©AAHCM

Gary Swartz, JD, MPAAssociate Executive Director

American Academy of Home Care Medicine

Value Based Purchasing

©AAHCM

Context and history

VBP and risk adjustment (RA) defined

VBP w RA embedded across public and private models

Academy advocacy to assure accurate risk adjustment for your HBPC population; request for your help

VBP with RA provides HBPC professional services and organizational leadership opportunities

Value Based Purchasing (VBP)

©AAHCM

Siloed care has been supported by 1960’s Medicare “insurance program”

Fragmented care, payment and professional silos and communication barriers

Medical care/Medicare cost increases

Legislative; Patient Protection and Affordable Care Act and BBA (1997) for Medicare Advantage

Risk adjustment and value based purchasing

Value Based Payment - Context

©AAHCM

Siloed Medicare by Payments 2013

Medicare program cost continues to increase

Type of Value-Based Purchasing Program VBPP and Setting

Timeline

Hospital Value-Based Purchasing Program October 1, 2012 (current program)

Physicians (or groups of physicians) under Physician Value-Based Payment Modifier

January 1, 2015, for a subset of physicians January 1, 2018, for all physicians (program to be implemented)

Inpatient critical access hospitals No later than 2 years after date of act (May 1, 2010 - demo.)

Hospitals excluded from HVBP due to insufficient numbers No later than 2 years after date of act (May 1, 2010) – demo.)

Long-term care hospitals No later than January 1, 2016 (pilot program)

Hospice programs No later than January 1, 2016 (pilot program)

Psychiatric hospitals No later than January 1, 2016 (pilot program)

Rehabilitation hospitals No later than January 1, 2016 (pilot program)

PPS-exempt cancer hospitals No later than January 1, 2016 (pilot program)

Ambulatory surgical centers Submit plan to Congress no later than January 1, 2011 (plan for program)

Home health agencies Submit plan to Congress no later than October 1, 2011 (plan for program)

Skilled nursing facilities Submit plan to Congress no later than October 1, 2011 (plan for program)

Shared Savings ACOs no later than January 1, 2012 (current program)

Bundled Payment Hospital/physicians/post-acute care no later than January 1, 2012(demonstration program)

2010 Patient Protection and Affordable Care Act Value-Based Purchasing Provisions

©AAHCM

MD, NP, PA and others

Hospitals

Ambulatory settings

CMS Innovation Center (ACOs, Shared savings)

Post Acute◦ IMPACT Act◦ BACPAC (proposed)

Legislative provisions for VBP now

cover the range of program benefits

©AAHCM

Mix of payment method and model change

Measures based data development for payment and reporting

Public reporting/transparency – Compare programs; “Stars Ratings”

Provisions include common elements across providers and

care settings

©AAHCM

Value = Quality ÷ Cost

What Is Value?

Agency for Healthcare Research and Quality (AHRQ)

Business Group on Health

Buyers hold providers accountable for cost and quality

Demand side strategy to measure, report, and reward excellence in health care delivery. 

Information on quality,outcomes, health status(measure development)

Actions of coalitions, employer purchasers, public sector purchasers, health plans, and individual consumers in making decisions that

take into consideration access, price, quality, efficiency, and alignment of incentives. 

Reduce inappropriate care

Identify and reward best performers

Effective health care services and high performing are rewarded with improved reputations through public reporting, enhanced payments and increased market share

Value-based purchasing concepts

DHHS announcement of transition from FFS to Value Based Payment will

increase importance of risk adjusted VBP methodologies

Year 2016 2018 2020

Medicare 85% 90%

Private 75%

Percent of payment in quality/value based models DHHS/Private Payors (HCTTF) announcement

February, 2015

©AAHCM

• Hospitals• Post Acute• Impact Act

• Medicare Fee Schedule - MIPS

• Alternative Payment Models/ACOS

• Standardized Exchange Plans

• State Managed Care/Duals

• Medicare Advantage

Part APart BSGR

Repeal

PrivateNon

MedicarePact C

Risk adjustment is now embedded across Medicare and private plans

©AAHCM

Value based payment

Risk adjustment

Diagnostic coding

Physician diagnostic coding drives risk adjustment and thus payment

©AAHCM

Provides for differential payment to a physician or group of physicians under the Medicare Physician Fee Schedule (PFS)

based upon the quality of care furnished compared to the cost of care during a performance period

Value Modifier is an adjustment made on a per claim basis to Medicare payments for items and services under the Medicare PFS.

