Bundled Payment: 15,000 Its Time to Get Real 10,000 $11,079 5,000 - - PDF document

Bundled Payment: It’s Time to Get Real

Robert Mechanic, MBA Brandeis University Estes Park Institute March 26, 2012

• Avg. 2008 Medicare Payment for Select DRGs

$11,079 $5,347 $5,322 $6,437 $6,075 5,000 10,000 15,000 20,000 25,000 470 ‐ Maj. Joint 194 ‐ Pne w/CC 292 ‐ Heart Fail w/CC 683 ‐ Renal Failure w/CC 190 ‐ COPD w/MCC

Index Admission

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Source: RTI Inc, Post‐Acute Care Episodes: Expanded Analytic File, June 2011

2008 Medicare Acute and Post‐Acute Payments for Inpatient‐Initiated 30‐Day Episodes

5,000 10,000 15,000 20,000 25,000 470 ‐ Maj. Joint 194 ‐ Pne w/CC 292 ‐ Heart Fail w/CC 683 ‐ Renal Failure w/CC 190 ‐ COPD w/MCC

Index Admission Post Acute

$20,672 $12,419 $15,472 $14,196 $16,842

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Source: RTI Inc, Post‐Acute Care Episodes: Expanded Analytic File, June 2011

2008 Medicare Acute and Post‐Acute Payments for Inpatient‐Initiated 90‐Day Episodes

5,000 10,000 15,000 20,000 25,000 470 ‐ Maj. Joint 194 ‐ Pne w/CC 292 ‐ Heart Fail w/CC 683 ‐ Renal Failure w/CC 190 ‐ COPD w/MCC

Index Admission 30 day Post Acute 90 day Post Acute

$21,967 $14,726 $19,102 $16,590 $20,195

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Source: RTI Inc, Post‐Acute Care Episodes: Expanded Analytic File, June 2011

Post‐Acute Care Spending For 30‐Day Episode: DRG 470 – Maj. Joint Repl.

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Percent With Claim Mean Cost Per Service User Index Admission 100.0% $11,079 Rehab 12.7% $13,021 SNF 39.4% $9,347 LTAC 0.3% $32,298 Home Health 68.6% $3,538 Readmission 11.7% $12,798

Source: RTI Inc, Post‐Acute Care Episodes: Expanded Analytic File, June 2011

94% Percent of Beneficiaries Discharged Directly to Post‐Acute Care

Post‐Acute Care Spending For 30‐Day Episode: DRG 292 – Heart Fail. With CC

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Percent With Claim Mean Cost Per Service User Index Admission 100.0% $5,322 Rehab 2.9% $16,744 SNF 48.6% $13,222 LTAC 1.6% $35,233 Home Health 66.2% $4,422 Readmission 41.8% $17,682

Source: RTI Inc, Post‐Acute Care Episodes: Expanded Analytic File, June 2011

39 Percent of Beneficiaries Discharged Directly to Post‐Acute Care

Post‐Discharge Cost Distribution: CHF (90 Days)

$60,000

$40,000

$20,000 25th 50th 75th

Bundle Building Activities

• Episode Construction

−Individual versus pooled DRG bundles −Align with clinical improvement strategy

• Exclusions

−Cannot exclude patients in selected DRGs −Readmission exclusions −Part B service exclusions

• Episode length (30 – 180 days)
• Risk adjustment

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Episode: CHF Admission

Percent Inpatient $

• Pct. Total

Episode $

DRG 291 Heart Failure & Shock w/MCC 1.6% 2.0% DRG 292 Heart Failure & Shock w/CC 0.8% 1.2% DRG 293 Heart Failure & Shock w/o CC,MCC 0.4% 0.6% Episode Total 2.8% 3.8%

Episode: Total Joint Replacement

Percent Inpatient $

• Pct. Total

Episode $

DRG 469

• Maj. Joint Replacement w/MCC

0.7% 0.7% DRG 470

• Maj. Joint Replacement w/o MCC

5.1% 4.2% Episode Total 5.8% 4.9%

Examples

• St. Francis Hospital

Opportunity Analysis

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Facility Profile: St. Francis Hospital

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Episode Spending by Setting: TJR

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Episode Spending by Setting: CHF

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Peer Group Benchmarking: CHF Episode Performance of Post‐Acute Facilities Saint Francis Hospital Patients

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Congestive Heart Failure

Another View of Risk in The CMS Pilot?

100.0% 40.0% 4.0% 0.2%

0% 20% 40% 60% 80% 100% Total revenue Medicare inpatient revenue Episode DRGs 3% CMS Discount

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Source: RTI Inc, Post‐Acute Care Episodes: Expanded Analytic File, June 2011

What Next?

• Assess the opportunity
• Identify physicians you can work with

– Gainsharing opportunity may help

• Identify post acute care partners
• Establish a unit to work with patients

after they leave the hospital

• Establish a monitoring system

Brandeis University

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Questions

Robert Mechanic The Heller School for Social Policy & Management The Health Industry Forum Brandeis University mechanic@brandeis.edu www.healthforum.brandeis.edu

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