Polsinelli PC. In California, Polsinelli LLP Population Health in the Age of Health Care Reform Texas Association for Healthcare Financial Administration

Polsinelli PC. In California, Polsinelli LLP

Population Health in the Age of Health Care ReformTexas Association for Healthcare Financial Administration Seminar Series - Wichita Falls, TexasMarch 14, 2014

Joshua M. WeaverPolsinelli, PC(214)[email protected]

Ashley E. JohnstonGray Reed & McGraw, PC(469) [email protected]

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Agenda

What is Population Health?

Why the Focus on Population Health?

Current Trends

Potential Delivery Models

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Population Health (“PH”) is a measurement of overall health outcomes across a defined population. It is the optimization of the health of a defined population.

The goal of population health management (“PHM”) is to keep a patient population as healthy as possible, minimizing the need for expensive care such as ED visits and hospitalizations.

Focus on needs of the population by focusing on the individual needs of the patient, from wellness and prevention to disease management

Care for entire population, not just those who seek care

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Patient populations can be categorized into one of three segments:– Low risk patients (healthy or well-managed patient) [60%-80%]– Rising-risk patients (multiple risk factors) [15%-35%]– High-risk patients (complex illness, co-morbidities, and

psychosocial problems) [5% - yet accounts for the majority of health care spending]

Different goals based upon risk of patients– Low-risk Population Goal: maintain population in healthy state

through prevention and wellness programs– Rising-risk Population Goal: to avoid unnecessary care and

prevent migration to the high-risk category– High-risk Population Goal: providing intensive, comprehensive

and proactive management so that episodic and expensive care can be avoided



Different views of what is a “population”

– Clinical View: those enrolled in the care of a specific provider, hospital system, insurer, or network

– Public Health View: those in the geographic community

– Illness-Specific View: Populations with Specific Illnesses– Ex: Cardiac, diabetes



Requires a significant change in way of thinking and in the practice patterns of providers.

Instead of doing more to earn more, providers will be rewarded for efficiency and quality.

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Key Characteristics of Population Health

Organized system of care; Use of multidisciplinary care teams; Coordination across care settings; Enhanced access to primary care; Centralized resource planning; Continuous care Patient self-management education

– Apps (numerous apps that track care, medications, lifestyle, health– Group visits

A focus on health behavior and lifestyle changes; Use of health information technology

– Importance of Integration

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US Health Care is Poor Quality and High Cost

250,000 deaths per year due to medical error US quality ranks low when compared to other developed countries Health care comprises 18% of GDP . . . and increasing $2.5 trillion spent in 2009*; Projected growth to 4.6 trillion by 2020**

◦ “Waste” in 2009 = $765 Billion (30% of total): $210B - unnecessary services $190B - excessive administrative costs $130B - inefficiently delivered services $105B - prices too high $75B - fraud $55B - missed prevention opportunities

43 Million people in Medicare today; 78 Million by 2030 (last year of baby boomer eligibility)

$520B Medicare spending in 2010; $970B by 2021** By 2019, Medicare rates projected to be below current Medicaid rates*

Sources: *Commonwealth Fund; Institute of Medicine, 2011; Medicare Office of Actuary; ** Kaiser Family Foundation



Total Healthcare Expenditure as % of GDPUnited States vs. the World

(Source: World Bank)

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Healthcare in Crisis

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5,000

6,000

7,000

8,000

1980

1982

1984

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1988

1990

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1996

1998

2000

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2008

United StatesCanadaGermanyFranceAustraliaUnited Kingdom

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Average spending on health per capita

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2011.

• In 2010 we spent $2.6 trillion on health care, or $8,402 per person.

• The share of economic activity (GDP) devoted to health care has increased from 7.2% in 1970 to 17.9% in 2009 and 2010.

• Health care costs per capita have grown an average 2.4 % faster than the GDP since 1970.

• Half of health care spending is used to treat just 5% of the population (another argument for PH).


