Paying Through the Nose: New Payment Models for Physician Reimbursement March 16, AAO-HNS Leadership Forum Arlington, Virginia.
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- Rosalind Lamb
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From this document you will learn the answers to the following questions:
What is the best way to pay for Medicare?
What type of entity is Medicare ACO?
What quality of care does ACO provide?
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1 Paying Through the Nose: New Payment Models for Physician Reimbursement March 16, 2015 AAO-HNS Leadership Forum Arlington, Virginia Kristin Carter Principal Ober Kaler Christopher Dean Principal Ober Kaler
2 Today s Discussion Changing payment landscape Shift from volume to value Alternative payment models ACOs Value-based purchasing Bundled payments Patient-Centered Medical Homes
3 Health Care Market Tension Politics: Left vs. right Who is covered? What is covered? What cost? Zero sum game? Payor vs. provider Quality & cost Independent judgment & patient choice
4 Physician Market Tensions Fragmented market Specialty v. primary care Emergency medicine vs. radiology vs. pathology vs. specialist vs. anesthesia vs. hospitalist vs. primary care Primary care vs. specialist vs. anesthesia Geography-driven Less consolidation
5 Size of the Market U.S. Health Care - $2.9 trillion Medicare Expenditures In $4.9 billion In $224.4 billion In $499.7 billion In $525.0 billion In $585.7 billion Source: National Health Expenditure Accounts
6 Medicare Expenditures by Group Hospitals $220.3 billion in 2009 $242.7 billion in 2013 Physicians $109.4 billion in 2009 $130.3 billion in /5 of Medicare $ to hospitals and physicians
7 Medicare: Pay for Quality and Value? 85% of Medicare payments in % of Medicare payments in % through alternative payment models by 2016 ACO BPCI Value based purchasing
8 Reimbursement Methodology Good habit today Better reimbursement Future bad habit Less reimbursement EHR Incentive Physician Quality Reporting System
9 Alternative Models Bundled care Accountable Care Organizations (ACOs) Bundled Payments for Care Improvement (BPCI) Shifting risk and cost From carrier / insurer To hospital / provider / physician level
10 Medicare ACOs: Basics of the Program Legal entities under state law main purpose includes: Receiving and distributing Medicare shared savings Repaying shared losses or other monies owed to CMS Establishing, reporting and ensuring provider compliance with health care quality criteria ACO Participants work together to manage and coordinate care for Medicare beneficiaries Triple Aim: better care for individuals, better health for populations, and lower growth in expenditures
11 Trajectory of Medicare ACO Program April 2012 October 2012 January 2013 January 2014 January 2015 CMS Innovation Center 27 ACOs 106 ACOs 250+ ACOs 366 ACOs 405 ACOs 32 ACOs in Pioneer ACO model when it began, 19 remain
12 What is an ACO? Eligible participants 5,000 Beneficiaries TIN Legal entity Shared savings/losses Quality measures
13 Pros and Cons of ACOs Pros Opportunity to increase Medicare reimbursement if targets met May provide a vehicle for negotiating with private payers Fraud and abuse waiver
14 Pros and Cons of ACOs Cons Becoming an ACO is a large and complicated undertaking Primary care focused-would require enlisting primary care physicians with at least 5,000 covered lives as well as acute care hospitals Expensive to establish
15 Pros and Cons of ACOs Cons No guarantee that savings benchmarks would be achieved Most of any savings would likely have to be shared with the PCPs and acute care hospitals The fraud and abuse waiver is not unlimited
16 ACO Performance Mixed Results (Year 1 MSSP) Net Savings$383 million ½ of participants reduced spending ¼ of participants received shared savings One ACO in Track 2 overspent target by $10 million, and owed shared losses of $4 million (Source: CMS, Medicare ACOs continue to succeed in improving care, lowering cost growth (Nov. 2014))
17 Bundled Payments for Care Improvement Medicare pays for a bundle of care based on pre-identified DRGs Acute care and post-acute care redesign = $$ savings or risk? Share savings or risk with physicians Administrative requirements Does it work? - Too early to tell
18 Alternative Payment Models Patient-Centered Medical Homes (PCMH) Care coordination through patient s primary care physician Medicare Reimbursement Transitional Care Management (TCM) Chronic Care Management (CCM)
19 Value Based Payment Model Do you report PQRS? No: 2-4% decrease How large is your group? 10 or more 1-9 physicians Quality Cost
20 Over the Horizon. but not too far Health Care Transformation Task Force Private payors and health care systems 75% of all payments tied to value in 2020 Health Care Payment and Learning Action Network (HCPLAN?) CMS-led Payors, Medicaid, employers
21 Over the Horizon. but not too far Old language Budget neutrality SGR "New language" Category neutrality Quality value based modifier Alternative payment ACO, BPCI Population based model Fee for service category less attention
22 Takeaways? Data and quality are key Larger groups = bigger Medicare impact Early adopters - mixed results Currently voluntary, but movement toward value across system Federal and private payors may work together Patients will still need physicians Medicare will still need physicians
23 Innovative Programs
24 Questions Kristin Carter Ober Kaler Christopher Dean Ober Kaler
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