June une 2018 2018 Introduct ction ons Steve Farmer, MD, F - - PowerPoint PPT Presentation

PRICI CING METHOD ODOL OLOG OGY FOR CL CLINICIANS AN S AND D ADM ADMINIS ISTRATORS

June une 2018 2018

Steve Farmer, MD, F FACC, CC, F FASE ASE

• Senior Medical Officer
• CMS Innovation Center
• Practicing Cardiologist

2

Elizabeth Cur Currier, MBA/MPH PH, L LSSG SSGB, FACM CMPE PE

• Physician Practice Administrator
• Senior Improvement Advisor
• CMS Innovation Center

Introduct ction

• ns

Webcast O Outline

3

• BP

BPCI CI Adv Advance ced M d Model Co Conce cept Revi view

• Clin

linic ical E l Epis isodes

• Target P

Pricing Methodol

• logy

gy: Acute C e Care Ho Hospital al ( (ACH)

• Target P

Pricing Methodol

• logy

gy: Physician G Grou

• up

Practice ce ( (PGP) P)

• Reco

conciliation

• Summa

mary

• Addition
• nal

al R Resou

• urces

es

4

BP BPCI CI AD ADVAN ANCE CED M MODEL L CONCE CEPT

BP BPCI CI Adv Advanc anced T ed Tes ests a D a Differ eren ent Payment Approa

• ach

ch

5

Establishes an “accountable party” Shifts emphasis from individual services towards a coordinated Clinical E Episode Clinical Episodes are assessed on the quality and cost of care

Why C Clinical Ep Episod

• de B

Bundles? ?

6

Pr Promote tes a patient-centered approach t to care Provide des important A Advanc nced d Alternative P Payment Model (Ad Advanced APM APM) and Merit-Ba Based ed Incentive e Payment System ( (MIPS) ) APM o

• pportu

tunity for specialty p physicians Ap Applies lessons learned f from Bundled P Payments for Care Imp mprovemen ent ( (BPCI CI) Employs Clin inical l Epis isodes t that are clin linically in intuit itiv ive, concrete, a and a actionable

How Doe

• es B

BPC PCI A Advance ced Wor

• rk?

7

At th t the e en end of

• f ea

each ch P Per erformance e Per eriod, , quality ty a and cos

• st

t per erformance a e are a e asses essed ed. Car are p provided u under stan andar ard f fee-fo for-ser ervi vice ce ( (FFS) paymen ents. Clinical al Ep Episo sode a attributed to PGP or A ACH CH Clinical E Episod

• de tr

e trigger ered ed b by ei eith ther er a an inpati tien ent t (IP) ) hos

• spital stay (Anch

chor S Stay) or ) or ou

• utp

tpati tien ent ( t (OP) proced cedure ( e (Anchor P Proced

• cedure)

8

CL CLINICA CAL E L EPISO SODES

Clinical Ep Episod

• de L

Length

9

EPISODE

Anchor Stay 90 Days

EPISODE

Anchor Procedure 90 Days

OP P Clinical Ep Episode: : Anchor Procedure + 90 days beginning on the day of completion of the

• utpatient procedure

IP P Clinical Ep Episode: : Anchor Stay + 90 days beginning the day of discharge

Se Servi vice ces I Incl cluded i in the Clinical Ep Episod

• de

10

• IP or OP hospital services that

comprise the Anchor Stay or Anchor Procedure (respectively)

• Physicians’ services
• Other hospital OP services
• IP hospital readmission services
• Long-term care hospital (LTCH)

services

• Hospice services
• Inpatient rehabilitation facility (IRF)

services

• Skilled nursing facility (SNF) services
• Home health agency (HHA) services
• Clinical laboratory services
• Durable medical equipment (DME)
• Part B drugs

Readmission

• n Ex

Excl clusion

• ns

11

Single list of e excluded M MS-DRGs a apply ly to Cli linical Epis isodes, whic ich will ill inc nclude 132 132 MS-DRG RGs:

Transplant & Tracheostomy Ventricular Shunts Cancer (when cancer is explicitly indicated by MS-DRG) Trauma

Se Servi vice ces Ex Excl cluded f from

• m the Clinical Ep

Episod

• de

12

Blanket e exclusions:

• Blood clotting factors to

control bleeding for hemophilia patients

• New technology add-on

payments under the IPPS

• Payments for devices, status

indicator H, with pass- through payment status under the OPPS

Part B B ser ervice ces: s:

