HFMA Texas State Conference 2015

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1 HFMA Texas State Conference 2015 ACO Planning and Development in the Midst of Market Chaos March 30, 2015 Agenda I. Northern Arizona Healthcare (NAH) II. Market Activity III. ACO Development IV. Organization and Governance V. Clinical Leadership VI. Network Development VII. Finance VIII. PHITA IX. PathfinderHealth Current State 1 1

2 I. Northern Arizona Healthcare Who Are We? Largest healthcare organization in Northern and Central Arizona $535 million in total revenue 3,000 employees and 300 physicians: active medical staff Employment via NAH Provider Group 167,000 patient visits per year Two hospitals: Flagstaff Medical Center (FMC) (Flagstaff, Arizona) Verde Valley Medical Center (VVMC) (Cottonwood and Sedona, Arizona) Level I trauma center Pediatric ICU Northern Arizona Hospice Heart & Vascular Center of Northern Arizona Cancer Centers of NAH Air transport services 2 II. Market Activity What the Physicians Told Us Primary Care Physicians The primary care physicians (PCPs) felt underappreciated in the market. They earned substantially less than the specialists, yet PCP s controlled the patients. Specialists were earning two to three times more than the PCPs. Some independent PCPs felt they could not compete with NAH: Would be employed unless they did something to improve their market stature Sought out organizations external to the market Specialists They recognized the earnings difference between specialists and PCPs. The specialists believed strongly that a local solution was preferable to an outside organization. Their reaction to competition was a request for NAH to form an ACO. They drove the organizational development of the ACO and the outreach to the PCPs. The specialists ensured that the ACO development process would be transparent and inclusive. 3 2

3 II. Market Activity Commonwealth and Atlantis Disgruntled PCPs invited two organizations from Phoenix into the Flagstaff market, creating market disruption. NAH responded with developing a physicianled ACO to unite the physicians and keep care and control local. Commonwealth Primary Care ACO 93 affiliated physicians: all primary care. Phoenix-based external competition enters Flagstaff, Arizona. The ACO is an MSSP program participant. Collaborative Accountable Care Initiative with Cigna: January 1, Partnership with UnitedHealthcare: January 1, Signs up Flagstaff PCPs for participation in the MSSP. Atlantis Health Group 1 Describes itself as stand-alone enterprise with a network of providers. Offered to buy physician ancillary business. PCPs to refer to Atlantis-owned physicians and outpatient centers. Contractually guaranteed $125,000 for each full-time PCP Presentation: Atlantis Health Group Changing the Game through Vision, Strategy & Implementation. 4 III. ACO Development ACO End-State Goal Ultimately, the goal of an ACO is a clinically integrated network (CIN) of providers. Independent Providers Independent Providers Home Health SNF Pharmacy Other Employed Physicians Fragmented Delivery System Requirements Aligned provider management/governance Clinical protocols Disease management Wellness programs Integrated EHR Performance measurement reporting Predictive analytics lti Disease registry Joint payor contracting Funds flow design Aligned incentives Clinically Integrated Network Employed Physicians Home Health SNF Pharmacy Other Hospital Hospital 5 3