Examples of High CostsSource: Washington Post (March 26, 2013)









Affordable Care Act – Expansion of insurance coverage (individual mandate, Medicaid expansion, insurance

exchanges)– Provisions aimed at improving quality (CMS Center for Medicare and Medicaid

Innovation, Patient-Centered Outcomes Research Institute)– Provider incentives to take responsibility for outcomes and quality (ACOs, HACs,

VBP, Readmission penalties, etc.)– Community Health Needs Assessments

SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (being considered by the House of Representatives)– Repeals the SGR and replaces it with a system focused on quality, value and

accountability– Rewards value over volume– Incentivizes movement to alternative payment models– Expands use of Medicare data for transparency and quality improvement

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2% reduction of Medicare MBU for IPPS for failing to report under IQR

2% reduction of Medicare MBU for OPPS for failing to report under OQR

No Medicare/Medicaid payment for HACs

VBP

1% DRG Reduction

VBP

1.25% DRG Reduction

VBP

1.5% DRG Reduction

VBP

1.75% DRG Reduction

VBP

2% DRG Reduction

Readmissions1% DRG Reduction



High HAC rates – 1% DRG Reduction

EHR Penalty 25% of MBU

EHR Penalty 50% of MBU

EHR Penalty 75% of MBUTotal: Over 6% of total

Medicare payments at risk !!!

FY2013 FY2014 FY2015 FY2016 FY2017



What Options Are Currently Available?

Current Trends


New Model Objectives

The “Triple Aim” is a framework developed by the Institute for Healthcare Improvement that describes an approach to optimizing health system performance. It is IHI’s belief that new designs must be developed to simultaneously pursue three dimensions, which called the “Triple Aim”:Improving the patient experience of care (including quality and satisfaction);Improving the health of populations; andReducing the per capita cost of health care.

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Change will happenThose who wait will be left behind

No single solution for everyone, butQuality, satisfaction and lower cost required!

Change will happenThose who wait will be left behind

No single solution for everyone, butQuality, satisfaction and lower cost required!


Each Patient Population Will Be Different and Will Require Different Approaches

Key considerations:– What does your patient population look like?– How can you best serve this population?– What is your goal?– The inevitable – how will you get reimbursed?

Key Considerations for all Models


In any situation, there must be an integrated system.– Will require collaboration among health care providers– Must develop relationships with community institution

outside health care setting Work with public health agencies, social service

agencies, schools, etc.– Technology / Information Exchange– Education



How Do You (or Can You) Integrate Population Health Into Current Delivery

Models?

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Current Available Delivery Models

Accountable Care Organizations

Clinically Integrated Networks

Bundled Payments

Narrow Networks

• Patient Centered Medical Homes

• Pay for Quality

• Service Line Co-Management

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How Well Do the Current Models Meet the Goals?

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Level of Integration

Less Effective More Effective

Current / Potential Delivery ModelsKey Considerations


Accountable Care Organizations

An accountable care organization is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.

Section 3022 of ACA allows ACOs to receive “shared savings” payment

NOT a pilot/demonstration Goal

– Break down silos between Part A and Part B payments.– Improve quality, improve patient experience and decrease

cost for a DEFINED POPULATION

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Clinical Integration

Clinical integration is a type of operational integration that enables patients to receive a variety of health services from the same organization or entity, which streamlines administrative processes and increases the potential for the delivery of high-quality healthcare.

Both an Antitrust and Operational Concept Physician competitors who do not share substantial financial risk but

engage in clinical integration also may use single source payor contracting if:– Establish and implement mechanisms creating high degree of

interdependence and cooperation in order to control costs and assure quality

– Create significant efficiencies and improvement in quality

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CIN/ACO Example: Legal, Relationship & Governance Structure

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CIN/ACO Entity (New)

Payers

CI and other contracts/ funds

FFSDr./

GroupsGroup Hospital

Health SystemCI Services

HIE, Portals, Messaging, Care Management, Credentialing

Governing Board

Participation Agreements (provider services)

IT Quality Finance Other

Other Prov.

