Payment Reform: An Innovative Approach to Advanced

Payment Reform: An Innovative

Approach to Advanced Physical

Therapy Practice

Elise Latawiec, PT, MPH

Senior Specialist, Payment and Practice Management

American Physical Therapy Association

Lindsay Still, JD

Specialist, Payment and Practice Management

American Physical Therapy Association

Session Learning Objectives

After this session, you will be able to:

• Describe why the current procedural based reporting and payment system is an unsustainable model in the third party pay environment.

• Describe the various types of payment models being implemented by payers and the results they have generated to date.

• Identify payment trends including, narrow networks and utilization management/utilization review.

• Utilize tools to help you navigate the changing payment landscape.

Payment Reform

The Big Picture Change Method of Payment

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Health Care Reform: Triple Aim

Improved Access

Improved Quality

Accountability/ Cost

Containment

Value-Based Health Care Payment Systems

Source: Miller HD. Creating payment systems to accelerate value-driven health care: issues and options for policy reform. Commonwealth Fund pub no. 1062, September 2007; http://www.commonwealthfund.org

Most commonly seen today.

APTA’s PTCPS

Ideal Spot on Continuum

http://www.commonwealthfund.org/

A “Value” Mindset

Trends in PaymentCommercial Payer Policy

• Taking page out of Medicare’s playbook in setting fees and developing utilization strategies

• MPPR and Sequestration being applied - List of payers who have implemented MPPR on APTA’s Payment (www.apta.org/Payment) webpage under “Private Insurance.”

• Audit Activity – UM/UR

• Value based payment

• Network Adequacy

• Benchmark Plans

• Direct Access

• Data Collection and Metrics

• Telemedicine

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Making the Case for Payment ReformRecommendations from “Phasing Out Fee for Service” (NEJM)

• Transition to Quality and Episodic methodologies should begin with “Blended” approaches

• Site Neutral Payments / Provider Neutral Payments

• Value “Patient Management” over “Procedures”

• Risk Sharing / Innovations Rewarded

http://www.nejm.org/doi/full/10.1056/NEJMsb1302322

Overview: APTADevelopment of Structures and

Process to Facilitate an Alternative

Payment Methodology

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Payment of the Past

• Paid for usual and customary services

• Paid what we billed

• Unrestricted number of visits

• Length of stays 30-40 visits /over months/years

Impetus for ReformCurrent Environment for OP Rehab

Payment Cuts

Regulatory / Administrative

Requirements

Payment Challenges Ahead in Outpatient Payment

Pressing Need for Reform– APTA Development of a Reformed Payment model

• Began following the Balanced Budget Act 1997-98

• 2010 more aggressively due to MPPR, MEDPAC and other legislative/regulatory

pressures

– Guiding Principles for Reform include;• Visit/Session based with eventual transition to episodic model

• Utilizes Clinical Judgment of the PT in context with assessment tools

• Factors influencing reporting include;

– Severity/complexity of the patients presentation with

– The required intensity/complexity of the therapists clinical

decision making and skill/expertise of techniques in the delivery

of care

Improving Value and Affordability

Old Model

Reward by unit cost

Inadequate focus on

care efficiency

Payment for

unproven services

New Model

Reward health

outcomes

Lower cost while

improving consumer experience

Improve quality and

safety

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The Evolution of APTA’s Model for Payment Reform:

Physical Therapy Classification and Payment System

(PTCPS)

Original Model

Original Model

Current CPT PerspectivesReporting Under a Per Session Payment Methodology

Reporting elements being considered:

Up to 5 levels of interventions: Combine elements of patient severity and intensity of

provider work

• Low Severity/Low Intensity

• Moderate Severity/Low Intensity

• Moderate Severity/Moderate Intensity

• High Severity/Moderate Intensity

• High Severity/High Intensity


Basic elements include:

• 12 codes describing evaluations (4 PT, 4 OT, 4 AT)

• Majority of 97000 CPT codes describing interventions collapsed

into per session code structure

• Select services remain as “separately reportable” (~14 services)

• Bundling of high volume procedure codes into one code with

Provider reporting a level (1-5) that their clinical work reflects

• Levels of intervention, reported based on complexity/severity of

patient and intensity of therapist work

PT, OT Evaluations 3 Initial, Development of POC 1 Re-Eval, est. POC

Level of Evaluation

Clinical

Considerations &

Complexity of the

Examination

Problem - Focused Expanded Comprehensive

Limited 1

Moderate 2

Significant 3

Established POC 4

Evolution of ModelCollapsing Levels of Interventions

Severity of Patient @ Visit / Intensity of Intervention

Low/Low Moderate/LowModerate/Moderate

High/Moderate High/High

1 2 3 4 5

• Patient’s presentation• Clinical decision-making• Selection of interventions / Risk to the patient


