CNYCC Joint Board and Finance Committee Forum December 1, 2015 - - PowerPoint PPT Presentation

CNYCC Joint Board and Finance Committee Forum

December 1, 2015 Michael Bailit | Bailit Health

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• 1. Value-Based Payment Overview
• Environmental Context
• New York State Roadmap
• DSRIP Payment Reform Models
• Expectations of the PPS
• 2. PPS Contracting Options
• Pros and Cons
• 3. Operational Implications
• 4. Discussion

Meeting Agenda

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Value-Based Payment

• Overview
• Environmental Context
• New York State Roadmap
• DSRIP Payment Reform Models
• Enter Medicare?

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Introduction to Value-Based Payment

• For many years health care has been

purchased on a piecework basis, where delivery of each service generates a separate payment.

• What do you get when you pay per piece?
• You get lots and lots of pieces – especially for

high margin services like surgery and imaging.

• Payment drives care delivery.

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Canada OECD Median United States France

MRIS PER 1,000

The US delivers more higher margin services than

• ther developed countries...

50.6 52.8 90.9 106.9

Source: D. Squires and C. Anderson, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.

Canada OECD Median United States France

PERCENT OF POPULATION 65+ WITH TWO OR MORE CHRONIC CONDITIONS

…but we’re not any healthier!

56 43 68 N/A

Source: D. Squires and C. Anderson, U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries, The Commonwealth Fund, October 2015.

• Payment reform is intended to create provider

economic incentives to improve health care delivery and produce high-value, cost-effective care.

• There are multiple alternative payment models to fee-

for-service payment.

• There is also increasing evidence for some alternative

payment models of critical success factors.

• Some believe that one critical success factor for

payment reform is matching the strategy to the geographic region and its delivery system. Goals of Payment Reform

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• Payment reform is happening

all around us and becoming an increasing focus for Medicare, states, commercial insurers and employers.

• The status quo is not a realistic
• ption.
• While NYDOH has created a

detailed roadmap for payment reform, there is a real

• pportunity to shape a future

path that appears to work best for CNYCC’s provider community and the patients it serves.

What Does the Road Ahead Look Like for Central New York?

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• People want more accessible, coordinated, well-

informed care:

• One provider responsible for primary care and coordinating

care (91%)

• Place to go for care at night and on weekends (89%)
• Doctors with easy access to your medical records (96%)
• Information on quality of care for different providers (95%)
• Information about costs of care before you get it (88%)
• People think doctors working in teams or groups

improves care

• Doctors and nurses working closely as teams (88%)
• Doctors practicing with other doctors in groups (65%)

Forces Behind Change: Consumers

9 Source: How, S. et al. “Public views on US health system organization: a call for new directions.” The Commonwealth Fund. August 2008 and Guterman, S. “What do we expect from ACOs?” AcademyHealth Annual Research Meeting June 8, 2014

• Secretary Burwell set ambitious goals for Medicare:
• 2016: 30% of payments will be made through alternative payment

models

• 2018: 50% of payments will be made through alternative payment

models; and 90% of FFS payments be linked to quality or value.

• It is testing many different Alternative Payment Models, including:
• Population-based payment through several different ACO models (i.e.,

Pioneer ACO, Medicare Shared Savings Program, Next Gen)

• Primary care payment through several different patient-centered

medical home programs (e.g., Comprehensive Primary Care Initiative)

• Episode-based payment through voluntary and mandatory programs

(i.e., Bundled Payment for Care Improvement, and Comprehensive Care for Joint Replacement)

Forces Behind Change: CMS (through Medicare & Medicaid)

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Medicare is Increasingly Linking FFS to Value…

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Source: Conway, P. “CMMI Update” November 10, 2014

…and Making FFS a Less Attractive Option in the Long Run

Slide adapted from: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html

Fee Schedule Updates

*Qualifying APM conversion factor **Non-qualifying APM conversion factor

0.5 0.5 0.5 0.5 0.75

QAPMCF*

0.25

N-QAPMCF**

MIPS

Certain APMs

5 % Incentive Payment Excluded from MIPS

Qualifying APM Participant

Medicare Payment Threshold Excluded from MIPS

FEE

MIPS Payment Adjustment (+/-)

PQRS, Value Modifier, EHR Incentives

Clinical Practice Improvement Activities

4 % 5 % 7 % 9 %

Meaningful Use of Certified EHR Technology Quality Resource Use

2015 and

earlier

2026 and

later

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

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Majority of States are in the Process of Health Care System Redesign

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Designed by Showeet.com

Model Test Awardees Model Design Awardees

Round One and Round Two Awardees. Source: CMS.gov

• 34 states, three

territories and Washington, DC all received State Innovation Model (SIM) Grants – which requires multi-payer payment reform activities

The Commercial Sector in New York is Changing, Too

Hospital PCPs Specialists

47% 46% 15% Percent of commercial payments that are value-oriented in NY

Source: Catalyst for Payment Reform, 2013

And the tap is expected to stay open and affect more payments over the next several years

NYS Roadmap For Medicaid Payment Reform

1 3 2

No single path to payment reform is prescribed, however NYDOH will offer standardized options of different payment models from which MCOs and PPS’ can choose. Vision of three different types of integrated services with coordination between them to serve the unique needs of the Medicaid population: 1) Integrated primary care 2) Episodic care for highly specialized services (e.g., maternity, joint replacement) 3) Specialized continuous care (e.g., for special needs populations) Goal for 80-90% of managed care payments to providers to be by value- based payment methodologies by the end

