Healthcare Reform and Clinical Research: How Investment in Research Can Help Drive Quality Programs
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1 Sponsored By: Healthcare Reform and Clinical Research: How Investment in Research Can Help Drive Quality Programs October 4, :00 3:30 pm Central/3:00-4:30 pm Eastern Rick Rohrbach, MBA, CPA Larry Burnett RN, MS
2 Session Objectives 1. How research programs can be leveraged to support quality and cost reduction initiatives 2. Why hospitals invest in research programs 3. Evaluate the infrastructure needed to effectively manage research and how this infrastructure is organized at other institutions 4. Identify risks (regulatory, financial) and other considerations 2
3 Agenda 1. Market Forces and Evolving Reimbursement 20 Min 2. Why hospitals invest in research programs 15 Min 3. Infrastructure Considerations 20 Min 4. Selected Regulatory Risks 20 Min 5. Q & A 15 Min 3
4 Market Forces and Evolving Reimbursement 4
5 Four Primary Market Forces Driving Payment and Delivery Reform Unsustainable Healthcare Expenditures Increased Prevalence of Costly and Preventable Chronic Conditions Payment & Delivery Reform Maturing Science of Quality and Outcomes Growing Recognition of Variation in Care Delivery 5
6 Care Delivery and Payment Reform A fundamental shift in how we deliver and pay for healthcare services Element of Change TODAY FUTURE Health Care Focus Sick Care Wellness and Prevention Care Management Manage utilization and cost within a care setting Manage on-going health (& Optimize Care Episodes) Delivery Models Fragmented / Silos Care Continuum & Coordination (Right Care, Right Place, Right Time) Care Setting In office / hospital / person Home, e-health, m-health Physician Platform Solo practitioners Multi-specialty, integrated Clinical Systems/EMR Transactional Interoperable, HIE Quality Measures Process-focused, Individual Outcomes-focused, Population based Reimbursement Fee-for-service Value-Based (Outcomes, Utilization, Total Cost) Financial Incentives Do more, make more Perform better, make more Financial Performance Margin per service, procedure, etc. (bed, doc, etc.) Margin per life 6
7 Market Upheaval and Opportunity The Healthcare Reform Bill and Private Sector trends are having a profound effect on healthcare providers: Immediate reductions in reimbursement to hospitals and physicians Focus on value-based purchasing higher quality and lower costs Financial penalties for poor quality outcomes Transition from volume-driven fee-for-service payments to valuebased purchasing and bundled payments Accountable Care Organizations (ACO s) Private Sector moving independently to control rising cost of healthcare 7
8 Key Health Reform Initiatives Hospital Readmission Data go Public Increased Medicaid Payment for Primary Care Physicians Individual and Business Mandates Dependents Covered to Age 26 Report Healthcare Benefit Value on W-2 Penalties for High Readmission Rates Hospital-Acquired Infections Publicly Reported Exchanges and Affordability Credits Ends Rescissions and Coverage Limits Community Health Center Funding Co-Ops Established Medicaid Expansion Medicare Market Basket Update Productivity Reductions Begin No Federal Matching for Medicaid Hospital- Acquired Conditions Monitoring for Hospital & Physician Value Based Purchasing Standards Begins Bundled Payment National Voluntary Pilot (5 year agreements) Medicare and Medicaid DSH Cuts Not-for-Profit Requirements Begin Accountable Care Organizations Pilot Providers can Qualify for Incentives VBP Program for Hospital and Physician Payments Independent Payment Advisory Board Source: HFM Magazine, May 2010 Excessive Readmissions for AMI, CHF, PN Result in 1-3% Penalty (all DRGs) Reduced Payment for High Levels of Hospital- Acquired Conditions (1% for worst quartile) 8
9 Hospital Value-Based Purchasing (VBP) Program Centers for Medicare and Medicaid Services (CMS) approach to paying more for high-quality care, and less for low-quality care Medicare will reward hospitals that deliver high-quality care with incentive payments To measure quality, Medicare will use certain process-of-care measures hospitals have already been reporting through the Hospital Inpatient Quality Reporting (IQR) Program, as well as scores from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) To fund these incentive payments, Medicare will reduce the base operating diagnosis-related group (DRG) payments for hospitals discharges in each fiscal year (FY) starting in