• Excluded only if incurred

during an excluded ACH admission or readmission

• BPCI Advanced will not

follow the clinically related criteria guiding Part B exclusions used in BPCI

Elig ligib ible le A ACHs

13

• Not

t all ACHs m may p parti tici cipate i e in BPCI A Advance ced

• Critical Access Hospitals
• Selected Cancer Hospitals not participating in the Prospective Payment

System

• Inpatient Psychiatric Facilities
• Hospitals in Maryland
• Hospitals participating in the Rural Community Hospital demonstration
• Rural Hospitals participating in the Pennsylvania Rural Health Model
• Hos
• spital i

is CJR parti tici cipant

• CJR episodes take precedence over BPCI Advanced for Major Joint

Replacement of the Lower Extremity (MJLRE) Clinical Episodes

• No MJLRE Target Price will be provided at CJR hospitals
• CJR hospitals may participate in non-MJLRE Clinical Episodes

Benefici ciary Ex Excl clusion

• n C

Criteria

14

Ben enefici iciaries a are e e excl cluded ed if:

• They are covered under United Mine

Workers or managed care plans (e.g. Medicare Advantage, Health Care Prepayment Plans, or cost-based health maintenance organizations)

• They are eligible for Medicare on the

basis of end-stage renal disease (ESRD)

• They die during the Anchor Stay or

Anchor Procedure

• They are not eligible for Medicare Part

A, enrolled in Part B for the entire Clinical Episode

• Medicare is not the primary payer

15

TARGET ET PR PRICING M MET ETHODOLOGY ACU CUTE CAR CARE H HOSPITALS ALS (ACH CHs)

BPC PCI A Advance ced Es Essential Features

Promote Medicare savings while maintaining high quality care

16

1.

Encourage both high and low cost providers to participate Reward Participants’ improvement over time Adjust for patient case mix that is outside of providers’ control Allow for trends in Clinical Episode spending by hospital peers

2. 3. 4. 5.

ACH Bench chmark P Price ce

17

The Hos

• spital’

l’s B Ben ench chmark P Price ce accounts for three central factors:

• 1. Patient case-mix
• 2. Historic Medicare FFS expenditures during the ACH’s

Baseline Period

• 3. Patterns of spending relative to the ACHs peer group

Patient C Case Mix is Acc ccou

• unted for
• r I

In Mult ltip iple le W Ways

18

Med edicare S e Severity ty - Diagnos

• sis Rel

elated ed G Grou

• up (

(MS-DRG) an and Compreh ehen ensive e - Ambula latory P Proced cedure C Cod

• de

e (C-APC) a ) assignmen ent

• Hospital DRG triggers are stratified by medical severity [e.g.,

with complication or comorbidity (CC) or with major complication or comorbidity (MCC)]

• Outpatient C-APC triggers are designed to group Clinical

Episodes by similar resource use Pati tien ent ch t characteristi tics cs

• Demographic characteristics (e.g., age, gender)
• Long-Term Institutional Status
• Dual Eligibility for Medicare and Medicaid
• Hierarchical Condition Categories, Interactions, and counts
• Recent Resource Use

Hierarch chical Con

• ndition
• n Categor
• ry (

(HCC) Cod

• ding

19

Hier erarch chical C Con

• nditi

tion C Categ egor

• ries (

(HCC): ):

• The CMS-HCC model groups individual diagnoses by similar diagnoses and

illness severity. Individual HCC categories are used to account for clinical conditions in the BPCI Advanced model.

• Co

Code all de all pertine pertinent t HCCs HCCs for conditio

• nditions

ns acti actively ely t treating ting

• Example: An orthopedist need not code for CHF if it is not

actively managed during the clinical episode

• All

All HCC HCC d diagnoses iagnoses recorded ded i in th the e calendar alendar year ear a are included, e included, regardless dless of

• f who
• codes
• des th

them em or

• r whe

here e they they are e coded

• ded
• Example: If another clinician indicates active treatment of CHF

within the same 90 days, it will also apply to risk adjustment for the orthopedic episode Clinician Tips

Bun Bundled ed Cl Clini nical E Episo sodes Co es Compar are e Peer eers o

• n

n the e Ba Basis o s of the T he Type a e and Q Quanti tity o

• f Ser

Services es Provided

20

Te Testing Inpatient D t Days Po Post-acut ute C Care Days Readmissions

Patient

Te Testing Inpatient D t Days Po Post-acut ute C Care Days Readmissions

Hos

• spital A

A: Excellent Outcomes Hos

• spital B

B: Excellent Outcomes Patient

Low Unit Volumes High Unit Volumes

21

• CMS adjustments are re

removed when calculating historical Clinical Episode costs and making comparisons to other ACHs