Characteristics of Reporting Elements: Level 1

Severity

• Patient presentation: Stable and uncomplicated

• Personal/environment: No impact on management

• Function: Per assessment instrument, minimal restrictions

• Prognosis: certain, predictable

Intensity

• Straightforward clinical decision-making

• No to minimal adjustment to supervised management

• Minimal risk

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Severity

• Pt. Presentation: Condition/complaints actively evolving, but predictable,

with impact from co-morbidities

• Personal/environment: Present some challenges to pt. management

• Function: Per assessment instrument, moderate restrictions

• Prognosis: predictable but with risk for delayed progress

Intensity

• Straightforward clinical decision-making

• Intermittent adjustment required based on patient response

• Elements of supervised and direct contact management

• With risk factors taken into consideration through plan

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Severity

• Pt. Presentation: Condition/complaints actively evolving, in an

unpredictable manner, with unstable co-morbidities

• Personal/environment: negatively impact pt. management

• Function: Per assessment instrument, significant restrictions

• Prognosis: variable, requiring prioritization of objectives

Intensity

• Complex clinical decision-making

• Immediate response to management of response to treatment

• Continual adjustment of elements of treatment provided in direct contact

with patient

• Risk factors influencing development and management through plan of

care

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Timeline to Implementation:

June-Sept. 2014

Pilot testing -

CPTGathering of data

Sept.-Dec.

Analysis of data

Report to APTA-AOTA

Nov.-Dec.

Interim report to APTA

Discussion of revisions to potential Proposed

revisions to model

Feb. 2015

Presentation to CPT editorial Panel

Upon approval, referred to Relative Value Committee

Jan. 2017

Potential implementation through Medicare Fee

Schedule

OverviewAlternative Payment Methodology

Significantly change the model of payment:

• Demonstrates use of clinical judgment

• Payment is influenced by patient characteristics, intensity of

clinical work with reporting of outcomes that help

demonstrate value

• Administratively burdensome policies lessened with focus

moving away from control of utilization and towards managing

patient progress towards functional change and outcomes

A “Value” MindsetNeed to Prove Value of PT

• Value-based health aims to improve quality, lower cost, and drive toward value in healthcare delivery

• The demand for value requires greater accountability on the part of all stakeholders within healthcare

• To deliver on value, the current “sick care model,” which focuses on disease management, must be replaced by a true “healthcare model,” which focuses on health management

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New Payment Model: Innovative Approach to Advance PT Practice

Profession will either drive change or…it will be driven by others!

Payment Trends

Network Adequacy

Provider Networks

• Consumers choose health coverage based on:

• COST of insurance

• CHOICE of provider

• Network Adequacy Standards established for Marketplace Plans

• Definition:

• “Network of providers sufficient in number and type to assure all services will be accessible without unreasonable delay.”

• States may have more stringent Network Adequacy standards

Insurer Perspective

• Provisions of the Affordable Care Act increased cost/risk:

– No medical exclusions

– No increased premium based on medical status

– Limited premium increase w/age

– Cover children to age 26

– Cover EHB

– No lifetime cap

Insurer Response

• Narrow/ ultra narrow networks

– Limit provider participation

– Selective contracting

– Drive volume to “value” providers

• Broad network = higher premium

– Premium 5 to 20% less in narrow network

• Limit out-of-network benefits

• Increase out-of-pocket costs

Who does this affect?

• Healthcare Exchange enrollees

–McKinsey report:

•Narrow network plans available to 92% customers

•Broad network plans available to 90% customers

• Medicare advantage

• Commercial

Possible Benefits of Narrow Networks

• Integration of services

• Coordination between payer/provider

• More available data

• Better adherence to protocols

• Reduced duplication/testing

• Reduced fragmentation

Issues• Adequate coverage?

• Patient Access?

• Availability of provider listings?

• Consumers informed?

