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Hospital Payment Reform Overview, Forecast, and Strategies for Success
Nell BuhlmanSVP, Clinical and Analytic Services
2© 2015 Press Ganey Associates, Inc.
Reducing Suffering & Promoting a Culture of High Reliability through Alignment & Engagement
Payment Reform Overview
Hospital Pay‐for‐Performance Programs:
• Value‐Based Purchasing
• Readmissions Reduction Initiative
• Hospital‐Acquired Conditions
Alternative Payment Models
• Accountable Care Organizations
• Bundled Payment Programs: Comprehensive Care for Joint Replacement
Strategic Imperative
Agenda for Today
1
2
3
4
Payment Reform Overview1
5© 2015 Press Ganey Associates, Inc.
The ACA in 31 Words
Key Elements (in no particular order)Key Elements
(in no particular order)Major
ComponentsMajor
ComponentsObjectivesObjectives
Triple Aim:
Better CareBetter HealthLower Cost
Insurance Reform
Collaboration
Coordination
Accountability / TransparencyPayment Reform Patient Engagement
Efficiency
Evidence‐based care
Data Sharing
Delivery Reform
6© 2015 Press Ganey Associates, Inc.
No Setting Untouched
HOSPITALS MEDICAL GROUPS
At Risk: 9+% Meaningful Use PQRS/CGCAHPS Physician VM MACRA: MIPS (4‐
9%; +5% bonus potential)
ACCOUNTABLE CARE ORGANIZATIONS
Shared Risk ACO CAHPS PQRS Next Gen ACO
HOME HEALTH
AMBULATORY SURGERY DIALYSIS HOSPICE
Note: Hospitals and medical group payment risk is a percentage point reduction to the fee schedule or DRG. All other providers risk is a percentage point reduction to the annual payment update or market basket update.
At Risk: 2% LTCH‐QR
At Risk: 2% SNF‐QRP (SNF VBP)
SKILLED NURSING
At Risk: 2% IRF‐QR
LONG‐TERM CARE REHAB HOSPITALS
At Risk: 8+% IQR,OQR VBP/HCAHPS Readmissions HACs Meaningful Use IPFQR (ED CAHPS) CJR Bundles (20%)
At Risk: ‐ Oncology
Bundled Payments
ONCOLOGY
At Risk: 2% OQR (OAS CAHPS)
At Risk: 2% HH‐CAHPS HHQR HH VBP (5‐
8%)
At Risk: 2% ICH‐CAHPS ESRD‐QIP
(VBP) ESRD ACO
At Risk: 2% Hospice CAHPS HQRP
7© 2015 Press Ganey Associates, Inc.
Paying for Value
~20% 30%50%
75%
55%
40%
15% 10%
2014CMS
2016CMS
2018CMS
2020Private Payer
Value‐Based Arrangements
FFS
Alternative Payment Models
(ACO, CPC, BPCI*)
TraditionalFFS
*Value‐Based Purchasing, Merit‐based Incentive Payment System, Readmissions Reduction Initiative, Hospital‐Acquired Conditions, Accountable Care Organizations, Comprehensive Primary Care Initiative, Bundled Payments of Care Initiative
55‐60%
25%20‐25%
Quality or Value‐Based FFS
(VBP, MIPS, RRI, HAC*)
8© 2015 Press Ganey Associates, Inc.
Four Medicare Payment Methods,Three Require Measurement of Quality
Source: Press Ganey analysis; Rajkumar H, Conway PH, Tavenner M. CMS – engaging multiple players in payment reform. JAMA 2014; 311: 1967‐8. HCPLAN Alternative Payment Model Framework and Progress Tracking Work Group.
*New for 2015/2016*New & mandatory
• Payment based on volume
• Not linked to performance
• A portion of payment based on performance
• Some payment linked to episode of care of care or management of a population
• Risk/gain sharing
• Payment not triggered by service delivery
• Providers paid and responsible for the care of a beneficiary
• Limited in Medicare FFS
• Hospital VBP• Readmissions
Reduction Prog• HAC• MIPS• Home Health VBP
• ACOs• Bundled Payments• Comprehensive PC
Initiative• Comprehensive ESRD• CJR
Eligible Pioneer ACOs in years 3‐5
Next Generation ACOs in certain tracks
Maryland hospitals
Descrip
tion
Exam
ples
9© 2015 Press Ganey Associates, Inc.
