Crowe Healthcare Webinar Series

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1 New Payment Models Crowe Healthcare Webinar Series Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP

2 Agenda Bundled Care for Payment Improvements Payment Models Accountable Care Organizations Shared Savings Programs Advance Payments ACO Model Pioneer ACO Model Patient Center Medical Home Federal Qualified Health Center Demonstration Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 2

3 Bundle Payments for Care Improvement (BPCI) Goal is to align incentives for providers Hospitals Post-acute care providers Physicians and other practitioners Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 3

4 Bundle Payments for Care Improvement Developed by CMS Innovation Center January 31, 2013 health care organizations selected Payments based on financial and performance accountability for episodes of care Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 4

5 Bundle Payments for Care Improvement Model 1 - Retrospective acute care hospital stay only Model 2 - Retrospective acute & post acute care episode Model 3 - Retrospective post acute care only Model 4 - Prospective acute care hospital stay only Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 5

6 Bundle Payments for Care Improvement Model 1 Retrospective Acute Care Hospital Stay Episode of care = inpatient stay in the acute care hospital Medicare pays hospital a discounted Inpatient Prospective Payment System amount Physicians paid separately Gain sharing allowed Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 6

7 Bundle Payments for Care Improvement Model 1 Retrospective Acute Care Hospital Stay 16 Participants Click anywhere on the Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 7

8 Bundle Payments for Care Improvement Model 2 Retrospective Acute & Post Acute Care Episodes Episode of care = inpatient stay in the acute care hospital and all related services Covers up to 48 different clinical condition episodes Medicare makes fee-for-service (FFS) payments Total payment for an episode is reconciled against a bundled payment amount predetermined by CMS 3 day hospital stay requirement waived Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 8

9 Bundle Payments for Care Improvement Model 2 Retrospective Acute & Post Acute Care Episodes 2,150 Participants Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 9

10 Bundle Payments for Care Improvement Model 3 Retrospective Post Acute Care Triggered by an acute care hospital stay Begins with post-acute care services Post-acute care services must begin within 30 days of discharge Covers up to 48 different clinical condition episodes Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 10

11 Bundle Payments for Care Improvement Model 3 Retrospective Post Acute Care 4,617 Participants Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 11

12 Bundle Payments for Care Improvement Model 4 Prospective Acute Care Hospital Stay Single, prospectively determined bundled payment Physicians and other practitioners submit no-pay claims to Medicare and paid by the hospital out of the bundled payment Includes related readmissions for 30 days after discharge Covers up to 48 different clinical condition episodes Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 12

13 Bundle Payments for Care Improvement Model 4 Prospective Acute Care Hospital Stay 18 Participants Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 13

14 Polling Question # 1 Which payment model provides a bundle payment for hospital as well as post-acute care services? A. Model 1 B. Model 2 C. Model 3 D. Model 4 Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 14

15 Polling Question # 2 Which payment models are more preferred by providers? A. Model 1 and 3 B. Model 1 and 4 C. Model 2 and 4 D. Model 2 and 3 Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 15

16 Accountable Care Organization (ACO) Doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to Medicare patients Goals Right care delivered at the right time Avoid duplication of services Prevent medical errors. Shares in the savings it achieves with Medicare Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 16

17 Accountable Care Organization (ACO) ACO initiatives include: Medicare Shared Savings Program Advance Payment ACO Model Pioneers ACO Model Each will be discussed Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 17

18 ACO Requirements Establish a governing body Routine self-assessment, monitoring, and reporting of the care it delivers Use information to continually improve the care delivered to their Medicare beneficiaries Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 18

19 ACO Requirements An ACO must agree to: Accept responsibility for at least 5,000 Medicare Fee- For-Service beneficiaries to be eligible to participate in the Shared Savings Program Complete an application Participate in the Shared Savings Program for at least 3 years Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 19

20 ACO Regulations CMS plans for monitoring ACOs includes: Analyzing claims and specific financial and quality data Quarterly and annual aggregated reports Site visits Performing beneficiary surveys Audits (if necessary) CMS may terminate the agreement with an ACO for: Failure to comply with eligibility and program requirements Avoiding at-risk beneficiaries Failure to meet the quality performance standards CMS instructed to develop a benchmark for savings to be achieved Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 20

