11/24/2014. Current Trends in Healthcare Reform. Maximizing Value for Consumers. Provider Reimbursement Models

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1 David R. Swann, MA, LCAS, CCS, LPC, NCC e Council for Behavioral Healthcare 2014 David Swann, MA, LCAS, CCS, LPC, NCC Senior Healthcare Consultant MTM Services Mike Forrester, PhD Chief Clinical Officer Partners Behavioral Health Management Niels Eskelsen, MBA Chief Business Officer Partners Behavioral Health Management 2 Current Trends in Healthcare Reform Maximizing Value for Consumers Provider Reimbursement Models 3 1

2 Moving from carve out Medicaid BH funding to Section 1115 Integrated Waivers (Alabama, Arkansas, Kansas, Illinois, etc.) Movement to Care Coordination Entities and Managed Care Community Networks (Illinois, Oregon) 14 plus states have applied under Section 2703 of the ACA to develop Integrated Care Health Homes Excellence in Mental Health Act states will be selected. 4 Accountable Care Organizations (ACOs) o Accountable Care Organizations (ACOs) are being certified by CMS with over 165 announced Certifications for both Medicare and now Medicaid Share Savings Plans o Groups of providers who assume responsibility for meeting quality and cost goals for an assigned patient population 5 Patient centered medical homes o A system that hinges on each patient having close contact with a primary care clinician for continuing care o The primary clinician takes the lead when referring a patient to specialists o Patient centered medical homes represent a promising approach to delivering high quality, cost effective care, especially for people with a chronic health condition 6 2

3 Payer focus on high-needs complex consumers with preference for coordinated care across medical and behavioral Moving from paying for volume of services to paying for value/quality of services 7 Services provided - Service array, duration and intensity of services through Level of Care/Benefit Design Criteria and/or EBPs Cost of services - Provided based on current service delivery processes by CPT/E&M or other code and staff type Outcomes achieved - (i.e., how do we demonstrate that people are getting better ) Value is determined - Based on can you achieve the same or better outcomes with a change of services delivered or change in service process costs which makes the outcomes under the new clinical model a better value for the payer 8 Achieving the best outcomes at the lowest cost Move from a supply-driven health care system organized around what clinicians do and toward a consumer-centered system organized around what consumers need 9 3

4 Requires transformational change Revenue is misaligned with the interest of consumers when revenue and profit depends on increasing the service volume, not delivering quality outcomes Improving outcomes that matter to consumers in a cost effective way will result in progress 10 Can you promise anything that will lead to savings for the payer? Can you promise anything that will lead to improved outcomes? What is the effect of the services that you provide? How do you know that you get that effect? Can you state your value in a few simple sentences? 11 Aligning how we pay for services with the outcomes we are attempting to achieve better health, better care and better costs Services must be effective in achieving individual outcomes or system-wide outcomes The services are more cost-effective than alternatives that may have been selected The services are lean, waste (excess costs) have been removed through process improvement activities 12 4

5 With hospitals moving toward a value-based payment system there is more demand now than ever for strategies that will help healthcare systems hone in on population health. The Triple Aim, an initiative set forth by the Institute for Healthcare Improvement, covers three main checkpoints for all hospitals as they make this transition Population Health Focus Experience of Care Lower Per Capita Cost Source: Stiefel M, Nolan K. A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost. IHI Innovation Series white paper. Cambridge, Massachusetts: Institute for Healthcare Improvement; (Available on 13 The success of achieving the Triple Aim relies on a few steps: Identifying target (or at-risk) populations Find out and define what your system s aims and measures will be Develop a project that will show your progress and evidence to support system-wide change Scale up testing for populations look at the community you serve first, those are your potential patients: by understanding their socioeconomic and health state at a population level, you ll better predict their needs Source: A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost Stiefel M, Nolan K. A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost. IHI Innovation Series white paper. Cambridge, Massachusetts: Institute for Healthcare Improvement; (Available on 14 Payment for specified care coordination services to specific types of providers Example: Medical homes - medical home receives a monthly payment in exchange for the delivery of care coordination services not otherwise provided Payment for support services not traditionally covered under a fee-for-service model, and therefore would not be provided Potential benefits Enhanced patient physician communication Enhanced family involvement Improved flexibility for where care can be provided Reduction of unnecessary/inefficient care 15 5