4 III. ACO Development ACO Steering Committee Overview It was important that the ACO Steering Committee represented the broad interests of the physician community, including PCPs, specialists, and employed and independent physicians. Provider and NAH ACO Development: ACO Steering Committee Name Specialty/Title Appointed By NAH Employed? Organization or Group Name Badger, William, M.D. Urology Community No Flagstaff Surgical Associates Feuquay, Kathryn, M.D. Family Medicine NAH: FMC Yes Team Health Primary Care Flint, John, M.D. Sports Medicine Community No Flagstaff Bone and Joint Gottschalk, Amy, M.D. Anesthesiology NAH: VVMC Yes VVMC Hanson, Paul, M.D. Internal Medicine NAH: VVMC No Cottonwood Internal Medicine Lewis, Steven, M.D., FCCP NAH Senior VP of PHM NAH Yes NAH Mogk, Neal, M.D. Family Medicine Community No Beaver Street Family Practice Overhiser, Andrew, M.D. Gastroenterology Community No Northern Arizona Gastroenterology Papez, Michael, M.D. Pathology Community No Pathology Associates of No. Ariz. Richter, Anne, M.D. Emergency Medicine Community No Flagstaff Emergency Physicians Wise, Matt, M.D. Family Medicine NAH: FMC No Flagstaff Family Care Clinic ECG Charlie Brown, Senior Manager Emma Mandell, Manager Ken Steele, Senior Manager Jim Ryan, Senior Consultant 6 III. ACO Development ACO Steering Committee Overview (continued) The ACO Steering Committee led the ACO development and was autonomous from NAH (except for NAH s reserved powers). Roles and Responsibilities of the ACO Steering Committee A proposed formal ACO Steering Committee Charter has been developed, defining roles and responsibilities of members, including, but not limited to, the following: Strategic and clinical planning Communication plans Facilitation of NAH/physician alignment Promotion of participation in the ACO and compliance with the ACO s vision Clinical programs design Funds flow and payment models Coordination of clinical strategy IT 7 4

5 III. ACO Development ACO Steering Committee Objectives To accomplish the provider and NAH ACO project goals, a Steering Committee and supporting work groups were formed and charged with developing the provider and NAH ACO strategy. ACO Steering Committee Objectives Produce a statement of business purpose that clearly communicates the ACO s vision and direction. Determine the organizational approach and governance structure, including aligned incentives and accountability. Prioritize populations to manage and define the preferred contracting strategy. Approve and oversee the ACO s development plan. Direction and Feedback ACO Steering Committee Analysis and Recommendations ECG and Work Groups Regular communication and transparency with aligned stakeholders was essential to the project s success. 8 III. ACO Development ACO Opportunities and Challenges With the development of any ACO, there are certain opportunities and challenges that NAH and other participating organizations must consider. Opportunities Align financial interests. Improve quality. Respond to competition. Build a community-based delivery model. Challenges Agreeing on a acceptable model. Securing physician time commitment. Managing communication. Let s go! 9 5

6 III. ACO Development Provider and NAH ACO Development Structure The ACO development structure is as follows: The following committee structure ensured that the development of the ACO was physician-led and collaborative and progressed in a timely and successful manner: 1 PHITA = Population Health Information Technology and Analytics. 10 III. ACO Development Work Groups To support the work of the ACO Steering Committee, five work groups were created to drive components of the ACO development process. ACO Steering Committee Organization/Governance Clinical Leadership Network Development Finance PHITA Participants: COOs, administrative leaders Meeting schedule: biweekly Meeting length: 2 hours Responsibility: governance and management structure, ACO charter, geographic breadth of ACO, legal structure, and other legal considerations Participants: clinical leaders Meeting schedule: biweekly Meeting length: 2 hours Responsibility: care model development, CI, population health management (PHM) activities, medical management, care management, and performance monitoring Participants: contracting directors and administrative leaders Meeting schedule: biweekly Meeting length: 2 hours Responsibility: physician network composition, physician participation tiers and criteria, and prioritization of patient populations Participants: CFOs, VP of Finance, and contracting directors Meeting schedule: biweekly Meeting length: 2 hours Responsibility: financial impact of the ACO, funds flow, incentive distribution, and contracting strategy Participants: CIOs, IT directors, and CI leaders Meeting schedule: biweekly Meeting length: 2 hours Responsibility: integration of NAQHC (CI vehicle), IT governance structure, HIE, data warehouse, and Cerner PHM tools Each work group had a specific task plan and reported progress and recommendations to the ACO Steering Committee every 2 weeks. 11 6

