1. Mastering the Mandatory Elements Of the Affordable Care Act February 26, 2014

2. Current Reform Landscape
OCT 2011
OCT
2012
OCT 2013
OCT 2014
OCT 2015
OCT 2016
OCT 2017
OCT 2018
OCT 2019
OCT 2020
Value-Based Purchasing
1.0%
1.25%
1.5%
1.75%
2.0%
30-day
readmissions 1%
1.0% 2%
2.0%
3.0%
Hospital-acquired conditions
1.0%
Market basket reductions
Updated January 2013
0.1%
0.1%
0.3%
0.2%
0.75%
Multifactor Productivity Adj*
1.0%
0.7%
0.5%
0.5%
0.4%
0.5%
0.65%
0.9%
0.7%
Documentation and Coding Adj (DCA)**
4.9%
1.9%
2.1%
2.1%
2.1%
2.1%
Across the board cuts to finance debt ***
2.0%
TOTAL IMPACT
6.0%
6.7%
8.1%
10.6%
10.5%
11.4%
9.3%
10%
9.4%
8.9%
8.7%
% = % of medicare inpatient operating payments
*The Multifactor Productivity Adjustment is an estimate generated by the CMS Office of the Actuary **DCA, also known as the behavioral offset, shown here does not show the future affects of these cuts on baseline spending. Estimates FY 2014-FY 2017 impact of the American Taxpayer Relief Act of 2012 *** If Congress has not adopted the Joint Committee’s report to reduce the deficit by at least $1.2 trillion, the 2% cut will be implemented April 2013

3. Building Blocks For Other Models

4. Timeline of Performance

5. The Medicare DRG Formula
Standard Federal Rate
Labor Portion
X Wage Index
Non Labor Portion
Adjusted Base Rate
Case Mix/DRG Weight
Generic Base Rate
DSH Adjustment + IME Adjustment
Payment

6. Value based purchasing
Payment Reform
Value based purchasing

7. VBP Shifting of Domain Weights
Patient Experience
Core Measures
Outcomes
Efficiency (MSPB)

8. New NQS Based Domains in FY 17
Note: The Clinical Care Component is split 25% Outcomes and 10% Process
Per August 13, 2013 Federal Register

9. What Determines Reimbursement?
Reimbursement Determined Two Ways
Improvement
Achievement
How we measure against ourselves
Did we do better than our baseline during our performance period
How we compare to Top Decile
Must Meet or Exceede the Mean Scores of Top Decile Performers

10. Achievement Threshold
Scenario on Scoring
AMI 7a- Fibrinolytic Therapy
.6548
Achievement Threshold
.9191
Benchmark
Score
.4287
Baseline
Score
.8163
Performance
Achievement Range (1-10)
Improvement Range (0-9)
Sourced: 2010 August Federal Register

11. FY 16 Clinical Process of Care 10%
Measure ID
Description
Achievement Threshold
Benchmark
AMI-7a
Fibrinolytic Therapy received within 30 min of hospital arrival
.91154
1.0000
IMM-2
Influenza Immunization
.90607
.98875
PN-6
Initial antibiotic selection for CAP in Immunicompetent pt
.96552
SCIP-Inf-2
Prophylatic Antibiotic Selection for Surgical Pts
.99074
SCIP-Inf-3
Prophylatic Antibiotics discontinued 24 hrs after surgery end time
.98086
SCIP- Inf-9
Urinary catheter removed on post op day 1 or 2
.97059
SCIP- Card-2
Surgery patients on beta blocker therapy prior to arrival who received a beta blocker during perioperative period
.97727
SCIP-VTE-2
Surgery patients who received appropriate VTE prophylaxes within 24 hours prior to surgery to 24 hours after surgery
.98225
Per August 13, 2013 Federal Register

12. Achievement Threshold
FY 16 Outcome Measures 40%
Measure ID
Description
Achievement Threshold
Benchmark
CAUTI
Catheter Associated Urinary Tract Infection
.801
.000
CLABSI
Central Line Associated Blood Stream Infection
.465
SSI
Surgical Site Infection
Colon
Abdominal Hysterectomy
.668
.752
Mort-30-AMI
AMI 30 day Mortality rate
Mort- 30-HF
HF 30 day Mortality rate
Mort- 30-PN
PN 30 day Mortality rate
PSI-90
Complication/patient safety for selected indicators (composite)
Per August 13, 2013 Federal Register