• f the DSRIP

demonstration.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10.” Bill Gates on Change

NYS Roadmap For Medicaid Payment Reform

Level 0 VBP Level 1 VBP Level 2 VBP Level 3 VBP (only feasible after experience with Level 2; requires mature PPS) FFS with bonus and/or withhold based on quality scores FFS with upside-only shared savings available when “outcome” scores are sufficient

(For PCMH/APC, FFS may be complemented with PMPM supplemental payment)

FFS with risk sharing

• upside available

when outcome scores are sufficient Prospective capitation - PMPM or bundle (with

• utcome-based

component)

Goal 80-90% of MCO Payments to Providers Falls within Levels 1 - 3

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Payment Reform Models in New York State’s DSRIP Program

TOTAL CARE FOR TOTAL POPULATION TOTAL CARE FOR SUB-POPULATION BUNDLES INTEGRATED PRIMARY CARE

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Total Care for a Total Population

• Defines a budget on a per-capita basis for a broad

population of patients for whom the provider assumes clinical and financial responsibility.

• Populations can be defined based on enrollment (e.g.,

PCP selection) and/or on attribution (e.g., assigned to the provider based on visit history).

• Most often providers share in savings generated (“shared

savings”), but are sometimes held accountable for losses too (“shared risk”).

• Quality is incorporated into the model by diminishing

savings distributions or mitigating financial losses.

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Total Care for a Sub-Population

• Difference between this and Total Care for a Total

Population is just a narrowed population focus.

• The reasoning is that certain subpopulations may need

more specialized services and are best served holistically by providers skilled in their unique needs.

• The New York State Roadmap defines subpopulations

as individuals living with HIV/AIDS and individuals in the MLTC/FIDA, HARP and DISCO populations.

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Bundled Payments

• A fixed dollar amount that covers a set of services for

a defined period of time.

• Payment is typically administered on a FFS basis with

retrospective reconciliation to an episode budget. There are examples of prospective (“bundled”) payment in use, however.

• Most often providers share in savings generated

(“shared savings”), but are sometimes held accountable for losses too (“shared risk”).

• Quality is typically a component of payment – either

influencing gain/loss distribution, or as a separate bonus.

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Integrated Primary Care

• Payment is typically administered on a fee-for-service basis

with a PMPM supplemental payment that might be made monthly or quarterly. This type of arrangement is typically referred to as “patient-centered medical home” or “advanced primary care.”

• In New York, integrated primary care arrangements that

contain:

• a shared savings component on total cost of care will be considered

VBP Level 1

• a shared risk component on total cost of care will be considered

VBP Level 2

• PMPM capitated payment for primary care will be considered VBP

Level 3

• Quality must be a component in each of the VBP Levels.

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• Providers and MCOs are free to make their own value-

based payment arrangement, as long as they meet some broad objectives:

• 1. Be patient-centric and integrated around one or

multiple conditions, subpopulation or total population

• 2. Shared savings and losses calculations must

consider both clinical quality and cost

• 3. Minimum level of standardization between

comparable VBP arrangements (defined in the roadmap) is required to for statewide transparency

• (e.g., a region could define its own episode for any condition

not already being considered, but would have to use the state standard for conditions being defined (e.g., maternity))

Off-Menu Options

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• Off-menu options could include, but are not limited to:
• Bundles for conditions not included in the Roadmap
• A focus on a subpopulation within a bundle (i.e., low-

risk pregnancy episode)

• Any Medicare APM program (BPCI, CPC)
• Medicare or commercial ACO models
• Off-menu options will not be supported with data

supplied by DOH. Off-Menu Options

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• MCO: By waiver Year 5, all MCOs must employ non-fee-for-service

payment systems that reward value over volume for at least 90% of their provider payments.

• MCO and PPS1:
• In DY 2 (2016), every MCO – PPS combination will be

requested to submit a growth plan outlining their path towards 90% value-based payments.

• End of DY 3 (2017), every MCO – PPS combination will have

at least a Level 1 VBP arrangement in place for PCMH/APC care and one other care bundle or subpopulation (a Level 1 arrangement for the total cost of care for the total population would count as well). PCMH/APC care is selected here because of its vital role in realizing the overall DSRIP goals.

• 1 Per timeline on page 38 of the Roadmap
• Expectations of MCOs and of the PPS

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• End of DY 4 (2018), at least 50% of the State’s MCO payments will

be contracted through Level 1 VBPs. The State aims to have ≥ 30% of these costs contracted through Level 2 VBPs or higher at this time, yet this aim may be adjusted depending on the overall trend towards financial sustainability and high value care delivery as measured through overall DSRIP measures and cost of care measures for bundles and (sub) populations.

• End of DY 5 (2019), 80-90% of the State’s total MCO-PPS

payments (in terms of total dollars) will have to be captured in at least Level 1 VBPs. The State aims to have ≥ 50-70% of these costs contracted through Level 2 VBPs or higher at this time, yet this aim may be adjusted depending on the overall trend towards financial sustainability and high value care delivery as measured through overall DSRIP measures and cost of care measures for bundles and (sub)populations. The minimum target for end of DY 5 is 35% of total managed care payments tied to Level 2

• r higher.

Expectations of MCOs and of the PPS

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One More Thing You Should Know

• DOH has entered early

exploratory discussions with CMS about having Medicare align its payment models with those defined in the Roadmap.

• CMS has interest in multi-

payer/all-payer approaches (e.g., Medicare waivers in MD, pending in VT).

• This activity is worth

tracking.

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