6 To align incentives between health care payers and providers to better coordinate care, enhance prevention and disease management, reduce avoidable utilization and total costs, and improve health outcomes 16 What are your thoughts on paying for value? How do you define service value? What are the characteristics of a provider that delivers value? Has anyone incentivized the delivery of service value? How did you know you were getting what you wanted to pay for? 17 Mike Forrester, Ph.D. Chief Clinical Officer Partners Behavioral Health Management 18 6

7 The BIG Question- Accountability In Healthcare? 19 MCOs manage the financial risk MCOs manage the provider network MCOs manage clinical care MCOs ensure quality measures are achieved MCOs can use innovative reimbursement models to create incentives to strengthen clinical strategies and improve outcomes 20 Among leading strategies to reform health care is the development and implementation of new payment models The goal of these models is to change the way physicians, hospitals, and other providers are paid in order to emphasize quality care at lower costs 21 7

8 Level of Financial Risk Low Moderate High Fee for Service Provider less engaged Performance Based Contract Bundled & Episodic Payment Shared Savings s Level of Accountability Provider engaged Provider actively engaged Capita -tion Capitation AND Performance Based Contracting Provider fully accountable 22 Payment reform is moving from paying for volume to paying for value/quality VBP requires integration of our clinical, quality and financial information and the ability to track and analyze costs by consumer, provider, team, program, and payor and can operate effectively under fee for service, case rate, and sub-capitation payment models in order to succeed under a variety of pay for performance (P4) bonus arrangements 23 Standard payment Methodologies Fee-For-Service Pay-For-Performance Bundled Payments Case Rates Shared Savings Shared Risk Comprehensive Cost of Care Payment Traditional Capitation Global Payments 24 8

9 Fee-For -Service is the most common way of paying for healthcare services today A predetermined amount is paid for each discrete service provided The provider is at risk for the number and cost of processes within each service, but there is no limit on the number of services Providers receive payment regardless of outcomes 25 The Fee-For-Service reimbursement model makes it very difficult to achieve outcomes such as: Reductions in readmissions Inappropriate use of emergency room care Reduced hospitalizations Reduced residential Other high cost services WHY? Let s Discuss 26 Advantages/Incentives MCO o The primary reimbursement methodology preferred by CMS o Provider claims serve as encounter data o Claims payment process validates validity of claims by a predefined adjudication methodology o Supports accountability for enrollee care Provider o Incentive for provider to provide as much billable service as possible o Incentive to maintain high productivity rates o Allows for a wide rate of providers to participate in the system (Large comprehensive and small specialty providers may provide services under the plan) o Allows for more diverse place of service o Allows for greater geographical coverage (rural vs. urban) 27 9

10 Disadvantages MCO o Offers little or no incentive to deliver efficient care or prevent unnecessary care o Must rely on utilization management tools to control service costs o Most services are based on face to face visits, and may not include carecoordination and management of conditions by other contact methods o As payments are limited to one provider for one interaction, fee for service does little to encourage management of care across settings and among multiple providers o Limited to the scope of services offered by a particular agency or independent practitioner Provider o Payment lags service o Cost of processing claims, including the losses related to denied claims o Losses of flexibility in providing services do to limitations on multiple services on the same day o Pressure to maintain high productivity, may lead to practitioner burn out 28 Why should a payer pay me more? In trying to answer this question, stay away from any answer that pertains to the effort that you put forth For example, every provider that provides XYZ services in one community all reports that they are treating the most severely ill people that can t be true Is your healthcare organization built for high volume and serious illness? If not, What do you do? 29 Provider reimbursement, including financial incentives, based on achieving defined and measurable goals related to care processes, and outcomes Offers potential to improve quality of care, encourage collaboration, and enhance efficiency of care Limitations include single condition focused measures that do not reflect the complexity of caring for patients with complex cases May incentivize physicians to avoid high risk patients 30 10

11 Follow up after an inpatient admission Seeing referred consumers on the same day they are referred Following certain evidence based practices Clinically integrated treat to target /episode of care brief therapy model An internal functioning utilization plan to monitor the level of services being provided in line with the level of care benefit design and criteria Satisfaction surveys from members 31 Single payments for a group of services related to a treatment or condition that may involve multiple providers across varied settings Potential to improve coordination across multiple caregivers, provides flexibility in provision of care, incentivizes effective management of episodes Limitations include the difficulty in defining an episode, potential barriers to choice of provider and lack of incentive to reduce unnecessary episodes 32 MCO pays provider for a variety of related services that occur during an episode of care rather than separate payment for each service type This approach is designed to encourage providers to provide better coordinated and more efficient care and to eliminate care that is not truly needed 33 11