• Compares the intensity of services

provided, independent of context

• These adjustments are reapplied

ed in the final step of setting ACH benchmarks

• Accounts for context when setting the

final target price

*https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and.-Reports/Medicare- Geographic-Variation/Downloads/Geo_Var_PUF_Technical_Supplementpdf

CMS Standardization Methodology*

22

CM CMS a adjusts payments f for: r:

• Regional labor costs and practice expenses (i.e., hospital wage indexes and

geographic practice cost indexes)

• Graduate Medical Education (GME) and Indirect Medical Education (IME)
• Serving a large population of poor and uninsured [i.e., disproportionate share

payments (DSH)]

Th The C Cos

• st of
• f Provi

viding t g the Sa Same Se Servi vice ce Differs by by Context

A A Picture e of Two Hospitals

Su Suburban Hos

• spital

Urban A Academic M c Med edical Cen enter er ( (AMC) Rent Labor Teaching Proportion of Uninsured

$ $

Rent Labor

$$$ $$$

Disproportionate Share Teaching Costs

$$$ $

Cos

• st Alon
• ne Doe
• es Not
• t R

Reflect ct E Effici ciency cy

23

TOTAL HIP BUNDLE

Average Co Cost = = $25, $25,000 000

Su Suburban H Hosp spital al Ur Urban A AMC Cost Efficiency

$

Cost

$$$

Efficiency

24

• The

e Target t Price b ce ben ench chmarks A ACHs against t peer eer f faci ciliti ties es

• Fact

ctors c con

• nsider

ered i in iden enti tifying ACH p peer eers incl clude: e:

• Bed Size
• Rural / Urban
• Academic Medical Center

Status

• Safety-net Status
• Census Division

Patterns of

• f S

Spending R g Relative t to

• the ACHs

Peer eer G Group up

AMC MC Model definition intends to identify tertiary academic medical centers with major teaching and research roles. Safet ety N Net et Status Designation assigned to ACHs with greater than 60%

• f patients in dual Medicare

– Medicaid status.

25

• The

e Peer eer A Adjusted T Tren end ( (PAT) f ) fact ctor a adjusts ts for

• r p

per ersisten ent t differ eren ences es a acr cross ACH p peer eer g grou

• ups:
• Trends are projected forward from the baseline period
• The PAT offers mutual protection to CMS and Participants against

systematic changes in treatment costs

Peer A Adjusted Trend (PAT) F Fact ctor

• r

Clinician Tip If a all of you

• ur p

peer eers ach chieve m e more e effici cient c t care, o , over er ti time e you

• u’l

’ll b be e hel eld t to th

• that s

t same e standard

• Example: More efficient use of post-acute care in orthopedic

bundles Conversely ely i if all of

• f you
• ur p

peer eers start t using a new tr trea eatm tment th t that t ch changes es c cos

• sts

ts a and ou

• utcom
• mes it

t will adjust t your target p t price ce

• Example: New expensive curative treatment

Ke Key Point: Hospitals can only participate in Clinical Episodes for which they meet the minimum volume requirement

26

• Hos
• spitals m

must t have m e more th than 40 Clinical E Episod

• des

es i in th the e basel eline e per eriod (10 per er yea ear, o

• n aver

erage), e), w which ch:

• Stabilizes Clinical Episode target prices
• Protects ACHs against outlier cases

Minimum Vol

• lume R

Requirements

Clinician Tip

• Success in the model requires infrastructure investments and

practice changes

• At hospitals with low but sufficient volume, participation in

multiple Clinical Episodes improves performance stability and cost-effectiveness of infrastructure investments

Ex Extreme Outlier V Values are T Trimmed t to

• Stabiliz

ilize P Pric icin ing

27

• Indi

dividual Cl Clinical al Ep Episo sodes s will ha have sp spending cap apped a at the 1s 1st an and 99t 99th per ercen centi tile of

• f nati

tion

• nal ep

episode s e spen ending by MS-DR DRG o

• r C

C-APC; c ; called ed risk c cap

• Limits impact of extremely costly clinical episodes
• Stabilizes target prices
• The r

e risk cap is applied ed to C

• Clinical Episod
• des

es in b both

• th th

the e Basel eline e Per eriod and th the e Perfor

• rmance

ce P Period

• d

Target P Price ce D Definition

• n

28

CMS D Discount i t is 3% for Mode del Years 1 & 2

Ta Target Price ce ( (TP) P) Be Bench nchmark rk Price ce ( (BP BP) (1 (1- CM CMS S Di Disc scount) t)

The model h has multiple aims:

