1. Accelerating Care and Payment Innovation: The CMS Innovation Center

2. Thank You For the care you are providing every day
For the hard work you are doing to improve your care systems every day
For your commitment to health care reform, innovation and transformation

3. Health Care Innovation: One Patient’s Story
Marie Jones, a high
risk patient, with her dedicated nurse case manager.
“The idea of the program is to keep me healthy, keep me out of the hospital, and keep costs down. I don’t think I would still be here without this program. It has been my lifeline.” – Marie Jones
New York Times, June 21, 2010

4. We need delivery system and payment transformation
Current State –
Producer-Centered
Volume-Driven
Unsustainable
Fragmented Care Systems
FFS Payment Systems
Future State –
People-Centered
Outcomes-Driven
Sustainable
Coordinated Care Systems
New Payment Systems
Value-based purchasing
ACO shared savings
Episode-based payments
Care management fees
Data transparency
PRIVATE
SECTOR
PUBLIC
SECTOR

5. The CMS Innovation Center“
Identify, Test, Evaluate, Scale
The purpose of the [Center] is to test innovative payment and service delivery models to reduce program expenditures…while preserving or enhancing the quality of care furnished to individuals under such titles. - The Affordable Care Act

6. Our Strategy: Conduct many model tests to find out what works
The Innovation Center portfolio of models
will address a wide variety of patient populations, providers, and innovative approaches to payment and service delivery 6

7. Delivery Transformation Continuum
Providers can choose to participate in the testing of different care delivery transformation models
with different amounts of Medicare payments at risk, while benefiting from supports and resources designed to spread best practices and enhance quality.
Partnership for Patients
Bundled Payment
Accountable Care Organizations
The Patient-centered
Health Care System
of the future
Comprehensive Primary Care
Shrunk it down means fewer dots…
Health Care Innovation Awards
Tools to Empower Learning and Redesign:
Data Sharing, Learning Networks, RECs, PCORI, Aligned Quality Standards 7

8. Providers are Driving Transformation
More than 50,000 providers are or will be providing care to beneficiaries as part of the Innovation Center’s current initiatives
Over 250 organizations are participating in Medicare ACOs
More than 4 million Medicare FFS beneficiaries are receiving care from ACOs
More than 1 million Medicare FFS beneficiaries are participating in primary care initiatives

9. Accountable Care Medicare Shared Savings Program (Center for Medicare)
Pioneer ACO Model
Advance Payment Model
Comprehensive ESRD Care Initiative 9

10. 4 million Medicare beneficiaries having care coordinated by 220 SSP and 32 Pioneers ACOs (Geographic Distribution of ACO Population)

11. The Pioneer ACO Model
GOAL: Test payment arrangements with higher risk and reward than MSSP, including partial- and full capitation arrangements, as well as a transition from FFS to population based payments.
Designed for health care organizations and providers that are already experienced in coordinating care
Requires ACOs to create similar arrangements with other payers.
Option for transition from shared savings to population-based payment in Year 3
32 Participating ACOs announced in December 2011
Over 900,000 aligned beneficiaries
First performance period began in January 2012. 11

12. Quality Measurement & Performance for ACOs
33 Quality measures are separated into the following four key domains:
Better Care
Patient/Caregiver Experience
Care Coordination/Patient Safety
Better Health
Preventative Health
At-Risk Population
ACOs must meet quality targets to share in savings and the amount of savings shared depends on quality performance

13. Comprehensive Primary Care Initiative
GOAL: Test a multi-payer initiative fostering collaboration between public and private health care payers to strengthen primary care.
Collaborating with public and private insurers in purchasing high value primary care in communities they serve.
Requires investment across multiple payers
individual health plans, covering only their members, cannot provide enough resources to transform primary care delivery.
Medicare will pay approximately $20 per beneficiary per month (PBPM) then move towards smaller PBPM to be combined with shared savings opportunity.
The 7 markets selected:
Ohio (Dayton), Oklahoma (Tulsa), Arkansas, Colorado,
New Jersey, Oregon, New York (Hudson Valley) 13 13

14. Comprehensive Primary Care Initiative14 14

15. Bundled Payments for Care Improvement
GOAL: Test payment models that link payments for multiple services patients receive during an episode of care for effectiveness in promoting coordination across services and reducing the cost of care.
Four models:
Acute care hospital stay only
Acute care hospital stay plus post-acute care
Post-acute care only
Prospective payment of all services during inpatient stay 15