21 ACO Regulations Shared savings or losses depends on its quality performance Evidence-based medicine Beneficiary engagement Coordination of care Risks and Rewards Receive a share of the savings achieved (expenditures below its updated expenditure benchmark) Repay a portion of losses (expenditures above its updated benchmark) Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 21

22 ACO Provider Types ACO may include the following types of groups of providers and suppliers of Medicare-covered services: Physicians and professionals in group practice arrangements Networks of individual practices of physicians and other professionals Joint ventures/partnerships of hospitals and physicians and professionals Hospitals employing physicians and professionals Critical Access Hospitals (CAHs) that bill under Method II Other providers/suppliers may participate in an ACO but would not be used to directly assign patients Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 22

23 Shared Savings Program Section 3022 of the Affordable Care Act added a new section 1899 to the Social Security Act Encourage providers (e.g., physicians, hospitals, and others involved in patient care) to create a new type of health care entity ACO agrees to be held accountable for: Improving health and experience of care Reducing the rate of growth in health care spending Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 23

24 Shared Savings Program ACOs may choose to participate in one of two tracks: 1. Operate on a shared savings only arrangement 2. Share in savings and losses for the duration of the agreement, in return for a higher share of any savings it generates All ACOs who elect to continue in the program after the first agreement period must continue in the two-sided model Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 24

25 Advance Payment ACO Model Designed for physician-based and rural providers Receive upfront and monthly payments Smaller ACOs with less access to capital Designed to serve as a test Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 25

26 Advance Payment ACO Model Participating ACOs will receive three types of payments: An upfront, fixed payment An upfront, variable payment Monthly payment depending on the size of the ACO Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 26

27 Advance Payment ACO Model Recoupment of Advance Payments CMS will recoup Advance Payments through offset of an ACO s earned shared savings. CMS will offset shared savings in subsequent performance years and any future agreement periods, or pursue recoupment where appropriate. Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 27

28 Advance Payment ACO Model - Eligibility The Advance Payment ACO Model targets two types of organizations participating in the Shared Savings Program: 1. ACOs that do not include any inpatient facilities and have less than $50 million in total annual revenue 2. ACOs in which the only inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitals and have less than $80 million in total annual revenue. ACOs that are co-owned with a health plan are ineligible Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 28

29 Advance Payment ACO Model 35 Participants Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 29

30 Pioneer ACO Model Designed for organizations with experience offering coordinated, patient-centered care, and operating in ACO-like arrangements The first performance period began in January 1st, 2012 Shared savings determined through comparisons against an ACO s benchmark Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 30

31 Pioneer ACO Model Pioneer ACOs achieving savings over the first two years are eligible to move to a population-based payment model Population-based payment is a per-beneficiary, per month payment amount CMS established two alternatives to the core payment arrangement to allow ACOs more flexibility in the speed at which they assume financial risk Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 31

32 Pioneer ACO Model Pioneer ACOs must attest that at least 50% of the ACO s primary care providers have met meaningful use requirements To be eligible to participate in the Pioneer ACO Model, organizations are required to be providers or suppliers of services structured as: ACO professionals in group practice arrangements; Networks of individual practices of ACO professionals; Partnerships or joint venture arrangements between hospitals and ACO professionals; Hospitals employing ACO professionals; or Federally Qualified Health Centers (FQHC) Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 32

33 Pioneer ACO Model vs. Shared Savings Program The Shared Savings Program fulfills a statutory obligation set forth by the Affordable Care Act Pioneer ACO Model is designed to test the effectiveness of a particular model of payment The first two years of the Pioneer ACO Model are a shared savings payment arrangement In year three, Pioneer ACOs that have earned savings over the first two years will be eligible to move to a population-based payment arrangement Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 33

34 Pioneer ACO Model 32 Participants Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 34

35 Polling Question # 3 ACO that choose to continue the shared savings program after the first agreement can choose to operate on a shared savings only arrangement? A. True B. False Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 35