10 The Market s Focus on Value the U.S. has the highest per capita health care costs of any industrialized nation... Yet as much as 20 to 30 percent of these costs may be unnecessary, or even counterproductive, to improved health. Institute of Medicine. Value in Health Care: Accounting for Cost, Quality, Safety, Outcomes, and Innovation. Workshop Summary. December 16, 2009 In just six categories of waste overtreatment, failures of care coordination, failures in execution of care processes, administrative complexity, pricing failures, and fraud and abuse the sum of the lowest available estimates exceeds 20% of total health care expenditures. The actual total may be far greater Special Communication, Eliminating Waste in US Health Care Donald M. Berwick, Andrew D. Hackbarth, JAMA. 2012; Published online March 14,
11 The Market s Focus on Variation and Inappropriate Utilization service use in higher use areas (90 th percentile) is 30% greater than in lower use areas (10 th percentile); the analogous figure for spending is about 55%. Medicare Payment Advisory Commission. Report to the Congress. Regional Variation in Medicare Service Use. January 2011 Excessive testing costs $200 billion to $250 billion (per year).there s an overuse of imaging studies, CT scans for lung disease, overuse of routine electrocardiograms and other cardiac tests such as stress testing. Dr. Steven Weinberger, CEO, American College of Physicians, quoted in Stemming the Tide of Overtreatment in U.S. Healthcare, Reuters. Published online Feb. 16,
12 Growing Physician-Led Movement to Identify Over-Utilization Recent example is the Choosing Wisely project, organized by the American Board of Internal Medicine (ABIM) and promoted by Consumer Reports Seventeen professional societies are participating in identifying diagnostic and treatment procedures that are over-utilized and can create more risks than benefits Examples include CT scans for low back pain, antibiotics for sinus attacks, stress cardiac imaging or other advanced noninvasive imaging in asymptomatic patients or those at low risk for coronary disease Some of the participating societies include the American College of Radiology (ACR), the American College of Physicians (ACP), the American Academy of Family Physicians (AAFP), and the American College of Cardiology (ACC) Doctors Say 45 Common Tests 'Overused' John Gever, MedPage Today; Published online April 04,
13 Research in Practice Health Sciences South Carolina 2009 initiated a study with Greenville Hospital to determine whether the use of engineering management tools could improve decision making among perioperative staff and result in a more efficient flow of patients through POS (with implications for cost reductions and patient safety improvements). Early feedback and observations from the study indicate exposure to simulation has a motivating effect on POS staff to reduce delays, both to make their work environment better and to help their patients. Final phase of study will involve a smaller scale re-engineering effort at Palmetto Health Richland to prove these concepts Source: Health Sciences South Carolina 2011 Annual Report 13
14 Research in Practice New York Health and Hospital Corporation International Study of Comparative Health Effectiveness With Medical and Invasive Approaches (ISCHEMIA) NYU School of Medicine awarded $84M international, multi-site clinical trial HHC leveraged unique patient population (urban, largely underserved and uninsured) to take part in the trial HHC Benefits Improved quality of care for patients; Trial participants receive coordinated care, expanded access to treatment and an added behavioral health modification intervention Provides support and resources for HHC investigators; Novice HHC investigators partnered with & learned from NYU faculty and NYU provided needed resources to support investigators (i.e., research coordinators) Raises the profile of HHC; Enrolling patients in the trial highlights HHC s interest in research participation and a track record of successfully recruiting and retaining patients encourages future partnerships 14
15 Why Hospitals Invest in Research 15
16 Why Hospitals Invest in Research Patients Gives patients access to new therapies that may not be available to the general population Provides access to expert clinical resources doctors, nurses and other medical staff Contributes to knowledge that may help others with the same disease, now and in the future Strengthens community relationships/ involvement Increases awareness of the institution Positive experiences change the view of clinical trials Enhances the feeling of ownership of their own healthcare 16
