New Jersey Delivery System Reform Incentive Program Blazing Trails - - PowerPoint PPT Presentation

New Jersey Delivery System Reform Incentive Program “Blazing Trails in Health Reform”

July 30, 2015 HFMA Summer Education Session

NJ’s Pathway to DSRIP

“Do not go where the path may lead, go instead where there is no path and leave a trail”

• Since 2010, eight States have negotiated with CMS to implement a healthcare Delivery

System Reform program target to the low income patient

• Approved under the Medicaid 1115 Waiver, the DSRIP program incentivizes providers to

transform traditional health care delivery systems from high cost/ high utilization programs to achieve lower cost, better quality, better care

• NJ Low Income population is approximately 1.4 million – New Jersey Hospitals care for

approximately ½ of this population annually

1 2 3 4 5 6 7 8 P P P

NJ Low Income Funding Sources Hospital Relief Special Fund

From an Inpatient Subsidy …

Charity, 72% GME, 10% HRSF--> DSRIP, 18%

• Enacted in 2003 to help support NJ

hospitals providing a disproportion share

• f inpatient services to low income

patients with Behavioral Health, Substance Abuse, HIV, and High Risk Pregnancy

• Distribution Formula based on Inpatient

care volume and percentage of charity/ Medicaid FFS patients

• No Performance Risk

• To minimize the impact of Federal Upper Payment Limit (UPL) dollars

lost due the conversion of Medicaid FFS to Medicaid HMO, NJ reorganized it’s Hospital Special Relief dollars ($166.6 M) to meet the requirements for the Medicaid 1115 Waiver program

• DSRIP is the result of CMS granting NJ a five-year demonstration to

continue to draw down the $83.3 M in federal matching dollars.

• NJ Low Income population is approximately 1.4 million – Through the

DSRIP program, New Jersey Hospitals have the opportunity to improve the care for approximately ½ of this population annually.

….To Delivery Reform

“It is not the mountain we conquer but ourselves”

The New Jersey Difference

Demonstration Year Total DSRIP Funding Providers Eligible Participat ing Providers California 2010-2015 $6.7 B NEW All Public Hospitals 21 Massachusetts 2012-2014 Extended to 2017 $628 M initial - NEW $690 M phase2 Designated Safety Net Hospitals 7 Texas 2010-2016 $11.4 B – NEW and repurposed funding Public & Private Hospitals and certain other providers 300+

New Jersey 2014-2017 $166 M – Repurposed Funding All Acute Care Hospitals 54

New York 2015-2019 $6.4 B – NEW Large Public Hospitals and certain safety net providers TBD Kansas 2015-2017 $ 60 M – Repurposed Funding Designated large public teaching or boarder city children’s hospitals 2

Participation in NJ DSRIP programs are required in order for hospitals retain its low income subsidy funds

NJ DSRIP

• The program is open to all NJ hospitals
• Historical HSRF hospital subsidy amounts were held less 20% in
• rder to develop an incentive pool for non-HSRF hospitals
• Subsidy funds range from $14 M to $250,000 per hospital
• Regardless of funding amount, DSRIP program requirements the

same for all hospitals

DSRIP DY3: 25% dollars at risk DSRIP DY4 & 5: 50% dollars at risk DSRIP DY1 & 2: Develop Infrastructure HRSF: Funding Fixed Annually

NJ DSRIP Goals and Program Options

Improve Care/Case Management Improve Discharge Planning Expansion of Primary Care Improve Quality of Care Improve Access to Care Improve Patient Education Improve Delivery of Care Improve Training and Efficiency

Achieved through improved management of chronic diseases

Asthma Behavioral Health Cardiac Care Chemical Addiction/Substance

Abuse

Diabetes HIV/AIDS Pneumonia Obesity

3

NJ DSRIP Program Structure

“I see my path, but I don’t know where it leads…”