7 IV. Organization and Governance The Organization and Governance Work Group worked to develop the necessary governance and management structure to support the ACO. Key Questions to Be Addressed What will the ACO s organizational and governance structure be? Will the ACO require the formation of a separate legal entity? How much of a governance role will independent physicians and facilities be given in the ACO? What is the composition and responsibilities of the governing body (e.g., setting policy, developing the ACO, setting and monitoring quality and performance goals, addressing deficiencies)? How does the ACO ensure accountability and compliance across all participating organizations and providers? What geographies and/or patient populations will be served by the ACO? 12 IV. Organization and Governance Vision The ACO Steering Committee finalized the vision statement as outlined below. PathfinderHealth Vision Improve Care Improve Outcomes Reduce Costs PathfinderHealth is a regional, clinically integrated care delivery system that empowers providers to enhance health while improving quality and lowering costs. 13 7

8 IV. Organization and Governance Guiding Principles Additionally, the ACO Steering Committee finalized the guiding principles. PathfinderHealth Guiding Principles Enhances patient- and family-centered care Facilitates clinical and financial alignment to ensure a sustainable delivery system Is physician-driven, with an emphasis on primary care and strengthening the provider community Aligns like-minded providers and facilities around a shared vision Partners with patients to enhance care through all stages of life Uses best practices and IT to improve care Provides timely access to appropriate care Rewards quality care The vision and guiding principles will help to provide direction to the work groups when developing certain components of PathfinderHealth. 14 IV. Organization and Governance Structural Considerations Defining the governance needs helped inform the recommended legal structure. Legal counsel provided support to the Governance Work Group. Ease and cost of creating the entity (division of NAH, wholly owned subsidiary, joint venture) Ability to expand to include other interested entities or network participants Legal and financial liability and protections Perception in the community, with payors and with other providers Ability to fund with capital Collaboration between otherwise competing organizations Determination of what powers/decision-making capabilities the participants will have Authority for single-signature contracting The Governance Work Group recommended a structure to the ACO Steering Committee that fits the ACO needs. 15 8

9 IV. Organization and Governance Who Is in NAQHC? (It Is a CIN!) NAQHC offers a robust network of over 200 primary care and specialty providers. Category Specialty Employment Status Total Primary Care Community Medicine Employed 7 Independent 27 Pediatrics Independent 12 Primary Care Total 46 Hospital-Based Anesthesiology Independent 17 providers Emergency Medicine Independent 25 Hospitalist Employed 25 These providers represent Palliative Care Employed 2 more than 30 Flagstaff Pathology Independent 3 Pediatrics Intensivists Employed 1 medical groups. Hospital-Based Total 73 OB/GYN OB/GYN Independent 1 Physicians in NAQHC will Obstetrics/Gynecology Independent 14 be eligible to participate in OB/GYN Total 15 Specialty Cardiovascular Disease Employed 10 the top tier of incentives CVT Surgery Employed 2 and other benefits e of ENT Independent 1 membership in the ACO. General Surgery Independent 9 Infectious Diseases Employed 1 Neurology Employed 2 Orthopedic Surgery Independent 19 Orthopedic Surgery Independent 17 Psychiatry Employed 4 Urology Independent 1 Specialty Total 66 Grand Total 201 NOTE: As of February 10, IV. Organization and Governance NAQHC and the ACO: Key Functions The CI Support Task Force was responsible for coordinating ACO development with NAQHC s efforts to create a CIN. Key ACO Functions That Could Be Performed by NAQHC (in Flagstaff) Provide an organization for physicians to join to gain access to group purchasing discounts. Serve as the ACO s physician network due to its ability to negotiate on behalf of physicians. Administer the physicians share of the incentives or surpluses earned by the ACO. Help to coordinate the implementation of PHM tools to support member physicians. Collect and report data in order to: Ensure that quality, utilization, and patient satisfaction incentives are met. Share with physicians to drive performance improvement. Support PHM. 17 9

