Evolving Business Models: Preparing for Value-Based Payments EvidenceNOW Southwest/Colorado SIM Collaborative Learning Session May 6, 2016 Aurora, Colorado Presented by: Pamela Ballou-Nelson, RN, MSPH, PhD, PCMH CCE Senior Consultant, MGMA Health Care Consulting Group Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

Objectives At the end of this session, you should be able to: Examine your theoretical framework: view your practice through a new lens Ask what am I doing with my population: population health management is here to stay Understand the CMS terms of payment reform Discuss the key components of value-based practice models Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 3

Theoretical Framework Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 4

Imperative for Change Just because you need to change doesn’t mean you will change, even if you want to change Understand your theoretical frameworks in place today See healthcare, patients, through a “different lens” Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 5

Thank you for your cartoon request and payment of $40 Thank you for your cartoon request and payment of $40.00 authorizing one time permission to use 2 cartoons in a presentation, specifically as requested. The cartoon may also be used in handouts, providing the material is the printed version of your original PowerPoint slide. No additional or subsequent usage of any kind is authorized by this transaction.   Please print and save this e-mail and receipt as record of your payment and authorization. It contains all the details of your transaction Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 6

Here to stay — value-based model of care population health Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

Collaboration Working together is success Keeping together is progress Coming together is a beginning Keeping together is progress Working together is success - Henry Ford Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 8

Population Health is an Outcome Population health is defined as the health outcomes of a group of individuals, including the distribution of such outcomes within the group. These groups are often geographic populations such as nations or communities, but can also be other groups such as insurance attributions, employees, ethnic groups, disabled persons, prisoners, or any other defined group. Kindig, DA, Stoddart G. (2003). What is population health? American Journal of Public Health, 93, 366-369. Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

Managing Services for a Population Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 10

Population Selection How will you know which segments to choose? Large gaps in health outcomes Size of population Organization or community alignment with the work Resources available for this work Can you build a sustainable financial model for this population Adequate return on investment Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 11

Getting to Know Populations It is not enough to choose populations. You need to understand the needs and assets of the population you have chosen. As you get to understand your population, better projects will naturally arise from a better understanding. Attribution is key and often challenging Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

Here to stay — Payment reform Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

Payment Models Will Demand New Care Models Used with permission from Deloitte Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 14

Payment Reform Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 15

Commercial Plans Included 75% of business in value-based payment arrangements by 2020 – Health Transformation Alliance United will double value-based contracts by 2018 — this includes self-funded plans Humana anticipates half of its Medicare Advantage membership will be enrolled in full-risk-bearing accountable care organizations by 2017 Aetna currently has 22% of spend running through contracts with a value-based component Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 16

What is Value? Outcomes + Patient Experience Since value is defined as outcomes relative to costs, it encompasses efficiency. Cost reduction without regard to the outcomes achieved is dangerous and self-defeating, leading to false “savings” and potentially limiting effective care. Outcomes + Patient Experience (safety, patient satisfaction outcome metrics) Value = _____________________ Cost Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

How Do We Get There? From FFS to performance-based payment New measures — quality and cost New shared data infrastructure New incentives Transparency Alignment across payers New care models New community partners New relationships Clinical tied with business No silos Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 18

Value-based practice models Key components of Value-based practice models Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.

A wise lumberjack once said that if he were given five minutes to chop down a tree or lose his life if he failed to do so, he’d spend three minutes sharpening his axe. Take your time to prepare, sharpen your skills evaluate. Conduct an assessment of your practice Don’t panic BUT prepare Don’t follow the herd; unless it is your herd. Before a health system starts that journey from volume to value, it must plan the transition, especially considering that the provider will have to run its business for a time with a mixed payment model, “That’s why you need a road map,”. “You can’t just feel your way into it.” Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 20

Volume to Value OLD SUCCESS – Volume NEW SUCCESS – Value High volume High compensation High independence NEW SUCCESS – Value Outcomes to value (volume) Modified compensation plans Partnerships/teamwork Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 21

Value Transformation Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 22

Practice Assessment Examine your theoretical frameworks Educate internally Understand your contracts/risk Manage total cost of care Improve operational efficiency New budget models Create community and health system partnership The focus of VBM should not be on methodology. It should be on the why and how of changing your corporate culture. A value-based manager sees the difference from 1960s-style planning systems. It focuses on better decision making at all levels in an organization. It recognizes that top-down command-and-control structures cannot work well Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 23

Practice Assessment 8. Optimize provider network, manage care transitions, and expand disease management to full attributable population 9. Invest in interventions in the high-acuity, post-acute population 10. Develop care pathways for consistency, continuity and effectiveness 11. Automated process to address prevention and wellness 12. Coding and documentation effectiveness: maximize ICD-10, continue on path to clinical documentation (care management codes) Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 24

Value and Uses of TCOC Data Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 25

Work Flow Redesign – Traditional Method Courtesy of Bon Secours health system in Richmond Virginia Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 26

Care Team: New Workflow Redesign Delivery System: The Care Team Division of Labor: Use every member of team to highest level of training/licensure/ability Move all possible interventions away from the physical visit – Pre and post-visit encounter Everything comes to the patient Use of nursing-driven protocols Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 27

CMS – MACRA – MIPS – APM – VM Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 28

MACRA The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is a bipartisan legislation signed into law on April 16, 2015. What does MACRA do? Repeals the Sustainable Growth Rate (SGR) formula Changes the way that Medicare rewards clinicians for value over volume Streamlines multiple quality programs under the new Merit-based Incentive Payment System (MIPS) Provides bonus payments for participation in eligible alternative payment models (APMs) Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 29

MIPS = Merit-Based Incentive Payment System Streamlines multiple quality programs under the new Merit-Based Incentive Payments System (MIPS) Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 30

MIPS A single MIPS composite performance score will factor in performance in four weighted performance categories: Direct form CMS 30 points 30 points 15 points 25 points Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 31

Exceptions to MIPS Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 32

APM = Alternative Payment Models All we are going to say as this is still under development will have more information this fall Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 33

CMS Value Modifier Currently being calculated 34 Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 34

Methodology 2018 Payment Adjustments Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 35

Methodology 2018 Payment Adjustments Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 36

How to Prepare My Practice for VBPM Understand how your practice will be affected Participate in PQRS. Participation is required, as the VBPM relies on PQRS measures reported by physicians for quality performance analysis. This also means that those providers who are impacted by the VBPM and do not participate as required in PQRS will see a double penalty — one reduction for non-PQRS participation as well as an additional reduction under the VBPM for not participating in quality reporting. PQRS and the VBPM are inter-related, but distinct programs and criteria must be satisfied in each separate program. Access your practice’s QRUR. Authorized representatives of groups can access their QRURs using valid Enterprise Identity Management System (EIDM) log-in credentials to the CMS Enterprise Portal. Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 37

“Success in life is based more on what others can do for you than on what you can do for yourself.” — Al Ries Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved. 38

questions discussion Copyright 2016. Medical Group Management Association® (MGMA®) . All rights reserved.