16. Bundled Payments for Care Improvement: All Participants16 16

17. Bundled Payments: 4 Models
Episode
All acute patients, all DRGs
Selected DRGs + post-acute period
Post acute only for selected DRGs
Selected DRGs
Services included in the bundle
All Part A DRG-based payments
Part A and B services during the initial inpatient stay , post-acute period and readmissions
Part A and B services
during the post-acute period and readmissions
All Part A and B services (hospital, physician) and readmissions
Payment
Retrospective
Prospective
Participants
1 representing 24 health care facilities
53 representing 178 health care organizations
14 representing 164 health care organizations
37 representing 76 health care facilities
Quick recap of goals of BPCI
Align payment with how patients experience care
Foster quality improvement while decreasing the cost of an episode of care
Support and encourage providers interested in continuously redesigning care
Give providers as much flexibility as possible in redesigning care to meet the needs of their community
Remove barriers and provide opportunity for partnerships with providers and other stakeholders
We are asking providers to submit applications to participate in one or more categories of episode-based payment.
Quick recap of 4 models
The initiative includes four types of episodes of care
Model 1 is inpatient focused. It is an opportunity to redesign care for the entire hospital. This model will use an episode of care focused on the acute care inpatient hospitalization, and will include Part A inpatient hospital services for all MS-DRGs. It includes a discount on all DRGs that is phased in over the three year period.
Model 2 includes the acute and post acute period associated with the hospital stay. The applicant can select the DRGs they want to bundle and specify a Post-acute period. They also propose length of the episode and a discount to Medicare on historical Medicare payment for an episode.
Model 3 includes the Post-acute period only. Applicants can propose an episode of care consisting of the post-acute care following an acute hospital stay. Applicants will propose the conditions that will be included in the episode of care and the length of the episode, which can be as short as 30 days after the episode begins or as long as the applicant wants. Like Model 2, applicants for Model 3 will propose a target price that incorporates a discount on historical Medicare payment for an episode.
Models 1-3 are paid retrospectively meaning that Medicare will pay all providers using the regular FFS payment systems. After the end of the episode, expenditures for the episode will be compared to the target price. If the actual expenditures exceed the target price, the awardee will pay the difference to Medicare. If the actual expenditures are less than the target price, Medicare will pay the difference to the awardee. Any gains arising from care improvement in this model, including any payments from Medicare for expenditures less than the target price, can be shared between the post-acute providers, physicians, and any other providers.
Model 4 builds on the ACE demonstration, and will use a single prospective payment for hospital and physicians’ services for the acute care hospital stay and related readmissions. Applicants will propose the conditions that will be included in the episode of care, as well as proposing what readmissions will be included and the post-discharge window for related readmissions.
They will also propose a target price for the episode that includes a discount on expected Part A and Part B payments for all hospital facility and professional services during the episode.
Medicare will pay the single, prospectively-determined bundled payment to the admitting hospital, and the hospital will be responsible for distributing payment to providers as appropriate. Physicians would be paid by the hospital for their professional services, which could be at the same rate as the FFS payment that would otherwise apply, or could be at another rate agreed to between the physicians, hospital, and any other participating provider.
Applicants have great flexibility to propose the conditions that will be targeted, the length of the episode, the discount, target price, or bundled payment amount, quality measures, gain sharing methodology, and other components of the initiative.

18. Health Care Innovation Awards Round Two
GOAL: Test new innovative service delivery and payment models that will deliver better care and lower costs for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollees.
Test models in four categories:
Reduce Medicare, Medicaid and/or CHIP expenditures in outpatient and/or post-acute settings
Improve care for populations with specialized needs
Transform the financial and clinical models for specific types of providers and suppliers
Improve the health of populations
Letter of Intent due June 28, 2013
Applications due August 15, 2013

19. National Outcomes are Improving

20. We are starting to see results nationally
Cost trends are down, Outcomes are Improving & Adverse Events are Falling
Total U.S. health spending grew only 3.9 percent in 2011
Medicare 30-day, all-cause readmission rate is estimated to have dropped 1 percent after being at 19 percent for five years
70,000 fewer readmissions in 2012
Expanding coverage with insurance marketplaces gearing up for 2014

21. Results: Medicare Per-Capita Spending Growth at Historic Low
Source: CMS Office of the Actuary, Midsession Review – FY 2013 Budget

22. Our Ask: Continue the work of improving quality and patient safety
Push your organizations to support this transition to a sustainable patient center healthcare system
Chose Your Pathways:
ACOs, Models focused on Primary Care, Bundled Payments for Care Improvement, State Innovation Models
Make your personal commitment to transformation