12 On the behavioral health side, this could include paying for facility/hospital not only for the inpatient care but also post discharge service following the discharge from the hospital Ideally, this could be at a flat fee for every inpatient stay 34 It might also be a bundled payment for providing 6 months of community-based recovery-oriented services for an adult mental health consumer who requires LOCUS Level 3 services The provider would need would need to work with this consumer to develop a recovery oriented professional care plan, a self-care plan and identify a few clinical and personal goals for the consumer The provider would also need to measure progress using a validated tool and get high marks on a customer survey 35 Case rates provide much greater flexibility to the provider and the consumer, and it allows them to be more agile about what is needed at any point in time Case rates assist the provider when compared with fee for service through the reduction in administrative costs This is especially the case as the provider continues to hone the service and deliver it at a lower cost 36 12

13 Shared savings is a payment strategy that works in combination with other payment strategies: Offers an incentive for the provider to reduce health care spending below the negotiated rate, allowing the provider to share in any of the savings MCO withholds AT-RISK funding Provider bears no responsibility for costs that occur above the rate A common first step approach toward full-risk payments Common 50/50 split 37 Shared Risk is a payment strategy that in combination with other strategies offers an incentive for the provider to reduce health care spending below the offered rate by putting the provider at-risk for some of the loss if costs exceed the rate: Shared risk may allow the MCO to pay providers in advance for AT-RISK funds Provider must repay AT-RISK funds if MCO service cost exceeds MCO revenues Flexible arrangement Not as common as shared saving 38 Involves providing a single risk-adjusted payment for the full range of health care services needed by a specified group of people for a fixed period of time Example: Per Member Per Month Similar to capitation, however there are additional risk adjustment methodologies utilized, limits on risk exposure, and incorporation of quality measures Benefits include flexibility for providers in terms of care delivery, incentive for efficient care, and improved emphasis on maximizing health Limitations include decrease in patient choice of provider, at risk structure for involved entities, and geographic challenges for the provision of care 39 13

14 Capitation models are designed to control the number of episodes, as well as the cost of individual episodes Provider receives a single payment to cover all services needed by a patient during a set period of time regardless of the number of episodes Payment amount is the same no matter how sick or healthy Incentivizes providers to avoid those with chronic or costly conditions 40 Under this method, medical homes work with payers to complete a zero-based budgeting process that answers the following questions Based on the complexity and severity of my patient population, how may clinicians of what disciplines are needed to support a team-based care model, where the clinic becomes a health and wellness center for those without complex medical conditions, an emergency room and hospital prevention organization for my patients with complex and multiple comorbid conditions? 41 What infrastructure is needed (technology, facilities, support staff, etc.) to support these high performing teams? What is the price tag for creating this clinic and how does it translate into a per-patient per-month (PPPM) rate? What is a standardized PPPM rate for all clinics that can then be risk adjusted for the severity and complexity of the patients within a given medical home? 42 14

15 What are the key performance indicators that will support identification that the services being delivered are lean? What are the performance metrics that need to be in place to measure whether the clinic is meeting the stated aims and is providing lean services? Note: This budgeting exercise is for medical home costs only. Risk for inpatient and specialty care may or may not be built into the formula 43 Based on the budgeting process Global payment is a monthly payment to each clinic based on the number of patients enrolled times the PPPM rate Global payments may include a shared savings layer that provides a bonus to the clinics if total healthcare expenditures are reduced more than extra money paid to the medical home (reduction of inpatient, ED and specialty care) 44 Niels Eskelsen, CPA, MBA Chief Business Officer Partners Behavioral Health Management 45 15

16 What would a provider need to do to be able to participate one of these types of reimbursement plans? How do you see yourself moving forward with these payment options on the horizon? 46 CMS requirements Business intelligence or data requirements Need for annual evaluation Case or bundled rate discussion Wrap up 47 The reimbursement plan must be consistent with the Social Security Act and other federal statutes and regulations The MCO must assure that payments are consistent with: o Efficiency o Economy o Quality of Care 48 16

