PHYSICIAN ENGAGEMENT IN A VALUE-BASED REIMBURSEMENT ENVIRONMENT - - PDF document

4/24/2017 1

PHYSICIAN ENGAGEMENT IN A VALUE-BASED REIMBURSEMENT ENVIRONMENT THROUGH COMPENSATION DESIGN

David Stein, M.D. President Strategic Medical Consultants Zach Remmich Managing Consultant zremmich@bkd.com April 25, 2017

4/24/2017 2

• Participate in entire webinar
• Answer polls when they are provided
• If you are viewing this webinar in a group
• Complete group attendance form with
• Title & date of live webinar
• Your company name
• Your printed name, signature & email address
• All group attendance sheets must be submitted to training@bkd.com within 24 hours of live

webinar

• Answer polls when they are provided
• If all eligibility requirements are met, each participant will be emailed their CPE

certificates within 15 business days of live webinar

TO RECEIVE CPE CREDIT

• Brief Recap of Value-Based Reimbursement
• Brief Recap of MACRA
• Aligning Quality & Cost Goals to Physician Compensation
• MACRA Application
• Compensation Change Management Process Overview

AGENDA

4/24/2017 3

CMS SHIFT PAYMENT AWAY FROM FEE-FOR-SERVICE

85% 85% 30% %06 50%

All Medicare FFS All Medicare FFS All Medicare FFS (categories 1–4) FFS linked to quality (categories 2–4) Alternative payment models (categories 3–4) 2016 2018

Source: www.cms.gov “Better Care. Smarter Spending. Healthier People. Paying Providers for Value, Not Volume.”

FFS

(Historical)

Pay-for-“Value”

(MACRA)

HOW WILL YOU BE REIMBURSED?

Savings earned

APMs

(CPC+)

Population Health

(Single payor models) CMF & quality FFS Payment adjustment FFS Incentivizes volume FFS Keep cost low Increase volume to maximize revenue Savings earned PMPM

FFS

Cost to implement & maintain Cost to implement & maintain Cost to implement & report quality

Revenue Additional Costs

CMS wants 50% of payments to come through these mechanisms by 2018

Illustrative Examples Only

4/24/2017 4

KEY TAKEAWAYS

• Move away from transactional fee-for-service & shift toward

quality & cost management of beneficiaries

KEY TAKEAWAYS

4/24/2017 5

• Emphasis on data analytics, provider

documentation & patient panel management

• Care coordination & population health

management more the focus

KEY TAKEAWAYS

• Commercial carriers rapidly

following in the footsteps of CMS

• Publication of outcomes data

proliferating – increased financial responsibility by patients for their care

KEY TAKEAWAYS

4/24/2017 6

• Internal dynamics vary drastically across practice sizes
• Understanding expertise & capabilities to manage VB

aspects within the practice is for key long-term planning & success

ENGAGEMENT OF SMALL & LARGE GROUPS UNDER VB REIMBURSEMENT Brief Recap of MACRA

4/24/2017 7

• Eliminate sustainable growth rate (“doc fix”)
• Creates two new physician payment models
• MIPS – fee-for-service tied to performance –

Medicare Part B payments (“pick your pace” for year one)

• APMs – payment models that reward providers

for cost & outcomes

• Consolidates financial impacts of current

reporting programs (PQRS, VBPM & MU)

• Emphasis on performance vs. pay-for-

reporting

• Program incentives intend to steer physician

participation in APMs

MACRA AT A GLANCE

CMS Quality Payment Program

Advanced Alternative Payment Models (APMs) Merit-Based Incentive Payment System (MIPS)

Report some data & avoid negative payment adjustment

“Test” Reporting

Report partial year & earn small payment adjustment Report full year & earn max adjustment & potential bonus

“Partial” Reporting “Full” Reporting

GENERAL MIPS OVERVIEW

• Replaces PQRS
• 200 measures –

specialty emphasis

• Bonus points

available

• Replaces VBPM cost

component

• Included in 2018

performance year

• Based on claims data
• 10 disease groups
• Refining attribution

methodology

• Replaces MU
• Moves away from

“all or nothing”

• Certain exemptions
• Can report as a

group

• New category
• >90 activities to

choose from

• 90 consecutive days
• Preferential scoring

Composite Performance Score (CPS) Year Quality Cost Advancing Care Information Improvement Activities

2017 60% 0% 25% 15% 2018 50% 10% 25% 15% 2019 + 30% 30% 25% 15%

4/24/2017 8

Advanced APM qualifications

• Require participants to use certified EHR technology
• Base payments for services on quality measures comparable to those in

