1. Value - Based Purchasing Presented by Kyle Bain For Kemal Erkan HCM-401 Course

2.  Definition & Factors  Critical Quality Measures  Calculations  Incentive Percentage Changing the Behavior

3.  Definition & Factors  Critical Quality Measures  Calculations  Incentive Percentage Changing the Behavior

4.  Definition  A Payment Reform under which Hospitals and other Providers are provided Bonuses based upon their performance against Quality Measures  Ranking and “Achievement Score” is based on Comparison and Improvements to a “Base-Line”  Factors (aka Domains) 1. Clinical Process of Care 2. “Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey” Changing the Behavior

5.  Definition & Factors  Critical Quality Measures  Calculations  Incentive Percentage Changing the Behavior

6.  “Clinical Process of Care” - 5 Specific Conditions 1. Acute Myocardial Infarction 2. Heart Failure 3. Pneumonia 4. Surgeries 5. Healthcare Associated Infections  “HCAHPS Survey” (Patient Survey)  1 Year Performance Period  First year based on ¾ of the fiscal year Changing the Behavior

7.  Definition & Factors  Critical Quality Measures  Calculations  Incentive Percentage Changing the Behavior

8.  CMS will Reduce Hospitals’ base Diagnosis Related Group (DRG) payments by 1% in 2013  2% in 2017 and beyond  Redistribution of about $850 Million  Hospitals in the Highest Percentile receive the Largest Incentive ▪ Top 25% = Incentive ▪ Bottom 25% = Penalty Changing the Behavior

9. Factors CQM Survey 1 1 Last Years Base Line Comparison to other Hospitals 2 2 3 3 4 4 5 5 Partial Score Final Score

10.  Definition & Factors  Critical Quality Measures  Calculations  Incentive Percentage Changing the Behavior

11.  Incentives  Top 95 th =.3% to.6% Bonus  Top 90 th =.3% to.4% Bonus  Top 75 th =.1% to.3% Bonus  Middle 50 th – No Bonus or Penalty  As required by law, all scores will be published on the “Hospital Compare” website  Hospital’s Domain-Specific Score  Hospital’s Condition Specific Score  Total Performance Score Changing the Behavior

12. Questions? Changing the Behavior

14.  Payments will be increasingly linked to performance  “Performance risk” will be increasingly transitioned to providers  Payers and consumers will become accountable; and a greater value will be placed on maintaining individual health

15.  ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the patients they serve  When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will have the opportunity to share in the savings it achieves

16.  The Affordable Care Act, signed by President Obama in March of 2010, requires CMS to establish a shared savings program in order to: ▪ Facilitate coordination and cooperation among providers ▪ Improve quality of care ▪ Reduce unnecessary costs

17.  The Shared Savings Program is designed to improve outcomes & increase value of care by: ▪ Promoting accountability for the care of Medicare FFS beneficiaries ▪ Requiring coordinated care for all services provided under Medicare FFS ▪ Encouraging investment in infrastructure and redesigned care processes

18.  Form a legal structure to receive and distribute shared savings to participating providers  3-year agreement  Have a minimum of 5,000 Medicare beneficiaries  Report Quality Measures

20.  CMS will begin accepting applications for the Shared Savings Program on January 1 st, 2012  First ACO agreements start on April 1 st, 2012 and July 1 st, 2012  First performance year will be 18 or 21 months

21.  Quality Assessments will be calculated based on 33 measures from the following 4 domains; 1. Patient Experience 2. Care Coordination and Patient Safety 3. Preventive Health 4. Caring for at-risk populations

22.  One-Sided Model  Share up to 50% of any savings they achieve compared to target spending  Two-Sided Model  Share up to 60% of the savings, but will also be accountable for losses

23.  Upfront Expenses  Final rule did create the “Advanced Payment Model” that provides upfront funds. This money would be recovered from any future shared savings achieved by the team of providers  Legal Issues  Stark & Anti-Kickback  HHS estimates that ACOs could save Medicare up to $940 million in the first 4 years  Far less than 1% of Medicare spending during that time period

24. Questions?