1. Todd Baker, Chief Executive Officer
Payment Reform
Presented By:
Todd Baker, Chief Executive Officer
Southwest Ohio Healthcare
Financial Management Association
May 11, 2017
(Disclaimer: Some of the slides and graphics have been provided to OSMA by CMS.gov)
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2. Overview General Overview of Medical Practice Financing
Payment Reform Overview
Ohio
Federal
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3. Health Financing Bringing physicians together for a healthier Ohio 3
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4. Major Issues Change from fee-for-service to value
Practices will be taking on financial risk
Impact on cash-flow (loan needs)
Opportunities to finance risk
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5. Payment Reform Update - Ohio
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6. 5-Year Goal for Payment Innovation
Patient-Centered Medical Homes
Episode-Based Payments
Goal
80-90 percent of Ohio’s population in some value-based payment model (combination of episodes- and population-based payment) within five years
Year 1
In 2014, focus on Comprehensive Primary Care Initiative (CPCi)
Payers agree to participate in design for elements where standardization and/or alignment is critical
Multi-payer group begins enrollment strategy for one additional market
Year 3
Year 5
State leads design of five episodes: asthma acute exacerbation, perinatal, COPD exacerbation, PCI, and joint replacement
Payers agree to participate in design process, launch reporting on at least 3 of 5 episodes in 2014 and tie to payment within year
Model rolled out to all major markets
50% of patients are enrolled
20 episodes defined and launched across payers
Scale achieved state-wide
80% of patients are enrolled
50+ episodes defined and launched across payers
State’s Role
Shift rapidly to PCMH and episode model in Medicaid fee-for-service
Require Medicaid MCO partners to participate and implement
Incorporate into contracts of MCOs for state employee benefit program
Overall, the 5-year focus at the state level is on PCMH and episodes.
For immediate term, the focus is on CPCI for PCMH and development of 5 episode models (with the goal to launch reports in November 2014).
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19. Ohio Comprehensive Care Initiative
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20. Episodes of Care Bringing physicians together for a healthier Ohio 20
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21. Retrospective Episode Model Mechanics
Patients seek care and select providers as they do today
Providers submit claims as they do today
Payers reimburse for all services as they do today 1 2 3
Patients and providers continue to deliver care as they do today
Providers may:
Share savings: if average costs below commendable levels and quality targets are met
Pay part of excess cost: if average costs are above acceptable level
See no change in pay: if average costs are between commendable and acceptable levels
Review claims from the performance period to identify a ‘Principal Accountable Provider’ (PAP) for each episode 4 5 6
Calculate incentive payments based
on outcomes
after close of
12 month performance
period
Payers calculate average cost per episode for each PAP1
Compare average costs to predetermined ‘’commendable’ and ‘acceptable’ levels2
Ohio episode model is RETROSPECTIVE, not prospective.
To repeat, there is not pre-set price for a bundle in the retrospective model.
Patients seek care and providers bill and are reimbursed as they do today.
After the fact, claims data is analyzed to:
- identify the principal accountable provider, or PAP, who is held accountable for all episode costs, not just those he/she directly bills for
- calculate the average episode code per PAP and compare to set “commendable” and “acceptable” thresholds to determine any gain or risk sharing
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22. Retrospective Thresholds Reward Cost Efficient,
High-Quality Care 7
Provider cost distribution (average episode cost per provider)
Eligible for gain sharing based on
cost, didn’t pass quality metrics
Gain sharing
No change
Risk sharing
Ave. cost per
Episode $ -
Risk sharing
Pay portion of excess costs
No change in payment to providers +
Gain sharing
Eligible for incentive payment
Acceptable
ILLUSTRATIVE
Commendable
ILLUSTRATIVE
Gain sharing limit
here is 1 bar for each principal accountable provider. The height of the bar represents that PAP’s average episode cost across all their episodes in a given time frame, after adjustments have been applied (i.e., risk adjustment, outlier and other exclusions).
The bars are ordered from left to right, from the PAP with the highest average episode cost to the PAP with the lowest average episode cost.
If a PAP’s average cost is above a pre-set “acceptable” threshold (those in red, on the left), they may be at risk and pay back some of the cost to the payer.
If a PAP’s average cost is below a pre-set “commendable” threshold (those in green, on the right), they may share in the savings.
However, if these low-cost PAPs have an average episode cost below a gain-sharing limit, their savings will be capped, to reduce the incentive to limit care.
