1. State Payment Reform Bringing physicians together for a healthier Ohio
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Bringing physicians together for a healthier Ohio 1

2. 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).
Bringing physicians together for a healthier Ohio

3. Bringing physicians together for a healthier Ohio

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15. Ohio Comprehensive Care Initiative
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Bringing physicians together for a healthier Ohio 15

16. Episodes of Care Bringing physicians together for a healthier Ohio 16
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Bringing physicians together for a healthier Ohio 16

17. 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
Bringing physicians together for a healthier Ohio

18. 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
Bringing physicians together for a healthier Ohio

19. Ohio’s Episode Timeline

20. How To Access Your Report
View Notification of new episode report
Determine list of episode reports to view
Open individual reports
Download and save episode report
aymentInnovation/Access-Your-Report-FFS pdf

21. How To Read Your Report Summary Performance Quality Cost Types
mentInnovation/HowtoReadYourReport.pdf

22. State Payment Reform Resources
Office of Health Transformation:
atives/payforvalue.aspx
Medicaid:
on.aspx
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