Challenges Common to all the Reform Initiatives
Fluid scope challenging to measure fairly– Expanding areas of interest– Removal of topped‐out measures– Influence of “other providers” on performance
Aspects of performance evaluated in more that one program– Double jeopardy for poor performers– “Unmeasured” factors impact performance across programs
Initial thresholds and benchmarks set extremely high Thresholds and benchmarks rise over time as performance improves
across the board
Hospital Payment Reform Programs2
Hospital Value‐Based Purchasing
11© 2015 Press Ganey Associates, Inc.
VBP Domain Weighting Changes 2013-2018
2% at risk
25%
10%
40%
25%
1.75% at risk 5%
25%
45%
25%
30%
20%30%
20%
1.5% at risk
30%
45%
25%
1.25% at risk
30%
70%
1% at risk
Core Measures
2013 2014 2015
FY 2016 FY 2017
25%
50%
25%
2% at risk
(Based on 2016 Performance)
FY 2018
Process of Care Patient Experience Outcomes and Safety Efficiency
12© 2014 Press Ganey Associates, Inc.
Aligning VBP with National Quality StrategyFY 2017 VBP Measures
• Hospital Consumer Assessment of Healthcare Providers and Systems Survey (HCAHPS)
• Catheter‐Associated Urinary Tract Infection (CAUTI)
• Central Line‐Associated Blood Stream Infection (CLABSI)
• Clostridium difficile Infection*
• Acute Myocardial Infarction (AMI) 30‐day mortality
• Heart Failure (HF) 30‐day mortality• Pneumonia (PN) 30‐day mortality rate
National Quality Strategy
1. Safety
4. Effective Clinical Care
5. Population Health
2. Patient & Caregiver Experience
3. Care Coordination
6. Efficiency & Cost Reduction
• MRSA*• Complication/patient safety for
selected indicators (PSI‐90 composite)• Surgical Site Infection: Colon,
Abdominal Hysterectomy
• Fibrinolytic Therapy Within 30 Mins• Influenza Immunization• Elective Delivery Prior to 39 Completed
Weeks Gestation*
• Medicare Spending per Beneficiary
*Newly adopted measure for FY 2017
13© 2015 Press Ganey Associates, Inc.
Lower scores Higher scores
Achievement threshold(Median)
Benchmark(Mean of Top Decile)
Measurement & Payment Methodology
Providers receive FFS payments, minus a yearly holdback (-1.75%) that can be earned back based on VBP Score.
Each measure scored on achievement and improvement 0 to 10 achievement points
(how far into achievement range) 0 to 9 improvement points
(how much improvement from baseline) Higher of the two used for VBP Score
14
Threshold and Benchmark Levels Continue to Rise
Threshold (50th Percentile) Benchmark (95th Percentile)
HCAHPS Overall Rating of Hospital
© 2013 Press Ganey Associates, Inc.
20
30
40
50
60
70
80
90
CMS FY2013
CMS FY2014
CMS FY2015
CMS FY2016
CMS FY2017
*CMS FY2018
20
30
40
50
60
70
80
90
CMS FY2013
CMS FY2014
CMS FY2015
CMS FY2016
CMS FY2017
*CMS FY2018
8 pt. increase
2 pt. increase
15
HCAHPS: Holding Steady = Losing Ground
Maintaining Status Quo is Not Sufficient
2008 2013201220112009 2010
8987
83
80
76
73
6%
Mean: 63.4%
Mean: 69.3%
30 40 50 60 70 80 90 100
Average HCAHPS Performance Increased 6%
2008 2013Percent of Patients that Rate Your Hospital a 9 or 10 Percentile Rank if 75% of Your Patients Rated
Your Hospital a 9 or 10
16© 2015 Press Ganey Associates, Inc.