23. Appendix

24. Multi-payer Advanced Primary Care Practice Model
GOAL: Test the effectiveness of offering providers a common payment method from Medicare, Medicaid, and private health plans.
Medicare will participate in existing State multi-payer health reform initiatives.
Must include participation from Medicaid and private health plans.
Monthly care management fee for beneficiaries receiving primary care from Advanced Primary Care practices.
Eight states selected: Maine, Vermont, Rhode Island, New York, Pennsylvania, North Carolina, Michigan and Minnesota. 24

25. Federally Qualified Health Center (FQHC) Advanced Primary Care Demonstration
GOAL: Evaluate impact of the advanced primary care practice model in the Federally Qualified Health Center (FQHC) setting.
Open to FQHCs that have provided medical services to at least 200 Medicare beneficiaries in previous 12-month period.
FQHC receives care management fee for each Medicare beneficiary enrolled.
485 FQHCs selected.
Performance year started Nov 1, 2011. 25

26. Independence at Home
GOAL: Testing the effectiveness of providing chronically ill beneficiaries with home-based primary care.
Medical practices provide chronically ill beneficiaries with home-based primary care.
Practices must serve 200 targeted beneficiaries living with multiple chronic diseases to be eligible
Beneficiaries must be living with multiple chronic diseases
Incentive payments for practices successful in:
meeting quality standards; and
reducing total expenditures
15 independent practices and 3 consortia participating 26

27. Graduate Nurse Education Demonstration
GOAL: To increase the provision of qualified training supply of to Advanced Practice Registered Nursing (APRN) students in order to provide access to primary care services for the increasing number of Medicare beneficiaries.
4 year demonstration where participating hospitals will be paid for the reasonable costs of the non-hospital community- based care setting clinical training component of the APRN degree requirements
Hospitals must partner with schools of nursing and community-based care settings and can partner with other hospitals
5 hospitals participating 27

28. Initiatives Focused on Medicare-Medicaid Enrollees
Financial Alignment Initiative
Initiative to Reduce Avoidable Hospitalizations of Nursing Facility Residents 28

29. Financial Alignment Initiative
GOAL: Test two models for effectiveness in improving quality of care for Medicare-Medicaid enrollees and reducing costs to Medicare and Medicaid.
Two Demonstration Models:
Capitated Model: Three-way contract among State, CMS and health plan to provide comprehensive, coordinated care in a more cost- effective way.
Managed FFS Model: Agreement between State and CMS under which States would be eligible to benefit from savings resulting from initiatives to reduce costs in both Medicaid and Medicare.
Participating states: Massachusetts, Washington, Ohio, Illinois, California, Virginia 29

30. Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents
GOAL: Test evidence-based interventions for their effectiveness in reducing preventable inpatient hospitalizations among residents of nursing facilities.
Participants implement evidence-based interventions at a minimum of 15 Medicare-Medicaid certified nursing facilities.
7 organizations selected to participate
Interventions must:
Improve beneficiary safety through coordinating management of prescription drugs
Bring onsite staff to collaborate and coordinate with providers
Demonstrate a strong evidence base 30

31. Capacity to Spread Innovation
Partnership for Patients
Community Based Care Transition Program
Million Hearts
Innovation Advisors Program
Care Innovations Summit 31

32. Partnership for Patients
GOALS:
40%
Reduction in Preventable Hospital-
Acquired Conditions
1.8 Million Fewer Injuries | 60,000 Lives Saved
20%
Reduction in 30-Day Readmissions
1.6 Million Patients Recover without Readmission 32
partnershipforpatients.cms.gov

33. Hospital Engagement Networks
American Hospital Association
Premier
VHA
NC Hospital Assoc
Intermountain HealthCare
GA Hospital Assoc
TX Hospital Assoc
MN Hospital Assoc
NY State Hosp Assoc
IA Healthcare Collaborative
PA Hospital Assoc
WA Hospital Assoc
Dallas Fort Worth Regional Hospital Assoc
OH Hospital Assoc
NJ Hospital Assoc
Ascension Health
TN Hospital Assoc
MI Hospital Assoc
National Public Hospital & Health Institute
Lifepoint
Joint Commission Resources
OH Children’s Hospital
Dignity Healthcare
NV Hospital Assoc
Carolinas Health Care
University Health Care Collaborative 33

34. Community-based Care Transitions Program (CCTP)
GOALS: Test models for improving care transitions from the hospital to other settings and reducing readmissions for high-risk Medicare beneficiaries
Open to community-based organizations partnered with hospitals
Currently 102 participants
$300 million in total funding
Participants in all 10 CMS Regions 34