17 The MCO must assure that payments are consistent with: o Efficiency The change in method must promote the efficient use of funding in providing service delivery or administrative support o Economy Budget Neutrality An alternative payment methodology cannot cost more in the aggregate than using a Fee-for-Service Model In order to validate budget neutrality, the MCO must provide equivalent encounter data, such as shadow claims o Quality of Care There is no reduction in the Quality of Care are evidenced by meeting predetermined quality measures. Quality measures should be both process and outcomes based, with a preference for the latter 49 Any alternative reimbursement methodology cannot be a basis for denying or delaying medical necessary services to Medicaid enrollees or alter the clinical coverage policy of state plan services The amount must be sufficient to enlist enough providers so that care and services are available under the state Medicaid plan at least to the extent that such care and services are available to the general population in the geographic area See 42CFR430 and 42 CFR Do you know the costs of the services provided? Do you know the time needed to move someone from first call to initial treatment? Do you produce outcomes that you can show in data for the following: o Engagement in treatment o Readmission rates o Hospitalization rates o Symptom reduction through objective tool measurement 51 17

18 What is the purpose of developing an alternative payment method. o What values are we trying to achieve? o What outcomes are we trying to achieve? o What service gaps are we trying to fill? o How will we know if this strategy works or not? Which method are we considering using? o Why do we think that changing the payment method will achieve the desired results? What service or services are included in the new rate? 52 Implementation Strategies o What strategy are you going to use to implement a new payment method? o How will a new method affect providers? Reporting issues o How will a new method affect consumers and access to care? o How will a new payment methodology be explained to stakeholders? What are the upside and downside considerations? How are you going to manage downside risk to all stakeholders? 53 What is the population that is going to covered? o What is the population demographic? Age Medicaid Category of Aid Diagnosis Geographic configuration o What are the historical services by the provider network What are the types of services provided? How many units of services were delivered? o What is the amount of service historically received, looking at individuals? How much service was provided to each enrollee? What are the service utilization trends? 54 18

19 Alternative reimbursement methods usually do not mean reduced administrative cost Case, bundled, or episodic population-based rates require providers to have the capacity to provide all covered services If a case rate is stratified, it does not limit the amount of medically necessary services of a covered consumer Providers must be able to manage their cost in the aggregate Do providers have the vision and leadership and will to change how they provide services that is consistent with the new reimbursement methodology? Predetermined monitoring tools must be implemented 55 Key Questions o o o o o Do you have enough encounter data to determine if the alternative methodology is budget neutral? What is the summary of service utilization and cost? How has the new method impacted the identification and delivery of clinical care? Anecdotal information will not support continued capitation funding and will probably affect your rate What revisions should be made in the coming review period? 56 How would we set an Alternative Reimbursement for ACTT? o What are we trying to achieve? How are we reimbursing providers now? Why do we want to change the reimbursement method? o What data would we need? o What will we require the provider to do? o How will we implement the change? o How will we monitor? 57 19

20 How would we develop a case rate for all community based services? o What are we trying to achieve? How are we reimbursing providers now? Why do we want to change the reimbursement method? o What data would we need? o What will we require the provider to do? o How will we implement the change? o How will we monitor? 58 MST Utilization -Medicaid Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Unique consumers Medicaid New auths - Medicaid Linear (New auths - Medicaid) 59 H MULTI- Distinct SYSTEMIC Client THERAPY (MST) Count Amount Expensed Average Cost per Units per Unique Client Client Units Expensed PMPM Grand Total 136 $1,349, $ 9, ,904 $ Is MST a candidate for a case rate? 2. How would you determine what the rate should be? Alternative Payment Methods 60 20

21 Psychiatric Inpatient Distinct Client Count Amount Expensed Average Units Cost per per Unique Client Client Units Expensed PMPM 1,467 $4,635, $ 3, ,389 $ What if we offered a case rate based on 5 days per episode, what do you think would happen? 2. What do you think would happen to Admissions? 3. What do you think would be the initial savings? Alternative Payment Methods 61 Alternative Reimbursement Methodologies are just one tool for managing risk The risks of adopting an alternative reimbursement methodology must be understood by the MCO and the Provider Monitoring tools must be predetermined and part of the implementation process A formal evaluation process is an important element of the plan 62 Last chance to ask that embarrassing question! 63 21

22 Good Luck! 64 22

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