Effects of Increasing Slope of Exchange Function
0 10 20 30 40 50 60 70 80 90 100
VBP Points
Perc
ent o
f Inc
entiv
e Ea
rned
0
10
2
0
30
4
0
50
60
70
8
0
90
100
High performers come out ahead
Final slope dependent upon hospital performance and
amount at risk
Hospital Payment Reform Programs2
Readmissions Reduction Initiative
18© 2015 Press Ganey Associates, Inc.
Readmissions Reduction Initiative
Incentive/Penalty – Penalty in the amount of excess payments associated with excess readmissions. DRG operating payment penalty cannot exceed the stated cap for the year:
1% in FY 2013 2% in FY 2014 3% in FY 2015 3% in FY 2016
Measurement Areas of Interest Excess readmissions for
AMI, HF, PN Chronic Obstructive Pulmonary Disorder Hip & Knee Arthroplasty Coronary Artery Bypass Graft (CABG) (New for FY 2017)
Penalty Focus: Excess costs associated with excess readmission
Readmission Rate
(Obs /Exp Readmits) ‐1
ReadmissionsExcess
ReadmssionsDRG
AmountMedicare Excess
PaymentHeart Failure 34.40% 0.4041 333 137 $5,539.00 $745,323.00
AMI 20.30% 0.0151 53 1 $8,068.00 $6,325.00Pneumonia 21.50% 0.1813 131 24 $5,532.00 $131,400.00
$883,048.00
Total Meciare Excess Payments $883,048.00Total Inpatient Operating Payments $37,713,697.00
Excess to Total Ratio 0.0234Adjustment Factor 0.9766
2013 Capped Adjustment Factor 0.99
Uncapped 2013 Impact $883,048.00Capped 2013 Impact $377,137.00 Potential 2013 Impact
20© 2015 Press Ganey Associates, Inc.
Improving on Readmissions
All Cause Readmission Rates in U.S. 2011-2015
16.30%
15.80%
15.40%15.50%
15.40%
15.00%
15.20%
15.40%
15.60%
15.80%
16.00%
16.20%
16.40%
CY 2011 CY 2012 CY 2013 CY 2014 CY 2015*
National
Condition-specific Readmission Rate Trends
Hospital Payment Reform Programs2
Hospital Acquired Conditions Initiative
Medicare Hospital-Acquired Infections
Incentive/Penalty – 1% reduction of base operating DRG payment for hospitals in top quartile of HAC occurrence to continue
Y
HAC Performance
2015 HAC ScoreScore range 0‐10; lower is better
2015 HAC 1% Penalty?
7.03
-1%
Note: For FY2015, Hospitals with HAC scores greater than 7.024 received a penalty.
Measurement Areas of InterestSafety Domain 1 (25%) – PSI‐90 Composite: Pressure ulcer (PSI 3) Iatrogenic pneumothorax (PSI 6) Venous catheter‐related bloodstream infection (PSI 7) Postoperative hip fracture (PSI 8) Postoperative pulmonary embolism or DVT (PSI 12) Postoperative sepsis (PSI 13) Wound dehiscence (PSI 14) Accidental puncture or laceration (PSI 15)
HAC Domain 2 (75%) 5 measures: Catheter‐Associated Urinary Tract Infection Central Line‐Associated Bloodstream Infection Surgical Site Infections – new for payment impact FY16 MRSA – new for payment impact FY17 Clostridium difficile – new for payment impact FY17
24© 2014 Press Ganey Associates, Inc.
17% Reduction in HACs, 2011-2013
Source: AHRQ: Interim Update on 2013 Annual Hospital‐Acquired Condition Rate and Estimates of Cost Savings and Deaths Averted From 2010 to 2013
25© 2015 Press Ganey Associates, Inc.
Largest Improvements in ADEs, Pressure Ulcers
Deaths Averted:1. PUs (20K)2. ADEs (12K)3. Other HACs (6K)4. CAUTI (4K)5. Falls (3K)6. CLABSI (2K)7. SSI (1K)
Alternative Payment Models3
Accountable Care Organizations
MSSP and Pioneer ACOs Across the U.S.