10 IV. Organization and Governance Organization and Governance: Recommended Board Structure GUIDING PRINCIPLE: The ACO will be physician-driven, with an emphasis on primary care and strengthening the provider community. Board of Managers Composition Category Criterion Seats Voting? Comment Equity Member 2 Yes Initially NAH is sole member. Physicians PCP Specialist At large Nonvoting Executive director Other (?) Yes No more than 1/3 are employed or exclusively contracted by the health system. 1 No To be determined based on advisory support needs. Total: Voting 14 Total: Combined 15 Can expand if needed. A Nominating Committee was convened by the ACO Steering Committee to recommend a slate of managers. 18 V. Clinical Leadership What Shall We Measure and Improve? The Clinical Leadership Work Group worked to develop the necessary care model, leveraging current NAQHC (CI) and PHM activities, to support the ACO. Key Questions to Be Addressed What existing PHM initiatives within NAH will be able to serve the ACO? What PHM capabilities will need to be developed? How will the ACO ensure a clinically integrated delivery system? How will the ACO gain agreement among providers for approaches to care model policies and procedures, ensuring some degree of consistency and standardization? Is there an opportunity for a hybrid approach to executing the care model, allowing for regional variation and central standardization? What are the clinical priority areas of focus and subsequent clinical and quality measures? 19 10

11 V. Clinical Leadership Employee Health Plan Opportunities The Clinical Leadership Work Group reviewed employee health plan (EHP) data provided from the Crimson Population Risk Management program. Action Plan The work group reviewed top savings opportunities and top chronic conditions. According to the data, PathfinderHealth should focus on medication management and diabetes management. Additional opportunity for improvement was identified for high-risk patients (i.e., the top 1%). Participants will work to further define clinical focus areas and support PHM initiatives and clinical pathways. 20 V. Clinical Leadership EHP Data Overview The Clinical Leadership Work Group identified the following opportunities for improvement: Overview of EHP Population Cost, Quality, and Care Improvement Opportunities Measure Actual Target Opportunity Generic Utilization $4.3 Million $3.1 Million $1,200,000 Diabetes Without CAD $1.9 Million $1.1 Million 795,300 Opportunity $1,995,300 High-Risk Member (Top 1%) Profile 21 11

12 VI. Network Development The Network Development Work Group developed a comprehensive physician network that is aligned with the vision and guiding principles of the ACO. Key Questions to Be Addressed What geographies and/or patient populations will be served by the ACO? What number of providers, by specialty, will be needed to care for the population served by the ACO? What will be the ACO physician network participation criteria? Will some physician providers be excluded from the outset due to cost and quality concerns? Or will all physician providers be able to join the ACO initially, with some providers removed over time based on performance criteria? What will be the tiers of network participation, and what will be the rights, responsibilities, and reimbursement mechanisms for each tier? How should the nonphysician provider network be developed? What is our view on physician-owned outpatient centers being in the ACO? 22 VI. Network Development Three-Tiered Provider Framework The three-tiered provider framework allows for multiple levels of ACO participation, with a different set of rights and responsibilities for each tier. Contractors Medical management participation Fee-for-service contracts Examples: Skilled nursing facility Home health agencies Tertiary centers Affiliates Medical management participation Shared savings and risk-based contract participation at no more more than 50% of Founder-level incentives Founders Medical management participation Shared savings and riskbased contracts NAH, NAQHC, and independent FMC and VVMC physicians who meet criteria Ancillary providers with greater than 50% ownership by Founders Clinical Integration Level of Commitment and Participation 22 12

13 VI. Network Development Participation Model Northern Arizona Healthcare All Equity Class inpatient facilities will participate as a Tier 1 provider. All outpatient facilities will be evaluated using approved criteria as will be applied to non-nah facilities. NAQHC (or Market-Equivalent CIN) Physicians All physician members will be in the Physician Class and participate as Tier 1 providers. Non-NAQHC PathfinderHealth Participating Physicians (Including VVMC Employed and Independent) To be in the Physician Class, must participate in a market-equivalent CIN within a specified time frame. Non-NAH Facilities and Non-PathfinderHealth Providers (Ambulatory Surgery Centers, Laboratories, Imaging Centers, DME, etc.). Non-NAH outpatient facilities will be evaluated using the same criteria as NAH outpatient facilities. Preferred providers selected based on ancillary provider scorecard criteria. 24 VI. Network Development Proposed Scorecard Based on the need to have agreed-upon criteria, the Network Development Work Group proposed the following scorecard for approval by the ACO Steering Committee: Recommendation Criterion Description/Key Considerations Score 1 5 (5 Is Best) Quality Questions: What are the provider s outcomes? Does the provider have distinguishing certifications/accreditations? What is the provider s reputation in the community? Are patients satisfied with the provider? Example: DME: Provide specialty equipment as required by PathfinderHealth. Timely Access to Services Questions: Is it quick and easy to access the provider s services? Are there limited or no administrative burdens on PathfinderHealth? Examples: Meet timeline for referral response. Accept weekend admissions. Network Need Is this provider used frequently by ACO members? Is this provider based in PathfinderHealth s service area? Does this provider contribute to PathfinderHealth in other ways? 25 13