36 Polling Question # 4 ACO participating in the advance payment model will receive 3 types of payments; Upfront fixed payment Upfront variable payment A monthly payment of varying amount A. True B. False Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 36

37 Patient-Centered Medical Home Introduced by American Academy of Pediatrics (AAP) in 1967 The medical home concept was expanded in 2002 to include: Accessible Continuous Comprehensive Family-centered Coordinated Compassionate Culturally sensitive care Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 37

38 Patient-Centered Medical Home Joint Principles of Primary Care A personal physician who coordinates all care for patients and leads the team. Physician-directed medical practice a coordinated team of professionals who work together to care for patients. Whole person orientation this approach is key to providing comprehensive care. Coordinated care that incorporates all components of the complex health care system. Quality and safety medical practices voluntarily engage in quality improvement activities to ensure patient safety is always being met. Enhanced access to care such as through open-access scheduling and communication mechanisms. Payment a system of reimbursement reflective of the true value of coordinated care and innovation. Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 38

39 Federally Qualified Health Center Demonstration 3-year Demonstration designed to evaluate the effect in improving care, promoting health, and reducing the cost of care provided to Medicare beneficiaries served by FQHCs The Demonstration began on November 1, 2011, with the first quarterly prospective payment made on November 15, FQHC provided medical services to at least 200 Medicare beneficiaries (with Part A and Part B coverage, not Medicare Advantage) in a 12-month period, including those with both Medicare and Medicaid (dual eligible) coverage. CMS has reviewed administrative data and determined which FQHCs have met this criterion. Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 39

40 Federally Qualified Health Center Demonstration FQHC is listed in the Provider Enrollment Chain and Ownership System (PECOS) file and is able to receive electronic funds transfer (EFT) Beneficiaries, including dually eligible Medicare/Medicaid beneficiaries, must be enrolled in the Medicare Part A and Part B fee-for-service program, during the initial 12 month look-back period, and must not be currently in hospice care or under treatment for end-stage renal disease Beneficiaries enrolled in Medicare Advantage are not eligible to participate in this Demonstration Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 40

41 Federally Qualified Health Center Demonstration Attribution of beneficiaries to an FQHC will be based on Medicare administrative data for beneficiaries for whom CMS has a claim in the look-back period Beneficiary eligibility is verified each quarter prior to payments being made Participating FQHCs will receive a monthly care management fee of $6.00 for each eligible Medicare beneficiary Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 41

42 Federally Qualified Health Center Demonstration Payment will be made quarterly The fee will be paid automatically without the need to submit a claim Payment can only be made via Electronic Funds Transfer (EFT) Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 42

43 FQHC Terms and Conditions The FQHC agreed to pursue Level 3 PCMH recognition from the National Committee for Quality Assurance (NCQA) by the end of the Demonstration The FQHC agreed to remain in the Demonstration for the 3-year duration beginning November 1, 2011 The FQHC agreed to submit a completed Application to participate by Friday, September 9, 2011, and to submit an initial Patient Centered Medical Home (PCMH) Readiness Assessment as part of the application process by September 16, 2011 Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 43

44 FQHC Terms and Conditions The FQHC agrees to submit a revised Readiness Assessment every 6 months for the duration of the Demonstration The FQHC agrees to cooperate with the organization CMS engages to evaluate the Demonstration The FQHC agrees to comply with all monitoring requirements The FQHC must attest that it is not currently under a corrective action plan from HRSA for serious safety or financial issues Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 44

45 FQHC Terms and Conditions The FQHC acknowledges that CMS can terminate participation in the Demonstration for failure to progress toward PCMH recognition based on periodic Readiness Assessment scores The FQHC acknowledges that CMS can terminate participation in the Demonstration by any FQHC that has committed Medicare fraud Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 45

46 QUESTIONS Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 46

47 For more information, contact: Paul Hannah Direct Mobile Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International Crowe Horwath LLP Audit Tax Advisory Risk Performance 2014 Crowe Horwath LLP 47

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