• Premium vs out of pocket

• Affordability vs choice

• Bills for out of network services

• Numerous lawsuits

Regulatory Changes

• National Association of Insurance Commissioners (NAIC) developing model network adequacy regulations– Balance needs all stakeholders–General vs. quantitative standards– Likely to address provider directory timeliness/accuracy– Likely to address tiered networks

• Role of Health Human Services (HHS) uncertain• Federally Facilitated Marketplace regulation/guidance for 2015:

– FFM plans must submit list of certain in network providers: • Hospitals• Mental health• Oncology• Primary Care

Opportunities for the States

• States introducing new Network Adequacy regulation

• Network adequacy legislation/ guidance to address:

–Transparency: accurate and accessible consumer information on network status of providers

–Monitoring of network provider capacity

–Speedy exceptions mechanism for specialized needs

–Risk selection strategy based on limited coverage of some specialties

What APTA and Chapters are doing:

• Advocate on behalf of the profession

• Advocate on behalf of patients

• APTA monitors Federal regulations

• Chapters monitor state specific NA standards

• APTA/ chapters comment on proposed NA regulations

• Align with other stakeholders

• Keep members informed

Provider Tips

• Check to see if more stringent network adequacy standards apply in your state

• If your facility is seeing narrow networks, collect anecdotal evidence of patient access issues

– Document all reported access issues

– Ask consumers to report concerns to insurer, employer, Office of the Insurance Commissioner (OIC)

• Use outcome data, cost data, and niche services to leverage in-network contracts

Utilization Management / Utilization Review Companies

Background

• Increased third party utilization management for physical medicine and rehabilitation

• APTA/ chapter partnerships

• Identify and address issues

– Regence BC (payer)/ Care Core (UM)

• WA, OR, UT, ID

• Effective January 2014

– Cigna National (payer)/American Specialty Health (ASH) (UM)

• TX, CA, NV, AZ

• Effective 8/1/14 Texas

• Effective 1/1/15 CA, NV, AZ

Major Issues w/UM companies

• Policy – Definition medical necessity – Assessment of function (often impairment based)– Determination/ criteria for visit approval

• System – Failed/untested technology– Administrative burden– Delayed authorization approvals– Inaccurate provider network status– Inaccurate or inability to determine eligibility – Claims issues (denials, delays, incorrect payment, post payment denials)– Tiering

• Patient Access– Interrupted treatment– Denied/delayed approval medical necessary services

How we got here

• Health care reform eliminated insurers ability to use pre-existing conditions and lifetime limits as a barrier to insurance coverage.

• Insurers re-calculated actuarial tables and determined costs would increase.

• Insurers maximize their control over costs by Counting/Limiting Procedures, (CLP)

Contributing factors

• Growth delegated UM attributed to two factors:

–Unabated increase PT spend

–Provision of the Affordable Care Act: Medical loss ratio

•Purpose: limit insurer profit

• Insurer must spend specific % premium $ for medical care

•Premium rebates if medical % not met

•2014 rebates totaled $330 million

Med Loss Ratio

–Med sized companies: 80% medical/ 20% administrative

–Large sized companies: 85% medical/ 15% administrative

–UM/ quality management for prospective and concurrent review included in medical

–Outsourcing allows payer to fix cost

–Reduces administrative/increases medical spend

–Reduces rebates

Insurer Goals

• Reduce cost

• Control utilization

• Address outliers

APTA Mission

• Do its due diligence in advocating on behalf of the profession to ensure physical therapists are able to treat patients based on their clinical judgment and decision making and full scope of licensure, not based on arbitrary policies and protocols.

Value-Based Utilization Management

APTA Response

• Develop viable alternatives

– Value based (value= outcomes/cost)

– Patient centered

– Meet the Triple Aim of the Affordable Care Act

• Lower cost, improve patient experience, improve population health

• Cost stability structure benefits all stakeholders

• Develop consistent message

• Collect data demonstrating ST/LT affect of PT on outcomes and total cost of care

What needs to change

• PT must assume identity of a VALUE to be leveraged in driving positive outcomes to meet the “triple aim”… not a COST to be contained by counting procedures

• Need data to demonstrate VALUE of PT services

• Need to facilitate Direct Access

• Must collaborate w/insurers

• Get PT out of the silo and into total episodic cost of care

• Proactively facilitate alternatives to UM

Current APTA Activities

• Developing UM strategy

• UM Tool Kit for chapters

• UM member resources

• Developing online UM data collection tool

• Integrity in Practice Campaign

• Registry

• CPG development/ The Guide to Practice

• Innovations 2.0 models of care delivery templates

• In dialogue / educating / developing relationships with payers and self insured companies on better models of care

Where to go from here

• Be the driver of change

• Be part of the solution

• Demonstrate measurable value

• Assume risk/ innovate

• Identify opportunities

• Consider needs all stakeholders

Grace Period

Grace Period

• Provision of the Affordable Care Act

• Grace period: 3-month period of nonpayment of premiums before discontinuing coverage