14 VII. Finance The Finance Work Group worked to develop a financial model that is appropriately aligned with the provider and NAH ACO clinical model, ensuring appropriate funds, the distribution of incentives, and contracting strategies are in place. Key Questions to Be Addressed What will be the financial impact of the ACO for PCPs, specialists, hospitals, and other participants? What will be the formula for distributing care management fees and/or shared savings? Which organizations will distribute funds throughout the ACO? How will the ACO budget be created and managed? What will be the ACO s contracting strategy (single-signature contracts, downside risk, patient attribution methodologies, etc.)? 26 VII. Finance Flow Approach: EHP Arrangement Splits The work group finalized its recommended splits for the EHP arrangement. Shared Savings Pool Payor Share 30% ACO Share 70% Care Management Hospital Share Physician Share Participation Fees 30% 70% The work group approved a $6 PMPM. The care management participation fees would be subtracted from the PCP Share Specialist Share shared savings pool total, prior to 70% 30% any distribution

15 VII. Finance Proposed Timeline The work group recommended pursuing implementation of ACO contracts with all of the payors below by January 1, Reality: No new products until Implementation: August 1, 2014 EHP care management participation fee and shared savings arrangement Implementation: January 1, 2015 BCBS of Arizona MSSP Medicare Advantage (MA) Other commercial payors AHCCCS January 1, 2016 January 1, VIII. PHITA Population Health Information Technology and Analytics The PHITA Work Group worked to develop an IT infrastructure, leveraging the CI vehicle and implementation of an HIE and Cerner population health tools, to support the care model of the provider and NAH ACO. Key Questions to Be Addressed What will be the role of NAQHC (the CI vehicle) in the ACO? What is the status of data collection among ACO providers? What are the IT needs of the ACO? Who will make IT governance decisions for the ACO (what data is needed, what reports will be made available, how will the reports be formatted, etc.)? How can the ACO rollout be synchronized with NAH s rollout of the Cerner suite of PHM tools? 29 15

16 VIII. PHITA Multiple Work Groups There were four subgroups within the PHITA Work Group. PHITA Work Group Data Management and Analytics (Active) Community Ambulatory EHR (Active) Clinical Exchange Committee Care Management IT Group Subcommittee activities included Cerner PHM planning, data management and analytics, patient portal, secure messaging pilot, and website build. 30 IX. PathfinderHealth Current State Great Progress Has Been Made! Physician members: PCPs: 25 employed and 50 independent 239 specialists: 99 employed and 140 independent EHP: Managed by PathfinderHealth Paid $62,000 in Q1 to PCPs for care coordination $25 co-pay Tier 1 for PathfinderHealth physician vs. $55 Tier 2 MSSP: PathfinderHealth partnership with YRMC North Central Arizona ACO for MSSP CI vehicle: PathfinderHealth merger with NAQHC (Cl) GPO: offered to physicians Care process models: launch of six evidence-based treatment plans for orthopedics NAH Board: formation of a subcommittee on population health Next steps: MA Plan in 2017? New commercial product in

17 Ken Steele Senior Manager ECG Management Consultants Steven Lewis, M.D., FCCP Senior VP of Population Health Northern Arizona Healthcare

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