Source: CMS; current as of April 2015
Not just Medicare—the rising total of ACOs includes about 300 private payer ACOs
4165 81 97
138 148
208
334356
458479 489
606
0
100
200
300
400
500
600
700
Q4
20
10
Q1
20
11
Q2
20
11
Q3
20
11
Q4
20
11
Q1
20
12
Q2
20
12
Q3
20
12
Q4
20
12
Q1
20
13
Q2
20
13
Q3
20
13
Q4
20
13
# o
f AC
Os
Total Accountable Care Organizations (2010 - 2013)
# of ACOs
29© 2015 Press Ganey Associates, Inc.
Quality Performance Used to Determine Shared Savings
ACOs required to collect 33 quality measures that will increase or decrease their shared savings depending on scores
• Performance year 1, CMS requires reporting of all measures
• Performance year 2 pay‐for‐performance applies to 25 measures
• Performance year 3 pay‐for‐performance applies to 32 measures
• ACOs must attain a minimum performance on each measure equal to the national 30thpercentile level of performance of FFS or Medicare Advantage quality rates
• ACOs must achieve quality performance of at least 70% in each domain
7measures of patient/ caregiver experience
10measures of care coordination/patient safety
8measures of preventive health
8measures of at‐risk populations
30© 2015 Press Ganey Associates, Inc.
Medicare Shared Savings Program Growing
Medicare ACOs established to date; in January 2016, 147 ACOs renewed agreements534
22
7.7M
180,000 physicians and practitioners in ACOs in 2016
Medicare beneficiaries receive care from providers in ACOs
ACOs in performance based risk tracks, including 16 in new Track 3
31© 2015 Press Ganey Associates, Inc.
One of best features of ACOs is strong quality measurement, CMS says
ACOs reporting results in 2013 & 2014 improved average performance on 27 of 33 quality measures. Marked improvement shown in metrics such as:
Patients’ ratings of clinicians’ communication Beneficiaries rating of their doctor Screening for tobacco use and cessation Screening for high blood pressure Electronic health record use
Alternative Payment Models3
Bundled Payments: Comprehensive Care for Joint Replacement
33© 2015 Press Ganey Associates, Inc.
33© 2015 Press Ganey Associates, Inc.
Bundled Payment Programs: Rapid Development, Testing and Deployment
BCPI – Model 1• April 2013 – December 2016• Discounted payments• Inpatient stay only• All DRGs
BCPI – Model 2 & 3• October 2013 – September 2018• 48 Conditions• Retrospective payments• Model 2 Inpatient to 90d post acute• Model 3 Inpatient and post acute
BCPI – Model 4• October 2013 – September 2018• Prospective payments• Inpatient, post acute, physicians• 48 Conditions
CJR• April 2016 – March 2021• Prospective payments• Inpatient, post acute, physicians• Hip & Knee replacement• 67 MSAs
Cardiac• July 2017• Prospective• Inpatient and 90d post acute• heart attack, bypass surgery• 98 MSAs
Oncology Care Model• July 2016 – June 2021• Prospective payments• Medical practice• Chemotherapy• Commercial payers aligned
34© 2015 Press Ganey Associates, Inc.
34© 2015 Press Ganey Associates, Inc.
Cross‐continuum, episode‐based payments
• Multiple providers at risk
• Forces coordination and collaboration within and across settings
Shifting from retrospective to prospective payment models
Shifting from experimental to mandatory
Financial incentives for hitting performance targets on quality metrics
• Phased in over time
• Additional incentives for early adopters
• Focus areas:
• Patient experience• Clinical outcomes (esp. complications)• Patient reported outcomes (emerging)
Bundled Payment Programs:Common Features and Emerging Themes
Composite Quality Score (CQS) Impact on CJR Payments
Model Year 1
Model Years 2/3
Model Years 4/5
Composite Quality Score
Quality Category
Eligible for Reconciliation Payment
Effective Discount % for Reconciliation Payment
Effective Discount % for Repayment Amount
Effective Discount % for Repayment Amount
Effective Discount % for Repayment Amount
Less Than 4 Below acceptable
No NA NA 2.0% 3.0%
4.0 to 6.0 Acceptable Yes 3.0% NA 2.0% 3.0%
6.0 to 13.2 Good Yes 2.0% NA 1.0% 2.0%
Greater than 13.2
Excellent Yes 1.5% NA 0.5% 1.5%
0% 20% 40% 60% 80% 100%
CQS WeightedMeasures
HCAHPS
RSCR
PROMs
Successful submission of PROMs and risk variable data = 2 points
Winning Strategies 4
37© 2015 Press Ganey Associates, Inc.
