The Role of POCTin the World of

Value-based Contracts

Matt ModleskiExecutive Vice President of Corp/Business Development

Orchard Software CorporationMarch 18, 2020

1. Illustrate healthcare’s payment model progression—from fee-for service to fully-delegated risk.

2. Identify the key components of a value-based contract.

3. Describe the aspects of Medicare Advantage (MA) as a subset of a value-based contract.

4. Appraise the value that POCT brings to value-based contracts (with real-life examples).

Learning Objectives

Healthcare’s Payment Model Progression

The Continuum of Payment Models

Fee-for-Service (FFS)

Accountable Care Organizations (ACOs)

Value-based Contracts (VBCs)

Fully-delegated Risk

• Fee-for-Service (FFS)– Providers paid for services provided on transactional basis

• More transactions = more revenue

• Shared Savings (Upside Risk)– Rewards providers for reducing healthcare spending below an

expected target

• Shared Risk (Downside Risk)– Performance based incentives

– Share costs savings + disincentives for overspending

Terms Explained

Value-based Contract (VBC) ComponentsCost & Quality

• Providers still paid for services provided

• Incentives built into contracts for additional payments for lowering total cost of care AND hitting quality metrics

- Example : A percentage of diabetics with A1cs below a certain threshold (8.0).

• Cost threshold (MLR or BCR) established by payer in each specific market

• Customized approach - payors look at areas that can be improved upon and build supporting metrics

Clearing Up Green Words

Fully Delegated Risk (Medicare Advantage)

• Provider group with “fully delegated risk” now pays all medical bills (claims) patients incur across the continuum of care as if they were the “traditional” payer.

• Amount of money available is based on Risk Adjustment Factor (RAF) which is based on face-to-face diagnosis and precise documentation.

– PMPM dollar figure is established by CMS in each market for a RAF score

of 1.0 and then multiplied by the patient’s actual RAF score, which aggregates based on documented disease burden.

Clearing Up Green Words

• As HCOs take on more risk, it becomes imperative that patients get procedures/results while they are still in the office.

• Downside risk forces HCOs to proactively handle patient needs in a timely manner.– For example, providers cannot write an order for labs and expect

patients to come back later.

Why POCT is Important in VBC

POCT can be utilized in this scenario to provide immediate access to results, thereby speeding time to diagnosis and treatment and closing a care gap!

How the $$ Flows

Medicare Vs. Medicare Advantage

CMSCMS

Providers

Providers

Medicare

MedicareAdvantage

Commercial Payers

Examples• UHC• Aetna• Humana

Calculating Risk Scores

• AVERAGE MEDICARE PATIENT’s RAF IS 1.0

• Starting RAF score is determined by demographics such as age, race, etc. + a market based adjustment

• For easy math let’s say $1,000 PMPM (or $12,000 annually)

• CMS reimburses 1% HIGHER for every 0.01 RAF increase

• Approximately $100 PMPM for every 0.1 RAF increase or in the example above the payment for that member would go to $1,100 monthly or $13,200 annually

How RAF Affects Reimbursement

Risk Adjustment Factor

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

Diagnosis Code RAF ScoreProper

Documentation

Drives the RAF Score

Drives the Reimbursement

Retains the Reimbursement

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

1. Diagnosis-Face-to-face Visit (NP or higher)

2. Status or Condition –Stable condition, worsening, labs ortests ordered, medications adjusted

3. Plan of Action –COPD, Stable, continue currentmedications

Valid HCC Documentation Requires 3 Points

Hierarchical Condition Codes

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

Documentation for Every Diagnosis must have the M.E.A.T.

Monitor—signs, symptoms, disease progression, diseaseregression

Evaluate—test results, medication effectiveness,response to treatment

Assess/Address—ordering tests, discussion, reviewrecords, counseling

Treat—medications, therapies, other modalities

The Importance of M.E.A.T

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

“Every patient with diabetes should be evaluated for the many manifestations, co-morbidities of the disease, and complications with the progress notes and tests showing that this evaluation was done.”

DIAGNOSIS ICD-10 HCC WEIGHTWithout complications E11.9 0.104DMW/Kidney Comp. E11.2X 0.318DM W/OphthalmicComp. E11.3X 0.318DMW/Neurologic Comp. E11.4X 0.318DM W/CirculatoryComp. E11.5X 0.318DM w/Oral Comp. E11.6X 0.318DM W/CKD E11.22 0.318

Documentation is Critical for MA

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

No Documentation – No Money

Stage Severity GFR (mL/min) ICD-10 HCC Wt

Stage 1 90 N18.1 0

Stage 2 Mild 60-89 N18.2 0

Stage 3 Moderate 30-59 N18.3 0

Stage 4 Severe 15-29 N18.4 0.237

Stage 5 Kidney Failure <15 N18.5 0.237

ESRD Code w/renal dialysis status

Z99.2

Requiring chronic dialysis or transplant

N18.6 0.422

CKD Unspecified

CKD Unspec. N18.9 0

Chronic Kidney Disease

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

E11.0 Diabetes without complications (HCC 19)

• Diabetes without complications (HCC 19) - RAF 0.121

• $800.00 PMPM X 0.121 = $96.80/PMPM

• X 12 months = $1161.60/year

• X 500 members = $580,000/year

Financial Impact of Poor Documentation

E11.51 Diabetes with Diabetic Peripheral Angiopathy

• Diabetes w/complications (HCC 18) RAF 0.374

• Vascular Disease (HCC 108) RAF 0.319

• $800.00 PMPM X (0.374 + 0.319) = $554.40 PMPM

• X 12 months = $6,652.80

• X 500 members = $3,326,400.00

Financial Impact of Proper Documentation

Without the right documentation, $2,745,600 unavailable for patient resources

Source: Resnick, R. Risk Adjustment 2018 and RAF Scores 101. Accessed at: http://www.tmgipa.com/rafcoding318a.pdf

Measuring Performance

“HEDIS is a comprehensive set of standardized performance measures designed to provide purchasers and consumers with the information they need for reliable comparison of health plan performance.”

