1. Changes in Payer Models
Why all the new models?
Code for Risk Shift
Medicare cannot require patients to use a managed care plan
Value based and quality purchasing is Medicare’s way of converting FFS to risk
Commercial insurers are following the lead

2. The Big Picture
CMS plans to have 50% of Medicare services provided through quality based programs by 2018
Medicaid will have all services included in the HMO contract by 2018
Private Carriers are narrowing their networks based on quality
Government’s resources will be focused on enforcing quality and transparency

4. Medicare Quality Initiatives
Range of programs that run along a risk continuum:
Value Based Purchasing
Readmission Penalties
Bundled Payments
ACOs
Biggest target Nursing Facility patient days

5. Medicare Quality based programs

6. Nursing Home Readmission Penalties
Protecting Access to Medicare Act of 2014 (PAMA), included a value-based purchasing program for nursing facilities which establishes an incentive pool for high performing facilities that are preventing unnecessary hospital readmissions
Medicare nursing home reimbursement rates will be based partially on their performance scores beginning on October 1, 2018
Nursing facilities with the highest rankings receive the highest incentive payments while those with a zero or low ranking will receive the lowest incentive payments
Effectively, the lowest 40 percent of facilities will be reimbursed less than they otherwise would in the absence of this program
CMS will withhold 2% of Medicare payments starting October 1, 2018 to fund the incentive pool
CMS will then redistribute 50-70% of the withhold back into to facilities by way of incentive payments
The balance from 30-50% will be retained as savings to Medicare

7. Medicare ACO programs
Medicare Shared Savings Program - For fee-for-service beneficiaries (30 ACOs in NJ)
ACO Investment Model - For Medicare Shared Savings Program ACOs to test pre-paid savings in rural and underserved areas
Advance Payment ACO Model - For eligible providers already in or interested in the Medicare Shared Savings Program
Comprehensive ESRD Care Initiative - For beneficiaries receiving dialysis services (1 ACO in NJ)
Next Generation ACO Model - For ACOs experienced in managing care for populations of patients
Pioneer ACO Model - Health care organizations and providers already experienced in coordinating care for patients across care settings

8. NJ’s 30 Medicare Shared Savings ACOS
Advocare Well Network
Allegiance ACO
Atlantic ACO
AtlantiCare Health Solutions, Inc.
Barnabas Health Care Network
Capital Health Accountable Care Organization, LLC
Central Jersey ACO LLC
Hackensack Alliance ACO
Inspira Care Connect, LLC
JFK Health ACO
Meridian Accountable Care Organization, LLC
NJ Physicians ACO
Optimus Healthcare Partners, LLC
RWJ Partners LLC
VirtuaCare
15 New 2016 Participants

9. Bundled payments Payment based on Episodes of Care
Multiple DRGs are eligible including cardiac care and joint replacement
4 Models currently being tested in NJ:
Model 1 – Hospital admission only (8 )
Model 2 – Hospital and Post Acute (10)
Model 3 – Post Acute only (24)
Model 4 – Hospital admission – Prospective Payment (2)

10. Comprehensive Care for Joint Replacement Model (CCJR)
Began April 2016, hospital participation is mandatory
The hospital in which the joint replacement takes place is at risk for quality and costs for the entire episode of care, from surgery through 90 days post-discharge
The demonstration program will last for 5years, covering more than 40 New Jersey hospitals and almost 200 post-acute providers in NYC MSA.
Downside risk does not begin until year 2

11. Where the savings are in the bundle

12. Medicare Advantage

13. Medicaid Managed Care
Managed Long Term Supports and Services (MLTSS) began July 2014
All individuals that become eligible for long-term care are enrolled in an HMO
Existing nursing home residents remain in FFS
Rates and Any Willing Provider provision extended thru June 2017
HMOs will be permitted to use quality measures to make referrals
Experience Medical Day and Personal Care

14. Medicaid Long Term Care

15. NJ Medicaid HMOs
Total Medicaid HMO Enrollment = 1,636,242

16. Medicaid Long-Term Care Recipients By Age and Medicare Status

18. Takeaways
Maintain strong quality metrics – reimbursement will be tied to performance
Consider vertical integration strategies such as partnering with Home Health and Medical Day Care
Participate in Bundled Payment programs to prepare for the shift in risk coming in the next 5 years
Insurers will follow on bundled payments

19. Questions?