• Infrastructure Development
• Completion of application and procurement of

project

Stage 1

• Development of chronic medical condition redesign

and infrastructure

• Piloting and testing of chronic patient care models

Stage 2

Fund Payment: DY3: 75% DY4: 50% DY5: 25%

• Quality Improvement Reporting for Hospital-

Specific DSRIP Chronic Disease Management Project

Stage 3

Fund Payment: DY3: 15% DY4: 35% DY5: 50%

• Population Focused Quality Improvement

Reporting

• Collection and reporting of 45 “universal” metrics

from every hospital. (CMS removed 12 – April 29th)

Stage 4

Fund Payment: DY3: 10% DY4: 15% DY5: 25%

NJ DSRIP Measures & Pay For Performance

Subsidy Earned based on three types of measures

• P4R: Data collection and reporting

measure results

• P4P: Performance Measure – Uses a

“reduction in gap” methodology where payment is earned by documenting an annual reduction of 10% or greater

• UPP: Universal Performance Pool –

Measures eligible for incentive dollars where performance above benchmark

• Incentive pool dollars are determined based
• n initial incentive pool ‘carve out”, non

participating hospitals, and undistributed dollars due to underperformance

MMIS Claims Based, 65% EMR/ Chart Based Measures, 35%

Measurement Sources

DSRIP Documentation of Economic Value

In addition to clinical and operational compliance, DSRIP participants must also develop a budget for the project selected and report actual program investment. Per the DOH guidance: DSRIP budgets have the following importance to the project: 1. The budget represents a commitment to the project as funding is essential to carrying out the project objective and

• utcome achievement. A low budget can be synonymous

with low project funding and may be an indication of under committing to the project. 2. The budget becomes part of the financial plan for the project and should include two component parts: a. The hospital investment in the DSRIP project b. Documentation of Economic Value

DSRIP Documentation of Project Investment

The DY4 budget requirement is an annual budget equal to or greater than 80% of the hospital DY4 adjusted funding target.

• Staff Salaries and Benefits (FT/PT or allocated)
• Physician
• Supplies
• Consultants

Direct / Allocated Expenses

• Allocated Overhead
• Depreciation and Bad Debt
• Plant Operations

Indirect

• Equipment
• Facility
• Working Capital

Capital Expenditures

• Data collection and analytics
• DSRIP Meetings (Learning Collaborative)

Other Expenses

DSRIP Documentation of Economic Value

The budgeted economic value of the project measures the economic impact the DSRIP project is expected to have on the overall project population served by the DSRIP project.

In total best practice budgets include economic value of 30%-50%

• f the adjusted DY4 funding target.

Program Economic Value

Cost Avoidance Reduction in Utilization Hospital/ Payer Cost Savings

Shorter LOS Reduced Emergency Room Reduced Admissions/ Readmissions Care Process Improvements Extrapolation to General Population Revenue Reductions

DSRIP Economic Value Calculation Examples

• If the expected admission rate reduction is 10% per year on a base of 750 admissions

a reduction of 75 admissions per year is expected. If the value of those admissions priced at Medicaid payment rates is $8,600 per admission, the expected economic value is imputed at $645,000 [75 x $8,600].

• For the above example, the marginal cost savings associated with the reduction in

admissions would be includable in the budget. If the cost per admission were $8,500 and the marginal expense ratio is 40% then the marginal expense savings per admission would be calculated at $3,440, and a total cost savings of $258,000.

• For those cased admitted, if average length of stay is reduced by .5 days on a patient

population of 675 patients there would be a reduction of 337.5 patient days. If the average Medicaid payment per patient day is $1,400, then the imputed economic value associated with the reduced average length of stay is $472,500. [337.5 x $1,400].

• Extrapolation of population improvement on a targeted population.
• Research data shows a population of diabetes patients not managed incurs average

health care costs of $10,500 per year compared to a managed patient population incurs average costs of $8,700, a savings of $1,800 per year. These savings may include costs not incurred by a hospital, for example pharmaceutical costs. A DSRIP target population of 500 patients would produce imputed cost savings of $900,000 annually to the overall health care system of providers.