• HEDIS performance tools are used as part of the Medicare Star Rating system.– Help determine if medical services are improving patient

outcomes

HEDISHealthcare Effectiveness Data and

Information Set

Source, CMS.gov: https://www.cms.gov/Medicare/Health-Plans/SpecialNeedsPlans/SNP-HEDIS

HEDIS® includes more than 90 measures across 6 domains of care:

• Effectiveness of Care• Access/Availability of Care• Experience of Care• Utilization and Risk Adjusted Utilization• Health Plan Descriptive Information• Measures Collected Using Electronic Clinical Data

Systems

Assesses adults 18–75 years of age with diabetes (type 1 and type 2) who had each of the following:

• Hemoglobin A1c (HbA1c) testing• HbA1c poor control (>9.0%)• HbA1c control (<8.0%)• HbA1c control (<7.0%) for a selected population• Eye exam (retinal) performed• Medical attention for nephropathy• BP control (<140/90 mm Hg)

HEDIS ExampleComprehensive Diabetes Care (CDC)

HEDIS Example

Source: HEDIS 101 for Providers [2019] Improving Quality of Care. Accessed at https://www11.empireblue.com/provider/noapplication/f5/s2/t0/pw_e194909.pdf?refer=ehpprovider

HEDIS Example - Screening

Source: HEDIS 101 for Providers [2019] Improving Quality of Care. Accessed at https://www11.empireblue.com/provider/noapplication/f5/s2/t0/pw_e194909.pdf?refer=ehpprovider

• Medicare Advantage Plans are rated on how well they perform in five different categories:1. Staying healthy: screenings, tests, and vaccines

2. Managing chronic (long-term) conditions

3. Plan responsiveness and care

4. Member complaints, problems getting services, and choosing to leave the plan

5. Health plan customer service

Medicare STAR Rating System

Source: Medicare Rights Centerhttps://www.medicareinteractive.org/get-answers/medicare-health-coverage-options/changing-medicare-coverage/how-to-compare-plans-using-the-medicare-star-rating-system

• Medicare reviews plan performance yearly and releases new star ratings each fall…

CMS Star Ratings - Examples

Star Rating Measure Description

Diabetes Care: Blood Sugar Controlled

Percent of plan members with diabetes who had an HbA1c test during the year that showed their average blood sugar is under control (< 9%)

Diabetes Care: Kidney Disease Monitoring

Percent of plan members with diabetes who had a kidney function test

HEDIS, STAR Performance Metrics

ID Measure Name Type Weight

ABA Adult BMI Assessment Hybrid 1.0 4.00 4.00

CDCEYE Diabetes Care – Eye Exam Hybrid 1.0 3.00 3.00

CDCNEP Diabetes – Kidney Disease Hybrid 1.0 4.00 4.00

CDCA1C9 Diabetes – Blood Sugar Hybrid 3.0 4.00 5.00

MAD Med Adherence – Diabetes Acumen 3.0 3.00 4.00

CBP Controlling Blood Pressure Hybrid 3.0 3.00 2.00

MAH Med Adherence – Hypertension Acumen 3.0 4.00 5.00

MAC Med Adherence - Cholesterol Acumen 3.0 3.00 4.00

Measure Description

Measure Level Performance STAR Ratingsby Plan

Value of POCT in VBC

• Health systems are entering into value-based contracts with payers that incentivize improved patient outcomes and costs.

• A lab increases its value to its patients and its parent organization by making the organization successful in the VBC.

– extract and present key data

– identify underlying risky medical conditions

– incorporate lab results that link to adjusting RAFs

– use lab results to show achievement of HEDIS or other performance measures

Key Takeaway: Labs can help their patients and their organization achieve success in value-based contracting!

• 2 categories that are in almost every VBC are diabetes and chronic kidney disease.

• Hgb A1c and Creatinine are well-established as accurate as POCT.

VBC & POCT

• Seek out those in your organization that are involved in VBC.– CFO, Director of Finance

– Quality or PHM Manager

– Practice Administrator, COO

– Revenue Cycle/HIM Manager

• Learn the status of VBC within your organization.• Make it known that you are knowledgeable and have

data that is valuable for VBC.• Join committees that address VBC tracking, if available.• Consider where POCT can be implemented to impact VBC

and quality measures.

How Do I Get Involved?

• Healthcare is in the process of transitioning to value-based reimbursement models.

• Most HCOs are involved in some type of value-based contract (VBC); & are responsible for quality & costs.

• Medicare Advantage (MA) is one type of VBC and is the fastest growing healthcare insurance in the U.S.

• POCT brings to value to value-based contracts with real-time data that can both improve care and positively impact costs.

Key Points from Learning Objectives

Thank you!