1. Fundamentals of Reform/ HFMA Update
Melinda Hancock
National Chair Elect
West Virginia Chapter
January 15, 2015

2. Our Transformational Point of View2

3. Industry Transformation
Revenue
Time
How do local market conditions impact timing considerations?
Can market-changing events create an urgent paradigm shift?
What is my step-change business model risk?
Do I have the financial tools to adequately analyze relevant states?

4. Growth in Risk Based Contracts
The Advisory Board reported last summer that risk-based, total-cost-of-care contracts with large multi-hospital systems had more than doubled since 2011 from 14 to 35 percent. Similar results for bundled payments have occurred with commercial payers around the country. United Healthcare, the nation’s largest health insurer, announced they will double their accountable care contracts by 2017 ($20 billion of United Healthcare’s 2013 payments were tied to quality and cost efficiency measures.)

5. ACA Estimated Gains Through 2019:$64.4B
Amounts in Billions
Source:CBO and Joint Committee on Taxation, Projection

6. The Continuum of Risk
Source: Hancock, M., Hannah, B. “Determining Your Organization’s Risk Capability”, HFM, May 2014.
Source:

7. Alignment of Strategy and Metrics
Questions to Ask
How many metrics am I tracking?
How many metrics are duplicated? Do they have the same numerator and denominator? Source?
Are they aligned with our results and strategic goals?
What contracts are coming up for renewal that should have new metrics or should be at risk (mgd care, medical directorships, PMAs, etc.)
What are we focused on?

8. VBP Shifting of Domain Weights
FY 2013
FY 2014
FY 2015
FY 2016
Core Measures
Outcomes
Patient Experience
Efficiency (MSPB)

9. New NQS Based Domains for FY 2017
Clinical Care - Process = 5%
HCAHPS = 25%
Clinical Care - Outcomes = 25%
Safety = 20%
MSPB = 25%

10. Reform Timeline

11. VBP FY 2017 – Patient Experience
Communication with Nurses
Communication with Doctors
Responsiveness of Hospital Staff
Pain Management
Communication about Medicines
Cleanliness and Quietness of Hospital
Discharge Information
Overall Rating of Hospital

12. VBP FY 2017 – Clinical Care: Process
AMI-7a
IMM-2
PC-01
PC-01 = Elective Delivery Prior to 39 Completed Weeks Gestation

13. VBP FY 2017 – Clinical Care and Safety
Clinical Care- Outcomes
30 Day Mortality – AMI
30 Day Mortality – HF
30 Day Mortality – PN
AHRQ – PSI-90
CLABSI
CAUTI
SSI-Colon
SSI-Abdominal Hyster.
Safety
MRSA
C. Diff

14. VBP FY 2017 - Efficiency Medicare Spend 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 across the continuum of care:
3 Days Prior
Hospital Inpatient Stay
30 Days post Discharge

15. VBP: MSPB
Sample US

16. VBP: MSPB

17. PROPOSED MSPB Measures
Additional Efficiency Measures proposed to be added
Risk Adjusted similarly to MSPB
Proposed to facilitate alignment with the Physician Value Based Payment Modifier program
Includes Part A and B and 3 days prior to admission and 30 days post discharge
Medical
Surgical
Kidney/Urinary Tract Infection
Hip replacement/revision
Cellulitis
Knee replacement/revision
Gastrointestinal hemorrhage
Lumbar spine fusion/refusion
SOURCE: May 1, 2014 Federal Register

18. System was penalized $376,003 in FY’15 VBP Program
Must acknowledge the amount UNEARNED
Of the programs dollars made available:
System did not capitalize on $6,187,541