• Plans required to pay appropriate claims for services during first 30 days of the 3-month period

• Plans may pend claims for services during the last 60 days

– Unpaid premiums by subsidized beneficiaries could mean 60 days of uncompensated care

• APTA CMS comment letter for 2015 exchanges

• Making Sense of Health Reform Series: Grace Period:

– http://www.apta.org/HealthCareReform/MakingSense/

©2014 American Physical Therapy Association. All rights reserved. All

reproduction or redistribution prohibited.57

http://www.apta.org/HealthCareReform/MakingSense/

Grace Period: Issues

• Only applies to low income individuals receiving premium tax credits

• Increases uncertainty for providers

• May increase uncompensated care

• Likely difficult to collect copays and deductibles

• Provider collection limitations

• Notification of lapse in premium payment not standardized

Tips

Grace Period

• Verify patient insurance benefits upfront and check subsidy status

• Maintain and consistently follow facility’s indigent policy

• Establish and adhere to written Grace Period policy

• Amend patient financial agreement to address nonpayment of health insurance premium

• Be aware of state laws re: patient abandonment and anti-kickback

• Be aware of ethical considerations

• Collaborate with patient to minimize OOP

• Communicate with other treating clinicians

• Document all related conversations

Direct Access

Why Direct Access (DA)

• PT qualified professional

• Facilitates consumer choice in healthcare decision making

• Facilitates collaborative relationships

• Supported by data/studies

• Timely access to PT services important because….

• Delayed care = higher cost

• Delayed care = decreased functional outcomes

• Delayed care = frustrated patients

• Delayed care = less effective result of service

Results DA Studies

• Patient centric

• No discontinuity of care

• Fewer PT visits (86% of physician referred)

• Lower average allowable PT claim ($347 v $420)

• Lower overall cost of care

• Lower overall health care use (MD visits, diagnostics, meds)

• No increased healthcare use 60 days post PT

• Safe/effective

• Continued patient/ physician collaboration

• No overuse w/removal MD gatekeeper

Does Direct Access increase risk?

• No per liability carriers/Federation of State Boards

• No increase malpractice/filed claims

• Can the PT Diagnose? Yes…

–No states prohibit PT diagnosis

–Authorized by state law

–Essential to PT practice

–Practice Disablement Model

–Necessary to determine interventions

APTA Actions

• Result of APTA and chapter legislative efforts

– All 50 states have some form of direct access

– Michigan/Oklahoma leg. passed 2014

– All states permit PT to evaluate w/o referral

– Varied DA restrictions

– Ongoing treatment requirements depend on state law

• Future legislative efforts

– Remove/reduce restrictions

– Eliminate barriers

APTA DA Member Survey

• Initial survey completed 2009

• Surveyed 9 states

• Purpose to determine:

– Extent of its use

– Variation by region

– Variation by practice setting

– Implementation or promotional strategies

– Impact of VA/PA state certification process

New DA Survey 2015

• Why? APTA needs member data to effect change

• Goals 2015 DA Survey:

– Compare use of DA w/ states surveyed 2009

– Identify types of facilities utilizing direct access

– Determine PT awareness of state specific regulations

– Determine provisions/restrictions detrimental to use DA

– Identify barriers to payment

– Identify effective marketing strategies

APTA DA Goals

• Eliminate legislative restrictions (state & federal)

• Secure payer policy facilitating payment for DA service

• Encourage dialogue w/physicians and payers

• Facilitate patient access

• Improve affordability

• Encourage models of care delivery that best serve the patient and healthcare system

• Educate PT’s, consumer, payer/self insured employer on benefits DA

Exchange Plan PT Benefits

Benchmark Plans

• Each state has an established “Benchmark Plan”

• Cover “Essential Health Benefits” mandated by ACA

• Habilitation and Rehabilitation are “Essential Health Benefits”

• Specifies minimum coverage

• May impose limits on physical therapy:

– number of visits, cap on #/type services, combine benefit w/other disciplines, cap on visits per condition

• Benchmark Plan rehabilitation benefits vary by state

• Participating qualified health plans must meet the minimum standard established by the benchmark

What to do:

• Chapters monitor the state benchmark plan

• Providers should:

–Be aware of the state benchmark plan

–Watch for exchange plans with unusual restrictions

–Inform state chapters of issues

–Contact APTA at [email protected]

• APTA and chapters

–Work w/ state representatives to address restrictions

–Investigate/advocate for better coverage

mailto:[email protected]

THANK YOU

Documents

Payment Reform: An Innovative Approach to Advanced