13. FY 16 Patient Experience of Care 25%
Description
Floor
Achievement Threshold
Benchmark
Communication with Nurses
53.99
77.67
86.07
Communications with Doctors
57.01
80.40
88.56
Responsiveness of Hospital Staff
38.21
64.71
79.76
Pain Management
48.96
70.18
78.16
Communication about Medicines
34.61
62.33
72.77
Hospital Cleanliness & Quietness
43.08
64.95
79.10
Discharge Information
61.36
84.70
90.39
Overall Rating of Hospital
34.95
69.32
83.97
Per August 13, 2013 Federal Register

14. 30 Day Risk-Standardized Mortality Rate Calculation=
Measure (AMI, HF, PN) National Crude Rate
Facility Predicted Deaths X
Facility Expected Deaths
This is 30 days post admission: the majority of these may be post discharge.

15. HF Mortality Formula Numerator & Denominator Description
The measure cohort consists of admissions for Medicare Fee-for-Service (FFS) and Veterans Health Administration (VA) beneficiaries aged 65 years and older discharged from non-federal acute care hospitals or VA hospitals, respectively, having a principal discharge diagnosis of heart failure (HF).
The hospital-specific risk-standardized mortality rate (RSMR) is calculated as the ratio of the number of "predicted" deaths to the number of "expected" deaths, multiplied by the national unadjusted mortality rate.
The "denominator" is the number of deaths expected on the basis of the nation's performance with that hospital's case mix.
The "numerator" of the ratio component is the number of deaths within 30 days predicted on the basis of the hospital's performance with its observed case mix.
It conceptually allows for a comparison of a particular hospital's performance given its case mix to an average hospital's performance with the same case mix. Thus, a lower ratio indicates lower-than-expected mortality or better quality, and a higher ratio indicates higher-than-expected mortality or worse quality.
Source:

16. Heart Failure Risk Adjustments
The final set of risk-adjustment variables included:
Demographics
Age-65 (years above 65, continuous)
Male
Cardiovascular
History of percutaneous transluminal coronary angioplasty (PTCA)
History of coronary artery bypass grafting (CABG)
Congestive heart failure
Acute myocardial infarction (AMI)
Other acute/subacute forms of ischemic heart disease
Chronic atherosclerosis
Cardio-respiratory failure and shock
Valvular and rheumatic heart disease
Comorbidity
Hypertension
Stroke
Renal failure
Chronic obstructive pulmonary disease (COPD)
Pneumonia
Diabetes and diabetes mellitus (DM) complications
Protein-calorie malnutrition
Dementia and senility
Hemiplegia, paraplegia, paralysis, functional disability
Peripheral vascular disease
Metastatic cancer, acute leukemia, and other severe cancers
Trauma in the last year
Major psychiatric disorders
Chronic liver disease
Source:

17. Efficiency Definition
Medicare Spending Per Beneficiary (MSPB)
Captures total Medicare spending per beneficiary, relative to a hospital stay, bundling hospital sources (Part A) with post acute care (Part B).
Bundles the cost of care delivered to a beneficiary for an episode of care across the continuum of care.
3 days prior to admission and 30 days post discharge
Indexed by the discharging hospital regardless of who provides services in the 3 days prior and 30 days post
The first performance period ended 12/31/13 for FFY 15 and the second one started 1/1/14 for FFY 16.

18. Medicare Spending Per Beneficiary
Lists percent of spending for the hospital vs. state and national statistics by provider type.

19. By MDC for each Hospital
Lists all 25 MDCs with state and national averages
Three additional reports along with the summary on Qnet: index admission file, beneficiary risk score file and an MSPB episode file.