21. Drilldown on Outcomes…
Variation within the Domain:
Maxed out on AMI Mortality and then got a 0 on CLABSI

22. West Virginia VBP FFY 13-15
Bonus

23. FY 19 New Measure Added THA/TKA for 30 month performance period.
January 1, 2015-June 30, 2017
Baseline of July 1, 2010-June 30, 2013
Risk standardized measure for complications after Total Hips and Knees surgeries for up to 90 days post surgery
One of eight complications: AMI, pneumonia, sepsis, SSI, PE, death, mechanical complication or periprosthetic joint infection/wound infection.
Each has a defined time frame
Each is a ‘Yes’ or ‘No
Risk adjusted for patient age, sex and comorbidities
SOURCE: August 2014 Proposed Rules Federal Register

24. Reform Timeline

25. Readmission Reduction Program
9% of Current and Future Medicare Reimbursement at Risk
3% penalty of Medicare Reimbursement at risk each program year
Measured Populations 30 days from DISCHARGE
AMI, HF, PN, COPD, THA & TKA
August 2014: CABG Added to FY 2017
Performance Periods: 3 Year Rolling Program
FY’15: July 1, 2010 – June 30, 2013 – 3%
FY’16: July 1, 2011 – June 30, 2014 – 3%
FY’17: July 1, 2012 – June 30, 2015 – 3%
FY’18: July 1, 2013 – June 30, 2016 – 3%
FY’19: July 1, 2014 – June 30, 2017 – 3%
Currently participating in 3 performance periods simultaneously

26. How are Readmissions Measured?
Scoring Index based at 1.0
Calculate Excess Readmission Ratio
Excess Readmission Ratio > 1 = BAD
Excess Readmission Ratio < 1 = GOOD
Facility Predicted Value
Facility Expected Value

27. West Virginia RRP Penalties FFY 13-15

28. Hospital Acquired Conditions
12 Hospital Acquired Conditions Identified
Divided in to 2 Domains
If a hospital is in the BOTTOM QUARTILE (worst performing 25% in the country), it will be penalized a FULL 1% of Medicare Reimbursement
Penalties will begin FY’15 (beginning October 1, 2014)
*1% After DSH, Uncompensated Care, and IME

29. Hospital Acquired Conditions: FY’15
First Domain: PSIs
Performance Period: 7/1/11-6/30/13
Second Domain: 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

30. HAC Domain Weightings: FY’15
Pressure Ulcer Rate: 8.33%
CLABSI: 32.5%
Foreign Object Left
In Body: 8.33%
CAUTI: 32.5%

31. Hospital Acquired Conditions: FY 2016
First Domain: PSIs
25%
Second Domain: CDC
75%
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
Accidental Puncture and Laceration Rate

32. HAC Domain Weightings: FY’16
Pressure Ulcer Rate: 5.83%
CLABSI: 32.5%
SSI: 32.5%
CAUTI: 32.5%

33. Hospital Acquired Conditions: FY 2017
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)

34. Reform Timeline

35. Penalties & Your DRG Payment

36. West Virginia HAC Scores: FFY 15
Penalized

37. Best practices for patient-centered care
Risk Capability
The Risk Capable Health Organization
Risk management in an efficient and profitable organization
Maximize portfolio reimbursement to foster financial success
Integrated provider network that enhances the continuum of care and creates value
Educated patients with accountability who utilize services appropriately
Incentivized providers that manage quality and costs
Provider criteria with defined metrics to ensure compliance
Best practices for patient-centered care 37

38. Thoughts from John Glaser, CEO
“Under payment models that reward efficiency and high-quality care, if a hospital or health system is losing money due to inadequate clinical performance, it cannot afford to wait one or more months to find out the problem. Healthcare leaders should understand how their organizations are performing today so they can take corrective action before revenue loss becomes a hemorrhage. “ -May 2014 HFM Magazine

39. Policy and Perspectives
HFMA Resources 39

40. Healthcare Dollars & Sense™
HFMA continues to look for ways to keep patients and consumers front and center in everything we do, because we recognize that the consumerism trend is here to stay.
Our Dollars & Sense initiative seeks to make sense of healthcare pricing and payment for consumers.
The initiative has three components:
Improving price transparency to make it easier for consumers to get price information;
Patient financial communications best practices, which offer providers and their revenue cycle staff guidance for talking with patients about billing and payment; and
Medical account resolution best practices, which provide guidance on resolving financial obligations before…during…and after a patient visits a hospital or other healthcare setting.
hfma.org/dollars 40

41. Price Transparency Task Force Convened by HFMA
For the Price Transparency effort, HFMA appointed a Task Force that included representatives from:
America’s Health Insurance Plans,
American Hospital Association,
Catalyst for Payment Reform,
Community Health Advisors, and
The other groups shown here, including a patient.