• Preserve the trust fund for

current and future generations

• Improve efficiency, quality, and
• utcomes

29

While t the c concept i t is simple, the m math is complex

• Compound lognormal economic model with multiple calculation stages
• Please see the "BPCI Advanced Pricing Methodology Technical Review Webin
• n May 17, 2018 for the math. (Available in the BPCI Advanced website)

ar" held

ACH T Target Price ce C Calcu culation

• n

Bringing th thes ese e fact ctors t tog

• geth

ther er… Hos

• spital

Ben ench chmark P Price ce Historical F FFS Ex Expenditur ures Peer eer E Expen enditu ture e Tr Trend Patient Case M e Mix Hos

• spital

Target P t Price ce Hos

• spital

Ben ench chmark P Price ce (1- CMS D Discou

• unt)

t) …Res esults ts i in th this o

• ver

erall target t price ce approach:

30

TARGET ET PR PRICING M MET ETHODOLOGY PH PHYSICIAN G GROUP PR P PRACTI TICES ( S (PG PGP) P)

PG PGP O P Offset to A

• ACH Target P

Price ce

31

• Physici

cians m may h have d e disti tincti ctive e practi ctice ce profiles les, i , infor

• rmed b

by:

• Care philosophy
• Training / experience
• Context
• Limited feedbac

ack on h how q qual ality y an and c cost profiles les c compare t e to

• peer

eers

• PGP ben

ench chmark p prices ces a are e anch chored ed on

• n th

the e ACH w wher ere ep e episod

• des

es occu

• ccur, b

, but t are a e adjusted ed for

• r ea

each ch PGPs histor

• rical e

exper erience ce

• Adjustment applied for a limited time
• Allows more physicians to participate
• Establishes a pathway for practice

refinement over time

PG PGPs a and A ACHs have different CE E Target P Price ces

KEY KEY PO POINTS

• Limited time PGP adjustment, based on ACH where the

episode is triggered

• PGPs will receive unique target prices for each clinical

episode at each hospital where they practice.

PGP GP Urba ban

ACH: $20,000 PGP: $22,000 ACH: $18,000 PGP: $20,000

Ru Rural

ACH: $25,000 PGP: $27,000

Academ emic M Medical al Ce Center ( (AM AMC)

32

PGP GP R Risk a and nd Peer Stand ndardi dized ed Historical C Cost

33

KEY KEY PO POINTS PGP risk and peer standardized historical costs calculated as a weighted average of clinical episode costs for all of the ACHs at which the PGP initiates clinical episodes.

PGP Hi Histor

• ric

Cos

• st: $23k

$23k

( )

00

Urba ban

PGP: $22,000 PGP: $27,0

AMC

PGP W Wei eighted Aver erage Co e Cost

PGP: $20,000

Ru Rural

Volume = = 12 Volume = = 40 Volume = = 20

Ph Physici cian G Grou

• up P

Pract ctice ce ( (PG PGP) P) O Offset

• PGP of
• ffset

t measures es th the P e PGPs histor

• rical cos
• sts

ts r rel elativ tive e to ea

• each

ch ACH at w t which ch i it t initiates Clinical E Episodes Historical C Cos

• sts

ts Les Less Histor

• rical C

Cos

• sts

ts More H e Historical C Cos

• sts

ts Equivalent t t to ACH than an A ACH than an A ACH 1.0 0.9 1.1 Ex Exam ample P PGP Offse sets

34

KEY KEY PO POINTS

• Offset requires a minimum of 40 Clinical Episodes during the

baseline period

• If baseline volume is insufficient, the ACH Target Price will apply
• If PGP target price is lower than the ACH target price, the PGP

Target Price is increased by half its distance from the ACH

35

MODEL C COST PERFORMANC NCE

Per erformanc nce W e Will be be As Asses esse sed d Sem emi-Annually

• Clinical Episodes will be reconciled based on the Performance

Period in which t the epi e episo sode en ends

• Semi-annual Reconciliation will include two (2) “True-Ups” to

allow for claims run-out

OR

36

Recon

• nci

ciliation

• n P

Proce

• cess

37

All no non-exclude ded M Medicare FFS e expenditures wi will be compared against the final Target Price The r resulting dollar a amount m may be p positive or negative Determined d for each Clinical E Episode Positive e or Neg Negative e Rec econ

• nciliation
• n A

Amou

• unt

Continued o

• n Next S

Slide…

Ex Example: Si Single Ep Episod

• de

No Non-Convener Partici cipant (PG PGP or P or A ACH)