20. Facts about FY 14 VBP Bonuses Penalties % With Bonuses
US Average
.24%
Penalties
-.26%
% With Bonuses
45%
LESS REIMBURSEMENT
A total of 1,451 hospitals got paid less in FY 14 vs FY 13 for VPB. 1,231 got paid more.
Largest Decrease 1.14%
$1.1B at play in FY 14 VBP
Change from FY 13 VBP
Largest increase .88%

21. Comparison of State Performance Value Based Purchasing: FFY 14
Average Bonus
Average Penalty
% of Hospitals w Bonus
Florida
.25%
-.25%
52%
Georgia
.23%
-.30%
45%
Alabama
.27%
54%
South Carolina
-.22%
Tennessee
.22%
-.23%
37%
National Average
.24%
-.26%

22. Value Based Purchasing Timelines

23. Readmissions Reduction Program
Payment Reform
Readmissions Reduction Program

24. Reform Readiness Amount at Risk 2013 2014 2015 2016 2017
Readmission Program (a)
1.0%
2.0%
3.0%
Value Based Purchasing (b)
1.25%
1.5%
1.75%
Hospital Acquired Conditions (a)
Total Potential Rates at Risk
3.25%
5.5%
5.75%
6.0%
a: Represents a worst case scenario and a ceiling of the maximum penalties
b: Represents a withhold of payment that can be earned back based on quality metrics

25. Readmission Reduction Program
Higher than expected admissions for
Heart failure
Acute Myocardial infarction
Pneumonia
And recently added Total Hip and Knee
Current being paid on 2% Year 2. Performance periods are in play for FFY

26. Readmission Timelines

27. Comparison of State Performance Readmissions: FFY 14
Average Penalty
% of Hospitals w NO Penalty
Florida
-.35%
19%
Georgia
-.30%
30%
Alabama
18%
South Carolina
-.42%
40%
Tennessee
-.52%
16%
National Average
-.38%
34%

28. Tennessee Hospital Performance: FFY 14
Penalized on VBP
Bonused on VBP
Value Based Purchasing
Penalized on
Readmissions
Readmissions
For FFY 2014

29. Georgia Hospital Performance: FFY 14
Penalized on VBP
Bonused on VBP
Value Based Purchasing
Penalized on
Readmissions
Readmissions

30. Florida Hospital Performance: FFY 14
Penalized on VBP
Bonused on VBP
Value Based Purchasing
Penalized on
Readmissions
Readmissions

31. Alabama Hospital Performance: FFY 14
Penalized on VBP
Bonused on VBP
Value Based Purchasing
Penalized on
Readmissions
Readmissions

32. South Carolina FY 14 Hospital Performance
Penalized on VBP
Bonused on VBP
Value Based Purchasing
Penalized on
Readmissions
Readmissions

33. Hospital acquired Conditions
Payment Reform
Hospital acquired Conditions

34. Reform Readiness Amount at Risk 2013 2014 2015 2016 2017
Readmission Program (a)
1.0%
2.0%
3.0%
Value Based Purchasing (b)
1.25%
1.5%
1.75%
Hospital Acquired Conditions (a)
Total Potential Rates at Risk
3.25%
5.5%
5.75%
6.0%
a: Represents a worst case scenario and a ceiling of the maximum penalties
b: Represents a withhold of payment that can be earned back based on quality metrics

35. Hospital Acquired Conditions: Final Rule for FFY 2015
First Domain 35% : PSIs
Performance Period: 7/1/11-6/30/13
Second Domain 65%: CDC
Performance Period: CY 2012 & 2013
Pressure Ulcer Rate
CLABSI
Foreign Object Left in Body
CAUTI
Iatrogenic Pneumothorax Rate
Postoperative Physiologic and Metabolic Derangement Rate
Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate
Accidental Puncture and Laceration Rate
1% Medicare Reimbursement at risk: All or none penalty
Lowest performing quartile will be penalized

36. HAC Domain Weightings DOMAIN 1: 35% DOMAIN 2: 65%
Pressure Ulcer Rate: 8.33%
CLABSI: 32.5%
Foreign Object Left
In Body: 8.33%
CAUTI: 32.5%

37. Proposed Future Measures: Domain 2
First Domain: PSIs
Second Domain: CDC
Pressure Ulcer Rate
CLABSI
Foreign Object Left in Body
CAUTI
Iatrogenic Pneumothorax Rate
SSI Following Colon Surgery (FY 2016)
Postoperative Physiologic and Metabolic Derangement Rate
SSI Following Abdominal Hysterectomy (FY 2016)
Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate
Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia (FY 2017)
Accidental Puncture and Laceration Rate
Clostridium Difficile (FY 2017)

38. Questions?
Thank you.