In addition, PAPs must also achieve certain clinical quality metrics (defined for each episode) to receive gain-sharing. The blue bars indicate PAPs who met the cost requirements for gain sharing but did not meet the quality requirements.
This model rewards both absolute performance – with shared savings for those who are already performing commendably - and performance improvement, with potential for gain-sharing (or to move out of risk-sharing) as PAPs improve.
The thresholds are not meant to be constantly moving targets, but to give everyone a chance to improve performance and realize gain-sharing.
Principal Accountable Provider
SOURCE: Arkansas Payment Improvement Initiative; each vertical bar represents the average cost for a provider, sorted from highest to lowest average cost
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23. Ohio’s Episode Timeline
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24. Ohio’s Episode Timeline
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25. How To Read Your Report Summary Performance Quality Cost Types
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26. State Payment Reform Resources
Office of Health Transformation:
Medicaid:
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27. Payment Reform Update - Federal
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28. Fee Schedule Changes Eliminates SGR
Maintains fee-for-service structure, but transitioning to value-based system
Annual .5% increases until 2019
Payment freeze from 2020 to 2025
2026 updates depending on provider participation in alternate structures
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29. Transition From Fee-For-Service
Choice of Two Pathways
Merit Based Incentive Payment System
(MIPS)
Alternative Payment
Model
(APMs) or
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30. AMA and CMS MACRA Resources
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31. Merit-Based Incentive Payment System (MIPS)
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32. MIPS Merit-Based Incentive Payment System
Consolidates current measures and creates a composite performance score
Resource use not included in Year 1 now
Advancing care
Information
Year 1 – 25%
Year %
Improvement
Activities
Year 1 – 15%
Year 2 – 15%
Quality
Year 1 – 60%
Year 2 – 50%
Cost
Year 1 – 0%
Year 2 – 10%
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33. MIPS Quality Payment Program – 3 Options: - % + %
+ %
- %
Not participating in the Quality Payment Program (negative 4%).
Test: If you submit a minimum amount of 2017 data to Medicare, you can avoid a downward payment adjustment.
Partial: If you submit 90 days of 2017 data to Medicare, you may earn a neutral or positive payment adjustment.
Full: If you submit a full year of 2017 data to Medicare, you may earn a positive payment adjustment.
Don’t Participate Submit Something Submit Partial Year Submit Full Year
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34. MIPS – Composite Score Adjustments
Based on a MIPS composite performance score, clinicians will
receive + / - or neutral adjustments up to the percentages below
onward
Merit-Based Incentive Payment System
(MIPS)
Adjusted
Medicare Part B payment to clinician
+4%
-4%
+5%
+7%
+9%
-9%
-7%
-5%
+ / -
Maximum
Adjustments
The potential maximum
adjustment % will
increase each year from
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35. Benchmarks Available from CMS prior to each year
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36. Getting Started When does the Quality Payment Program start?
You get to pick your pace for the Quality Payment Program. If you're ready, you can begin January 1, 2017 and start collecting your performance data. If you're not ready on January 1, you can choose to start anytime between January 1 and October 2, Whenever you choose to start, you'll need to send in your performance data by March 31, You can also begin participating in an Advanced APM.
The first payment adjustments based on performance go into effect on January 1, 2019.
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37. Key Dates Submit Performance year Feedback available Payment
March 31, January 1, 2019
Performance:
Jan 1 – Dec 31, 2017, record quality data and how you used technology to support your practice
Send in performance data: Potentially earn positive payment adjustment under MIPS, send in data about the care you provided and how your practice used technology in 2017 by 03/31/2018.
Medicare gives you feedback about your performance after you send your data.
Payment: You may earn a positive MIPS payment adjustment for 2019 if you submit 2017 data by 03/31/2018.
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38. Alternative Payment Models (APM)
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39. APM Alternate Payment Models Option if opting out of MIPS
5% annual lump sum bonus
2019 – 2020: 25% of Medicare revenue
2021 – 2022: 50% of Medicare revenue or 50% of all payer revenue with 25% being Medicare
2023 and beyond: 75% of Medicare revenue or 75% of all payer revenue with 25% being Medicare
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40. APM Oversight done by Payment Model Technical Advisory Committee
Rules will establish review criteria
Comprehensive list of qualifying APMs
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41. Q&A Bringing physicians together for a healthier Ohio 41
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