42. Enhancing Price Transparency
Clarifies basic definitions that are often misused
Sets forth guiding principles
Establishes roles for payers, providers, others
Reflects consensus of key stakeholders
As a result of their deliberations, the task force reached consensus on how consumers can obtain clear and easy-to-understand information about their financial obligation for healthcare services…before any tests or procedures are performed. 
The report starts by clarifying definitions and goes on to set forth guiding principles and recommendations for price transparency that highlight how hospitals, physicians, and health plans can share reliable information on healthcare prices with consumers.
Combined with other relevant information…such as quality and safety…price information will help consumers make more informed healthcare decisions.
hfma.org/dollars

43. Price Information Guide to Educate & Engage Consumers
Describes how to request price estimates, step by step
Clarifies what estimates may or may not include
Explains in-network and out-of-network care
Defines key terms
Available for posting on your website at no charge
Hardcopies available for purchase in bulk at a nominal price through AHA’s online store: ahaonlinestore.org
HFMA has also developed a guide to help consumers understand:
Where to get answers to their questions about healthcare price
How to compare prices among providers, and
How to manage their out-of-pocket costs.
Publication of the guide marked the first time HFMA developed a report specifically for consumers.
Hundreds of providers and other healthcare organizations are now offering it to patients as an online resource.
hfma.org/dollars

44. Communication Is Critical Throughout the Process
Every day, healthcare professionals conduct sensitive financial discussions with patients. But there have been no accepted, consistent best practices to guide them in these discussions—until now
The second component of HFMA’s Dollars & Sense initiative regards “Patient Financial Communications.”
Most people are uncomfortable talking about money, let alone asking someone for payment. And asking someone for payment when they’re in an inherently stressful medical situation is especially difficult. But this is what our frontline revenue staff have to do every day.
HFMA wanted to make this process easier, not only for those staff members, but also and especially for the patients. And that’s how the patient financial communications best practices came about.
The best practices were developed by a steering committee of experts across many fields, including representatives of patients, hospitals, physicians, and others.
National policymakers advised the project:
Sen. Tom Daschle
Sen. Bill Frist,
Former Secretary of Health and Human Services Donna Shah-LAY-lah, and
Gov. Michael Leavitt
hfma.org/dollars

45. Patient Financial Communications: Best Practices Address Key Issues
Provision of Care
Registration and Insurance Verification
Financial Counseling
Patient Share
Prior Balances (if applicable)
Balance Resolution
The best practices address patient communications on all of these topics:
Provision of care
Insurance verification
Financial counseling
Patient’s share or financial responsibility for service, and
Policies for handling unpaid balances.

46. Patient Financial Communications Training Program
Agenda for live training
Slide deck that can be customized
Sample financial policies
Coaching guidelines
HFMA launched its new “Patient Financial Communications Training Program” at the MAP event in November.
Goals of the new training program include:
Help providers educate patients about their financial responsibility
Provide tools for staff to more effectively conduct sensitive financial conversations with patients
Train staff teams to effectively communicate with patients, in a respectful manner, in ways that enhance patient satisfaction
Allow leaders to customize the training for their respective organizations

47. Recognition to Signify Commitment to Your Community
Recognition demonstrates commitment to best practices in patient financial communications
Based on HFMA review of an application and supporting documentation
All provider organizations may apply
Recognition valid for two years
Adopters may use the phrase “Supporter of the Patient Financial Communications Best Practices” in their marketing materials
Makes a strong statement to your community .
hfma.org/dollars