Payment Reform: Room for Improvement. Not going Anywhere
Factors Impacting Effectiveness of Value-Based Payment Programs
Implementation process Incentive structure
Lag between performance and payment Adjustments vs. lump sum payments Size & direction of incentive
Retaining FFS architecture incentives Simultaneous quality improvement programs such as public reporting Validity, scope, & complexity of quality measurement
Outcomes-based measures Differentiation between measures for payment, public reporting, and quality
improvement Adjustment factors
Regional Sociodemographic
38© 2015 Press Ganey Associates, Inc.
Health Care Payment Learning & Action Network (HCPLAN) Payment Reform Goals
Source: HCPLAN https://hcp‐lan.org/workproducts/apm‐whitepaper.pdf
Provider Accou
ntability & Inno
vatio
nIm
pact of P
aymen
t Mod
els on
Cost &
Quality
Delivery System
Integration and Co
ordinatio
nPerson
‐cen
tered care
39
OutcomesCost
Patient Experience in the Value Paradigm
Four critical success factors
• What you get paid *• What it costs you• Market share of patients
• Market share of exceptional personnel
* Mixed payment models here to stay
• Imperative to find strategies that transcend payment models
Value
Set your people up for success• Quality, safety, and experience depend on optimal work environmentAdopt evidence-based best practices• Leadership visible and visibly modeling best practices Capture caregiver perception and engagement• When it goes south, so does patient experienceCommit to zero harm• Acknowledge failure to alleviate suffering as a form of harmSegment patient experience by condition• Patient not all created equalEmbrace transparency – internal and external• Own your image and live up to it
Strategies that transcend payment models
Practice Environment Drives Success
42© 2015 Press Ganey Associates, Inc.
Impact of Work Environment and Staffing on Select PX Domains
Meds Explained
Responsiveness Discharge Inst
Comm with Nurses
Work Environment Work Environment
Work EnvironmentWork Environment
63.5
65.24
78.82
86.8
Average HCAHPS Top Box Scores
43
Communication with Nurses: Significant Implications for HCAHPS
Results of Hierarchical Variable Clustering Analysis on HCAHPS Data
© 2013 Press Ganey Associates, Inc.
Discharge
MD Communication
Clean/ Quiet
Hospital Rate
Meds Explanation Pain
Management
RN Communication
Responsive
This cluster drives 15% of a hospital’s VBP score
44© 2015 Press Ganey Associates, Inc.
Impact of Work Environment and Staffing on Select P4P Programs
Work EnvironmentWork Environment
AvgRe
admission Ra
te
AvgVB
P Score
Readmissions VBP
P4P Performance Generally Sensitive to Staffing, but Facilities with Below Average Staffing Can Outperform with an Optimal Environment
45© 2015 Press Ganey Associates, Inc.
The Impact of Work Environment on Nurses Percetions
Work Environment
RN Perception of Quality (M
ean)
3.5
46© 2015 Press Ganey Associates, Inc.
46© 2015 Press Ganey Associates, Inc.
Impact of Work Environment and Staffing on Nurse Outcomes
Intent to Stay
Job Enjoyment
Work Environment Significantly Impacts both Nurses’ Intent to Stay on the Unit and their Job Enjoyment
47
Cost of Nursing Disengagement
$1,665,000For a 400 Bed Hospital
$16,650,000for a hospital system with 5,000 RNs
$22,200 Cost in lost productivity per year from each disengaged nurse
15out of every 100 nurses are
disengaged from their workplace
Capture Caregiver Perception and Engagement
49© 2015 Press Ganey Associates, Inc.
49© 2015 Press Ganey Associates, Inc.
Employee Engagement and HCAHPS
50© 2015 Press Ganey Associates, Inc.