38

Positive or Negative Reconciliation Amount + $ TKA

• $

TKA

Episod

• de I

e Initi tiator ( (PGP/ACH)

OR

Compared to

Actual al Ex Expenditur ures Target P t Price ce

Continued o

• n Next S

Slide…

Recon

• nci

ciliation

• n P

Proce

• cess (

(Con

• ntinued)

39

All Positi tive a and Negati tive Reconciliati tion Amounts will be netted across all C Clinical Ep Episodes attributed to an Episode Initiator r (EI) I) The result t is a TOTAL Reconciliati tion Amount t The TOTAL Reconciliation dollar a amount m may b be Positive o e or Neg Negative e Positive o e or Neg Negative e To Total Reconciliati tion A Amount

Ex Example: M Multiple Ep Episod

• des

No Non-Convener Partici cipant (PG PGP or P or A ACH)

40

Positive or Negative Reconciliation Amount(s)

+ $ CHF HF + $ COPD PD + $ TKA

• $

Sep epsis is

Positive or Negative Reconciliation Amount(s)

+ $ CHF HF + $ COPD PD

• $

TKA

• $

Sep epsis is Episode I Initiator r (PG PGP/ACH) #2 #2 Episode I Initiator r (PG PGP/ACH) #1 #1

Positive Total Reconciliation Amount Negative Total Reconciliation Amount

Continued o

• n Next S

Slide…

Recon

• nci

ciliation

• n P

Proce

• cess (

(Con

• ntinued)

41

Adjusted ed Positive e or Neg Negative e To Total Rec econ

• nciliation A

Amou

• unt

The Positi tive or Negati tive T Total Reconciliati tion Amount for an EI EI is then adjusted based on quality ty p performance, resulti ting in th the Adjusted P Positi tive o

• r Negative Total

Rec econ

• nciliation A

Amou

• unt

The adjustment i is limited to a maximum of 10% in n Model Years s 1 & 1 & 2 2 (i.e., ., 2018 2018 & 2019) 2019) A A stop loss/stop g gain of 20% will a apply t to the Rec econ

• nciliation A

Amou

• unt a

at the E EI l level el

10% 20%

Ex Example: R Recon

• nci

ciliation

• n A

Adjustment No Non-Convener Partici cipant (PG PGP or P or A ACH)

42

Adjusted Positive Total Reconciliation Amount

.95

Episode I Initiator r (PGP/ P/ACH) # #1

Net Payment Reconciliation Amount (NPRA)

+ $ CHF HF + $ CO COPD PD + $ TK TKA

• $

Sep epsis

Episode I Initiator r (PGP/ P/ACH) # #2

Repayment Amount Adjusted Negative Total Reconciliation Amount

.95

+ $ CHF HF + $ CO COPD PD

• $

TK TKA

• $

Sep epsis

Positive or Negative total Reconciliation Amount Adjust for Composite Quality Score NPRA or Repayment C E Positive and Negative Reconciliation Amount

CONVENER PARTICIPANT

$52K $30K Net Payment Reconciliation Amount (NPRA) $22K

Adjusted Positive Total Reconciliation Amount Adjusted Negative Total Reconciliation Amount

+ $ CHF HF + $ CO COPD PD + $ TK TKA

• $

Sep epsis + $ CHF HF + $ CO COPD PD

• $

TK TKA

• $

Sep epsis

Ep Episode I Initiator ( (PGP/ACH) #1 #1 Ep Episode I Initiator ( (PGP/ACH) #2 #2

Positive or Negative Total Reconciliation Amount Adjust for Composite Quality Score NPRA or repayment amount Positive or Negative Reconciliation Amount(s)

43

Ex Example: C Con

• nvener Partici

cipant (Multiple PG PGPs or

• r A

ACHs)

44

SUMMARY RY

Summa mmary

• BPCI Advanced is a new voluntary Advanced APM

and MIPS APM (beginning in 2019)

• Establishes responsibility for Clinical Episodes
• Successful Participants (quality, cost) may receive

additional payments in the form of NPRA

• This simplified presentation of the target pricing

methodology highlights core concepts in BPCI Advanced for clinicians and administrators.

45

Addition

• nal R

Resou

• urce

ces - Webs bsite

Docu

• cument
• BPCI Advanced Target Price Specifications –

Model Years 1 & 2 Webinar

• “Pricing Methodology for Model Years 1 & 2 –

Technical Review” More r e res esou

• urces

ces r rel elated t to

• th

the e BPCI A Advance ced M Mod

• del

el are a e also

• available a

at t th the e web ebsite: e:

46

https://innovation.cms.gov/initiatives/bpci-advanced

47