48. Best Practices for Resolution of Medical Accounts
By following the HFMA Best Practices for Medical Account Resolution, your organization is affirming that. . .
We want to find solutions that are balanced, fair, and reasonable.
We keep patients informed about payment expectations and time frames.
The business practices that we—and our business affiliates use—have been approved at the Board level.
The third component of HFMA’s Dollars & Sense Initiative pertains to “Medical Account Resolution.”
This effort was led by the Medical Debt Task Force. HFMA partnered with ACA – not the Affordable Care Act-- the Association of Credit and Collections Professionals – and brought together provider organizations…our business partners in the collection agencies…and patient advocates to develop a best practice workflow that builds off of HFMA’s previous patient-friendly billing work and spans the revenue cycle.

49. Best Practices for Resolution of Medical Accounts
The best practices are designed to improve communication between patients and providers and standardize and better coordinate all business practices related to medical account resolution.
The goal was to improve both the efficiency of the revenue cycle and the patient experience.
Both the best practice workflow and its accompanying white paper are available on the HFMA website at hfma.org/dollars
Our hope is that these practices will be adopted throughout the healthcare industry…offering clear guidance on resolving financial obligations before, during, and after a patient visits a hospital or other healthcare setting.
hfma.org/dollars

50. Leading the Change from Volume to Value
Defining and delivering value
Key organizational capabilities for building value
Organizational road maps
hfma.org/valueproject
Another initiative…the HFMA Value Project…helps healthcare organizations create value for the multiple purchasers of health care. The transformation toward a value-based healthcare system is reshaping the delivery of care, patient expectations, and payment structures.
In the resources HFMA has produced for the Value Project since its inception in 2010, healthcare finance leaders and clinical partners come together to:
Define the practices of providers who are leading the way toward a value-based healthcare system
Describe the primary capabilities that healthcare organizations will need to develop in the areas of people and culture, business intelligence, performance improvement, and contract and risk management to improve the value of care provided
Provide specific strategies, tactics, and tools that healthcare organizations can use to build, enhance, and communicate their value capabilities
Identify the trends today that are defining the future state of value in health care and describe new care delivery models that could help healthcare organizations create value

51. HFMA Value Project Reports
Acquisition and Affiliation Strategies
Acquisition and
Affiliation Strategies
Current State & Future Directions of Value
Value In Health Care
HMFA’s Value Project
Four Key Capabilities for Value
Building
Value-Driving
Capabilities
Defining &
Delivering Value
Defining and
Organizational Road Maps for Value-Driven Health Care
The Value Journey:
Organizational Road Maps for Value Driven
Health Care
This slide features the various reports produced as part of the Value Project.
hfma.org/valueproject

52. New Research Extends Value Strategies Outside the Organization
Value-focused acquisition and affiliation strategies
Different needs require different approaches
Emergence of new organizational combinations
Blurring of lines between competitors and collaborators
Change governance and organizational structures as systems change
I’d like to take a moment to highlight the two newest Value Project reports, which were published in 2014.
First…HFMA’s Value Project research on acquisition and affiliation strategies…which was published last June.
Key findings from the research:
An emphasis on value-focused acquisition and affiliation strategies
An understanding that different needs require different approaches
The emergence of new organizational combinations
A blurring of lines between competitors and collaborators
The need to change governance and organizational structures as systems change

53. New HFMA Value Report Focus: Critical Role of Physicians
Alignment and employment options
Compensation and incentives
Financial support and sustainability of the physician enterprise
Physician leadership and governance structures
Population management capabilities
The latest report from HFMA’s Value Project…was published in November 2014…and focuses on how the transition to value affects physician strategy in the following areas:
Alignment and employment options
Compensation and incentives
Financial support and sustainability of the physician enterprise
Physician leadership and governance structures
Population management capabilities
You can access these Value Project reports on our website at hfma.org/valueproject