Net Margin – Bar Chart
0
2
4
6
8
10
12
14
Bottom Quartile 2nd Quartile 3rd Quartile Top Quartile
Mean Net M
argin (%
)
Engagement Quartile
Mean Net Margin by Engagement Quartile
51© 2015 Press Ganey Associates, Inc.
Medicare Spending per Beneficiary – Bar Chart
$17,000
$17,500
$18,000
$18,500
$19,000
$19,500
$20,000
$20,500
Bottom Quartile 2nd Quartile 3rd Quartile Top Quartile
Mean Med
icare Spen
ding
per Ben
eficiary
Engagement Quartile
Mean Medicare Spending per Beneficiary by Engagement Quartile
52
Patient Loyalty and Nurse Loyalty Are in Sync
© 2015 Press Ganey Associates, Inc.
R² = 0.2548
75
80
85
90
95
100
3.5 3.7 3.9 4.1 4.3 4.5 4.7 4.9 5.1 5.3 5.5
Patie
nt Likelihoo
d to Recom
men
d (For Treatment)
Mean Score
RN Likelihood to Recommend (For Employment) Mean Score
Patient Likelihood to Recommend vs RN Likelihood to Recommend
53
RNs and Patients Tend to Agree…
© 2015 Press Ganey Associates, Inc.
87.7
85.4
90.4
93.692.6
94.9
80
82
84
86
88
90
92
94
96
Overall Patient Experience Rating Likelihood to Recommend Friendliness and Courtesy of Nurses
Mean Score
Patient Experience Scores for Top vs. Bottom Decilein RN Perception of Quality of Care
Bottom Decile (0‐9th percentile) Top Decile (90‐99th percentile)RN Perceived Quality of Care
Segment Patient Experience Data by Condition
55© 2015 Press Ganey Associates, Inc.
Reduce Suffering by Meeting Patient Needs
Avoidable Suffering Caused by defects in the approach to deliver care
OUR GOAL: Prevent this suffering for patients by optimizing care delivery.
Inherent Suffering Experienced even if care is delivered perfectly
OUR GOAL: Alleviate this suffering by responding to Inherent Patient Needs.
Failing to Reduce Sufferingis a form of harm.
Suffering Associated with Treatment
Suffering Associated with Diagnosis
Avoidable Suffering Arisingfrom Defects in Care /Service
56© 2015 Press Ganey Associates, Inc.
How Well Are You Meeting Patient’s Needs?
57
Meeting Patients’ Needs is Good for Business
© 2015 Press Ganey Associates, Inc.
10.0%
12.2%
12.7%
13.0%
13.2%
13.4%
13.5%
13.6%
14.1%
14.8%
10.5%
8.2%
6.6%
5.4%
4.2%
4.4% 3.6% 3.1%
3.3% 2.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Top 10% 2nd 3rd 4th 5th 6th 7th 8th 9th Bottom 10%
Percen
t
Decile of HCAHPS Performance
CMS Spending on Readmission & Net Margin by HCAHPS Overall Rating
CMS Spending on 30 Days Readmission Net Margin
Embrace Transparency
59
Media/Social Media: Be at the Wheel
© 2011 Press Ganey Associates, Inc.
60© 2010 Press Ganey Associates, Inc.
The Rise of Consumerism: Losing Faith in Faith
61
Facebook find-a-doc
Ouch!
62
The Full Monty: University of Utah
Exceptional Patient Experience
Medical Practice Survey minimum n=30 returned in calendar yearNational Rank – compared to Press Ganey National Database: 128,705 physicians
4%9%
22%27%
46%
0%
10%
20%
30%
40%
50%
2009 2010 2011 2012 2013
1 out of 2 of our physicians are in the top 10% nationally
% o
f tot
al p
rovid
ers
1%3%
13%17%
25%
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012 2013
1 out of 4 of our physicians are in the top 1% nationally
Exceptional Patient Experience
Medical Practice Survey – providers must have n=30 returned in calendar yearNational Rank – compared against the Press Ganey National Database: 128,705 physicians
% o
f tot
al p
rovid
ers
65© 2013 Press Ganey Associates, Inc.
Complex, yet straight forward
Thank you!
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