per-capita basis for a broad population of patients for whom the provider assumes clinical and financial responsibility. • Populations can be defined based on enrollment (e.g., PCP selection) and/or on attribution (e.g., assigned to the provider based on visit history). • Most often providers share in savings generated (“shared savings”), but are sometimes held accountable for losses too (“shared risk”). • Quality is incorporated into the model by diminishing savings distributions or mitigating financial losses. 19
Total Care for a Sub-Population • Difference between this and Total Care for a Total Population is just a narrowed population focus. • The reasoning is that certain subpopulations may need more specialized services and are best served holistically by providers skilled in their unique needs. • The New York State Roadmap defines subpopulations as individuals living with HIV/AIDS and individuals in the MLTC/FIDA, HARP and DISCO populations. 20
Bundled Payments • A fixed dollar amount that covers a set of services for a defined period of time. • Payment is typically administered on a FFS basis with retrospective reconciliation to an episode budget. There are examples of prospective (“bundled”) payment in use, however. • Most often providers share in savings generated (“shared savings”), but are sometimes held accountable for losses too (“shared risk”). • Quality is typically a component of payment – either influencing gain/loss distribution, or as a separate bonus. 21
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