35. Million Hearts Initiative
GOAL: Prevent 1 million heart attacks and strokes in 5 years
Focus, coordinate, and enhance cardiovascular disease prevention activities across the public and private sectors.
Will scale-up proven clinical and community strategies to prevent heart disease and stroke across the nation.
Led by Centers for Disease Control and Prevention and Centers for Medicare and Medicaid Services within HHS.
Partners include: American Heart Association, YMCA, and many other private and public organizations. 35

36. Initiatives Focused on the Medicaid Population
Medicaid Emergency Psychiatric Demonstration
Medicaid Incentives for Prevention of Chronic Diseases
Strong Start Initiative 36

37. Medicaid Emergency Psychiatric Demonstration
GOAL: Test whether Medicaid Beneficiaries aged 21 to 64 who are experiencing a psychiatric emergency (suicidal or homicidal thoughts or gestures) get more immediate, appropriate care when institutions for mental diseases (IMDs) receive Medicaid reimbursement
Demonstration provides up to $75 million in federal matching funds over 3 years
Demonstration pays for inpatient services necessary to stabilize the psychiatric emergency
11 States – Alabama, California, Connecticut, Illinois, Maine, Maryland, Missouri, North Carolina, Rhode Island, Washington, and West Virginia – and the District of Columbia applied and were selected to participate 37

38. Medicaid Incentives for Prevention of Chronic Diseases (MIPCD)
GOAL: Testing the impact of providing incentives to Medicaid beneficiaries who participate in prevention programs and demonstrate changes in health risk and outcomes, including the adoption of healthy behaviors.
One or more of the following prevention goals must be addressed:
tobacco cessation
controlling or reducing weight
lowering cholesterol
lowering blood pressure
avoiding the onset of diabetes or in the case of a diabetic, improving the management of the condition
Grants awarded to:
California, Montana, New York, Connecticut, Nevada, Texas,
Hawaii, New Hampshire, Wisconsin, Minnesota 38

39. Strong Start: Strategy 1
GOAL: Test ways to encourage best practices and support providers in reducing early elective deliveries prior to 39 weeks.
3 primary activities:
Promote Awareness – support broad-based awareness efforts in partnership with March of Dimes, American College of Obstetricians and Gynecologists and other organizations.
Spread Best Practices – building on efforts of Partnership for Patients to create measureable goals and provide technical assistance in testing and implementing a variety of strategies.
Promote Transparency – support efforts to collect performance data and measure success and continuous improvement. 39

40. Strong Start: Strategy 2
GOAL: Test effectiveness of prenatal care approaches to reduce preterm births for women covered by Medicaid or CHIP who are at risk for preterm births
Testing 3 approaches to the delivery of enhanced prenatal care
Targets women receiving Medicaid and at risk for having a preterm birth
Up to $43 million in funding to 27 awardees (announced February 15, 2013)
Awards will be located in 32 states, the District of Columbia and Puerto Rico, and will serve more than 80,000 women enrolled in Medicaid or CHIP over the three intervention years 40

41. Health Care Innovation Awards
GOAL: Test a broad range of innovative service delivery and payment models that achieve better care, better health and lower costs through improvement in communities across the nation.
107 Projects Awarded in Round 1
Awards range from approximately $1 million to $30 million for a three- year period.
Funding activity in all 50 states
Nearly 3000 applications received
Applications were accepted from providers, payers, local government, public-private partnerships and multi-payer collaboratives. 41

42. Health Care Innovation Awards42

43. State Innovation Models
GOALS:
Partner with states to develop broad-based State Health Care Innovation Plans
Plan, design, test and support of new payment and service and delivery models in the context of larger health system transformation
Utilize the tools and policy levers available to states
Engage a broad group of stakeholders in health system transformation
Coordinate multiple strategies into a plan for health system improvement 43

44. State Innovation Models Awardees
Model Testing States
Model Design States
Pennsylvania
Arkansas
California
Rhode Island
Maine
Connecticut
Tennessee
Massachusetts
Delaware
Texas
Minnesota
Hawaii
Utah
Oregon
Idaho
Vermont
Illinois
Model Pre-Testing States
Iowa
Maryland
Colorado
Michigan
New York
New Hampshire
Washington
Ohio
(Announced 2/21/13) 44

45. State Innovation Models45

46. Innovation is happening broadly across the country46

47. Thank You
innovation.cms.gov 47