What is the Value-Based Payment Modifier (Value Modifier)?

©AAHCM

TINs treating a large number of beneficiaries with multiple chronic conditions

could perform worse on certain quality and cost measures than TINs with relatively healthy beneficiaries

due, at least in part, to differences in their beneficiary populations.

Value based payment concerns relate to risk adjustment

©AAHCM

Risk adjustment facilitates more accurate comparisons by accounting

for differences in beneficiary case mix across TINs

The role of risk adjustment

©AAHCM

A process of adjusting: health plan payments, or health care provider payments, or premiums

to reflect the health status of beneficiaries or plan members

Risk adjustment

©AAHCM

Definition varies by the application across Medicare payment models

Risk score of 1.0 corresponds to average expected expenditure; higher risk scores are associated with higher expected expenditures

The right risk adjuster is critical

Risk Adjustment

©AAHCM

Changes to Medicare Fee Schedule due to Medicare Access and CHIP Reauthorization Act (MACRA)

Year Medicare Fee Schedule

2015 -2019 .5% increase each year

2019- 2025 2019 rates plus ability to receive additional payment through Merit-Based Incentive Payment System (MIPS)

2019 -2024 5% bonus for those participation in qualified alternative payment models

©AAHCM

MIPS - Not Your Father’s Value Based Payment Modifier or is it?

Quality

30 percent

Measures used in the existing quality performance programs (PQRS, VBM, EHR MU),

Secretary to solicit recommended measures

Measures used by qualified clinical data registriesResource Use

30 percent

Measures used in the current VBPM program

Additional process to report specific role in treating the beneficiary

Research on how to improve risk adjustment to ensure professionals are not penalized for serving sicker or more costly patients

Meaningful Use

15 percent

Current EHR Meaningful Use requirements, demonstrated by use of a certified system Professionals who report quality measures through certified EHR systems for the MIPS quality category are deemed to meet the meaningful use clinical quality measure component

Clinical Practice Improvement Activities

25 percent

Professionals will be assessed on their effort to engage in clinical practice improvement activities.

Activities must be applicable to all specialties and attainable for small practices and professionals in rural and underserved areas

MIPS - four categories and bonus or reduce MFS paymentbased on composite performance

©AAHCM

Year Potential reduction 2019 minus 4 percent2020 minus 5 percent2021 minus 7 percent2022 and after minus 9 percent

How much can payment be reduced under MIPS?

©AAHCM

The path to value based purchasing and population health management begins with accurate risk adjustment

©AAHCM

Academy is conducting analysis using 2012 Medicare data to document the inadequacies of current risk adjustment and to present to CMS

Practice TINs and NPIs are required to associate claims data to document the inadequacies of current risk adjustment models; in the absence of improvement to the risk adjustment practices will appear less cost effective and be penalized

Send your TINs and NPIs to Gary Swartz Results of analysis will be presented to CMS to modify risk adjustment

Protects your revenue in the future under VBPM and MIPS

Protects access to care for your patients and practice revenue under APMs/ACOs/bundles – application to private health plans

Contributes to the development of payment policy for the frail elderly

Academy advocacy to assure accurate risk adjustment and payment for your HBPC population;

request for your help

©AAHCM

There is danger;what are the opportunities?

©AAHCM

Medicare Fee Schedule

Alternative Payment Models

Post Acute Services/ Bundles Management

Managed Care Population Health Management

ACO/Health system/Hybrid Population Health

Management

Professional HBPC services and organizational opportunities