CIN Governance – Board and Committees


CI Practical Requirements

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Peer Review

Clinical Ethics & Palliative Care

Order SetEditorial Board

Informatics

Acute Surgery

DVT/PE JOC

End of Life Care JOC

Pediatric Head CT JOC

Surgical Home JOC

Physician GovernancePhysician

Governance


Narrow Networks/Bundled Payments

Narrow Networks (NN): With narrow network plans, patients are only allowed to see physicians in the narrow network.

– Intel and Presbyterian Healthcare Services’ narrow-network, accountable care-style arrangement for Intel’s employees in New Mexico

Bundled Payment (BP): Defined as the reimbursement of health care providers (such as hospitals and physicians) on the basis of expected costs for clinically-defined episodes of care.

– Allocates risk to providers

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Why the Focus on NN/BPs?Shift to Self-Funding

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Employers Bearing More Risk, Turning to Providers as Allies

Percentage of Self-Insured Employers

Partially or Completely Self-Insured

Adopt new accountable payment models

Contract directly with hospitals, physicians, ACOs

Offer incentives for care coordination

Offer performance-based payments

In Place in 2013 Planned for 2014

Employer Interest in Provider-Oriented Strategies

Employers want a reliable product with predictable and stable costs


Group / Health System / Provider

Network Provider Agreement

Health System or Hospitals •Acute Care Hospitals •Rehab Hospitals•LTACH•HHA

Other providers•Acute Care Hospitals•Rehab Hospitals•LTACH•HHA•SNF

Commercial Payors

EmployersNetwork Provider Agreement

Participating Network Provider

Agreement

Physician Groups•Physician Services


Current Trends

Delivery System Reform Incentive Payment (“DSRIP”) Program

Clinical Preventative Services Group Visits Technology Advancements – Options for

Continued Improvement– Discharge Information

– Patient Education

– Patient Reminders etc.


Key Legal Considerations for all Models

• No one size fits all solution.

• Structural Options

• Forming the Entity

• Separate entity required?

• Tax and antitrust considerations

• Determination of participants

• What types of providers?

• How to structure physician participation (ownership, governing body, committees, compensation)

• Fraud and abuse/compliance considerations• Be wary of compensation stacking (i.e., multiple relationships with same

providers)33


• Tax Issues: Tax Exemption, Unrelated Business Income, Private Inurement & Benefit

• Antitrust issues: FTC/DOJ ACO Antitrust Enforcement Policy

• Peer review privilege

• Clinical Pathway and Protocol Development

• Contractual commitment

• Active physician/provider participation

• Create, implement, review

• Metrics and Scorecards

• Contractual commitment

• Clearly defined “rewards & punishments”

• Proactive enforcement

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Key Legal Considerations for all Models


• What Physicians are in and out?

• Who are the Physician champions?

• Physician leadership in development and implementation is key.

• “Only Engaged and Aligned Physicians need apply”

• Accredited Investor Inquiry

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Discussion


Joshua M. Weaver(214) 661-5514

[email protected]

Josh and Ashley provide counsel to health care providers on complex operational, transactional and compliance issues. They have experience advising hospitals, ambulatory surgery centers, independent diagnostic testing facilities, laboratories, pharmacies, physicians and other health care providers on various issues, including matters implicating the Federal Anti-Kickback Statute, the Physician Self-Referral ("Stark") Statute, the Texas Illegal Remuneration Statute, The Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), the False Claims Act, and the Emergency Medical Treatment and Active Labor Act ("EMTALA"), among many others. Josh and Ashley also advise clients with respect to reimbursement issues and payor audits. Their transactional experience includes drafting and negotiating a variety of health care contracts, including professional services agreements, physician employment agreements, asset purchase agreements, management and co-management agreements, business associate agreements, operating agreements, and equipment and space leases, among others.

Josh and Ashley also assist clients in the formation and syndication of hospitals, ASCs, joint ventures, pharmacies, and laboratories.

Josh and Ashley are both Board Certified in Health Law by the Texas Board of Legal Specialization.

Ashley Johnston(469) 320-6061

[email protected]

Documents

Polsinelli PC. In California, Polsinelli LLP Population Health in the Age of Health Care Reform Texas Association for Healthcare Financial Administration