MIPS

• Require participants to bear more than nominal financial risk for losses
• 8% of estimated average total Medicare Parts A & B revenues of participating APM

entities must be at risk; OR

• Maximum loss must be 3% of expected expenditures for which APM Entity is

responsible under APM

GENERAL APM OVERVIEW

Qualifying participant requirements

• Eligible clinicians (EP) must meet payment or patient thresholds to be

considered a qualifying participant (QP)

• EPs must be included on a participation list on one of three days –

March 31, June 30 or August 31

GENERAL APM OVERVIEW

4/24/2017 9

Max MPFS Base Rate Adj

2017 2018 2019 2020 2021 2022 + 0.5% Update 0.0% Update APM 5% Annual Bonus 2026+ APM: 0.75% MIPS: 0.25%

• 4.0%
• 5.0%
• 7.0%
• 9.0%

REIMBURSEMENT IMPLICATIONS – WHAT’S AT RISK

12% 15% 21% 27%

Fee Schedule Update

Budget Neutral Scaling Factor 3x

Aligning Quality & Cost Goals to Physician Compensation

Models: Employment, Gainsharing or Purely Collaborative

4/24/2017 10

COMPOSITION OF PHYSICIAN COMPENSATION PLANS

Included 53% Not Included 47%

QUALITY INCLUDED IN COMPENSATION PLAN FOR EMPLOYED PHYSICIANS

Do Not Anticipate Modifications 66% Anticipate Modifications 34%

ANTICIPATE MODIFYING BALANCE BETWEEN PRODUCTIVITY-BASED & QUALITY-BASED PAY

Source: Sullivan, Cotter & Associates, Inc. (2016). Physician Compensation & Productivity Survey Report

• Builds trust in the process & data
• Transparency & education around the data is essential
• Seek input on metrics relevant to their clinical practices that

align with VB reporting programs

ENGAGING PHYSICIANS EARLY ON IN THE PROCESS

4/24/2017 11

• Start small – try not to tackle your entire quality program within incentive

compensation metrics

• Allow for flexibility – you should include a combination of process &
• utcome metrics
• Reward progress – this will show that the organization values the provider’s

effort

• Involve physicians – physician involvement is critical
• Promote communication & teamwork – goal is fostering collaboration

SELECTING VALUE-BASED METRICS FOR COMPENSATION DESIGN

QUALITY METRICS – NOT ONE-SIZE-FITS-ALL

• Quality metrics don’t always fit well for all provider types, so it is necessary to

identify what will & will not work best for each provider group

PCPs Specialists – Ortho Quality Metrics

• Cancer screening
• Controlling high blood pressure
• Depression readmission
• Identification of Implanted

Prosthesis in Operative Report

• Cardiovascular risk evaluation,

e.g., total knee replacement patients Cost/Operations Metrics

• Panel size
• Chronic disease management
• Beneficiary direct costs
• Implant costs
• Transition of care protocols
• Discharge disposition (home,

home health, SNF)

4/24/2017 12

Process Metric Outcome

REWARDING PROCESS & OUTCOMES

THA Pathway Developed & Approved Percentage of Incentive Compensation Earned

Pathway not developed/approved 0% > 8 months < 12 months 25% > 7 months < 8 months 50% > 6 months < 7 months 75% < 6 months 100%

Compliance with THA Pathway (% of Cases) Percentage of Incentive Compensation Earned

> 80% but less than 85% 25% > 85% but less than 90% 50% > 90% but less than 95% 75% > 95% 100%

Operational Metric Example

WHAT DO THESE PLANS LOOK LIKE – EXAMPLES

Element of Comp Plan Current Composition Future Composition

Productivity 4,928* wRVUs Panel of 2,500 patients Compensation Rate $45.00 per wRVU N/A Productivity-Based Compensation $221,760 N/A Guaranteed Salary $0 $155,456 Incentive-Based Compensation $8,696 $60,000 Service Quality $3,696 $10,000 Clinical Quality $5,000 $50,000 PPPM Management Fee N/A $6 PMPY (6 x 2500) = 15,000 Total Compensation* $230,456 $230,456

*Based on 2016 MGMA median for family medicine (without OB)

4/24/2017 13

• Aligning physicians with your
• rganization can seem like a daunting

task, but there are a number of strategies you can use to enhance engagement around quality & cost

• Start with a manageable program &

allow for flexibility along the way. Your plan should allow for change & updates as you identify areas of success & failures

KEY TAKEAWAYS

4/24/2017 14

• Approach the metric selection process strategically. Identify what aligns with
• rganizational objectives & makes sense for you providers (PCP vs. specialty)