• St. Joseph’s Regional Medical Center

DSRIP Program

• Historical HSRF Subsidy was $10.6 M
• 2nd largest provider of Charity Care / Medicaid services in the

State

• 3rd poorest city in the State
• With approximately 69,000 or 12% of the low income

population attributed to it, St. Joseph’s is one of the largest programs in the state

• St. Joseph’s Regional Medical Center

DSRIP Program

Stage 1: Program Selection and Infrastructure Development

Hospital-Based Educators Teach Optimal Asthma Care

New or Substantially New Program Asthma Management was not a formalized program within the hospital, some development on Pediatric Pathways Organization had internal expertise and physician champions willing to lead program implementation Opportunity to formalize program and expand to Adult population Able to Achieve Quality Improvements Internal Data Analytics of Low Income Population showed: Admission / Readmission / Emergency Room Utilization rates very high due to poor patient compliance on medication usage, symptom management and post episode follow up Able to Achieve 50% ROI

• n Program Subsidy

With a significant Asthma patient population, dedication of organizational resources and saving appeared to be obtainable

• St. Joseph’s Regional Medical Center

DSRIP Program Stage 2: Program Development

SJRMC Asthma Program

Expanded Program to Adult Population Addressed key lessons: Medication Access Emergency Use Navigator Follow Up Protocol Pediatric Pilot: Developed Standardized Pathways for all Patients Developed Communication Tools Educated Asthma Educators, Care Managers and Other Key Staff Developed Community Outreach Programs

• St. Joseph’s Regional Medical Center

DSRIP Program Stage 2: Pathways and Tools

• St. Joseph’s Regional Medical Center

DSRIP Program Stage 2: Trained Staff

• Developed career ladders for staff

accomplishments

Certified Asthma Educators (AE-C)  4 Respiratory Therapists  1 Registered Nurse  1 Advance Nurse Practitioner  2 Pharmacists Asthma Staff Education Classes  3 hour classes  Approximately 283 staff employees Outreach Programs  Asthma Educators held 7 outreach program in our community  About 550 adults and children were educated about asthma self-management.

• St. Joseph’s Regional Medical Center

DSRIP Program Stage 2: Community Programs

Smoking Cessation Program School Nurse Education Program

• St. Joseph’s Regional Medical Center

DSRIP Program Stage 3 and 4: Performance Reporting

• Performance Report was a full organizational effort

DSRIP

EMR Team Chart Extraction Team

• St. Joseph’s Regional Medical Center

DSRIP Challenges and Learning Collaborative

• St. Joseph’s has partnered with other NJ Hospitals and organizations to

identify strategies and tactics that work in other communities to address collaborative address these challenges such as:

• Fiscal reality of developing an outpatient programs with no new financial

funding while maintaining existing program (HRSF) services and infrastructure for complex low income patients

• Limited community primary care access
• Medication Adherence – medication affordability
• Low Income socio- economic issues – Home/Community Environment, drug

use, education levels, home conditions, nutrition

• Use of Outpatient Electronic Medical Record which is still in early adoption

phase “Somewhere between the bottom of the climb and the summit is the answer to the mystery why we climb”

• St. Joseph’s Regional Medical Center

DSRIP Budget to Actual Tracking

• Direct Expenses
• Tracked using NJHA CBISA tool to track all partial and allocated

expense (for example meeting times and expenses)

• General Ledger accounts and costs set up to track staff time, supplies

and direct costs

• Indirect expenses are calculated by the Finance Department using

CMS Cost Report /step down methodology

• Economic Value is calculated by Decision Support
• Calculates the value of reductions in inpatient days, diagnostic tests,

medication changes, level of care (ICU to M/S)

• Calculates the revenue reductions due to avoided admissions and ER

encounters

• Due to the newly released thresholds, SJRMC will begin looking at

Stage 4 UPP savings (none project specific savings) and population impact

NJ DSRIP NEXT STEPS

• DSRIP 2
• DSRIP pilot ends 2017
• CMS and State of NJ want to further expand concept of

value based purchasing for low income patients

• Nationally programs renewed have had a greater

emphasis on performance

• New Jersey program design … just starting