KEY TAKEAWAYS

• Identify what metrics are used

under value-based reimbursement programs & select metrics that align with what is being used to assess reimbursement

• Select metrics from a variety of

categories to allow for a more robust performance analysis

KEY TAKEAWAYS

4/24/2017 15

MACRA Application MACRA: STARTING POINT FOR GOAL SETTING

“PAY-FOR-REPORTING” TO “PAY-FOR-PERFORMANCE”

Quality Cost ACI IA Composite Performance Score Decile 1 Decile 2 Decile 3 Decile 4 Decile 5* Decile 6 Decile 7 Decile 8 Decile 9 Decile 10 Exceptional Performers Payment Adjustment

• Participation & compliance of

value-based reporting is no longer the threshold for positive reimbursement

• MACRA is a move away from

pay-for-reporting & a move toward pay-for-performance Peer Performance Physician MIPS Score MIPS score is a source of benchmarking to inform performance goals in compensation plans

*Hypothetical median

4/24/2017 16

Program Participation

• Hospital’s billing for physician services

under contractual relationship are at MIPS payment reduction risk

• Current components don’t necessarily

align with MACRA categories

• Long-term goal is to align

compensation elements to what is driving reimbursement

• Organizations need to work toward

aligning compensation to MIPS categories to reduce the risk of payment reduction

ALIGNING PHYSICIAN COMPENSATION WITH MACRA

Current Comp Elements MIPS Categories

Patient Satisfaction

Service Quality IA ACI Cost Quality

• New abilities become more important to profitability as VB reimbursement

percent of business grows

• Diagnosis coding (HCC code effect)
• Management of episode claim costs across all providers
• Management of quality & outcome measures
• What are organizations doing to develop & implement the above abilities?
• Case management, to control episode costs for high-expense patients
• Clinical protocol development, to control episode costs
• Correct coding initiatives such as AWV process, to properly reflect HCC Scores

HOW ARE CLINICIANS BEING AFFECTED?

4/24/2017 17

• Begin by analyzing your provider’s

Quality & Resource Use Reports (QRURs)

• Use your QRURs to understand

your organization’s cost & quality

• Cost, quality & risk adjustment are

all important factors in reimbursement & will be of increasing importance in future years

HOW TO GET PROVIDERS FAMILIAR WITH THE DATA Compensation Change Process

4/24/2017 18

• Engage stakeholders – establish a physician compensation committee &

identify a physician champion

• Conduct interviews – connect with physicians & identify what is important &

what is realistic

• Get data buy-in – leverage data & analytics to explain administrative claims as

well as each physician’s quality data & be able to verify accuracy

• Performance management – develop a process to get data reports in front of

physicians on a regular basis (develop a reporting & feedback loop)

• Education – work with physicians to provide information about value-based

reimbursement & how their revenue source will change

INVOLVING PHYSICIANS IN PRECOMPENSATION DESIGN

Benchmark current provider quality, production & compensation Introduce new plan design concepts Document & share the process to be followed Solicit individualized feedback Conduct scenario analysis & present analysis results to physicians Select key leaders & technical expert to finalize open details & identify gaps in areas critical to success Implement new compensation plan

COMPENSATION DESIGN PROCESS

4/24/2017 19

• Existing revenue stream is going at

risk under MACRA & will continue (more & more at risk). Engaging with physicians is the only way to manage risk & maximize reimbursement

KEY TAKEAWAYS

4/24/2017 20

• Physician engagement through

compensation plan design is one

• f many tools to use. Updating

existing models is an immediate pathway for comp plan models with a quality component

KEY TAKEAWAYS

• Updating the quality component of a compensation plan to

maximize reimbursement can be accomplished through a process that balances the needs of the physician with the pending reimbursement protocols (such as MACRA)

KEY TAKEAWAYS

4/24/2017 21

• By using formal processes & vetted

data, trust can be built around a process for routinely updating quality component of compensation to keep up with changes to payor reimbursement patterns

KEY TAKEAWAYS

4/24/2017 22

The information contained in these slides is presented by professionals for your information only & is not to be considered as legal advice. Applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor or legal counsel before acting on any matters covered. BKD, LLP is registered with the National Association of State Boards

• f Accountancy (NASBA) as a sponsor of continuing professional

education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org

• CPE credit may be awarded upon verification of participant

attendance

• For questions, concerns or comments regarding CPE credit,

please email the BKD Learning & Development Department at training@bkd.com

CPE CREDIT

4/24/2017 23

Zach Remmich | 317.383.4000 | zremmich@bkd.com