17 Why Hospitals Invest in Research Physicians Recruitment and retention of top physicians/researchers Training for physicians who are interested in conducting research Career development opportunities Contributes to the mission, vision of the institution Promotes collaboration within the institution and with external organizations Provides a means to improve patient outcomes Serves as alternative to clinical care to impact the bottom line Enables researchers to pursue their passion 17
18 Why Hospitals Invest in Research Economics Use residual funds to support other, unfunded research projects Increases development / fundraising efforts Provides an opportunity to diversify the institution s financial portfolio Often leads to groundbreaking discoveries (patents, royalties, etc.) Results in improved efficiencies (quality and outcomes research) Overall economic impact to the community 18
19 Why Hospitals Invest in Research Reputation Used as a marketing tool and point of differentiation from competition Elevates the local and national presence of the health system Enhances community relationships Successful NIH awards lead to more awards Efficiently run clinical trials result in increased industry funding 19
20 Infrastructure Considerations 20
21 Infrastructure Considerations Elements While the infrastructure supporting provider-based research programs can vary greatly, the core elements typically include: Sponsored Programs Office Pre-Award Post-Award Clinical Trials Research Cores Compliance 21
22 Infrastructure Considerations Sponsored Programs Office 22
23 Infrastructure Considerations Sponsored Programs Office Pre-Award Functions Identification of Funding Opportunities ( Business Development ) Solicited, unsolicited, subcontract and corporate applications Renewals & continuation applications Proposal Development & Budgeting Assist with information gathering and proposal writing (federal) Coordination with departments to build appropriate / realistic budgets Proposal Routing & Review Institutional clearances, e.g. Conflict of Interest, Institutional Review Board (IRB), Biosafety Review, edit/comment and respond to researcher / department with changes 23
24 Infrastructure Considerations Sponsored Programs Office Pre-Award Functions Proposal Approval and Submission Authorized signatory review and approval Mail or electronic submission of proposal Dissemination of confirmation of receipt to appropriate parties Award Negotiation & Acceptance Review terms & conditions; negotiate or accept award Typical items to negotiate: period of performance, budget amount, payment terms, reports/deliverables 24
25 Infrastructure Considerations Sponsored Programs Office Post-Award Functions Account Setup Budgets reviewed and approved by PI/dept Accounts established and validated by PI and/or pre-award Expenditure Monitoring, Charging, Transfer Activities Review direct charging activities on awards and contracts Charging trends and practices reviewed prospectively Cost transfers processed for errors and mis-charges Award Compliance, Audits, Regulations Appropriate spending and within budget restraints Timely and appropriate protocol reviews/renewals; reasonable trial accrual pace Annual audits, site visits, policy interpretation, monitoring & enforcement Source: Huron Analysis 25
26 Infrastructure Considerations Sponsored Programs Office Clinical Trials Study Initiation Study design and protocol development Feasibility Contracts and budgets negotiation Participant recruitment Regulatory support Expertise for hire Study coordinators Data managers 26
27 Infrastructure Considerations Research Core Facilities Some providers have also invested in scientific core facilities Informatics Biostatistics Imaging Sample processing Stem cell processing Pathology/ Mass Spectrometry even Animal Facilities 27
28 Research Infrastructure Elements Compliance Research compliance function (typically part of hospital s compliance office) Training Proactive risk assessments Support for research community Dedicated regulatory functions Institutional Review Board Radiation Safety Billing compliance office 28
29 Infrastructure Considerations Common Challenges in Provider Environment Area of Focus 1. PEOPLE Does the hospital have the appropriate personnel to effectively support research administration? 2. ORGANIZATIONAL STRUCTURE Does the organization structure and key leadership positions effectively support and manage the research organization? Common Findings Individuals responsible for regulatory and financial management functions lack expertise / experience No individual at the hospital solely focused on ensuring the various research administration functions are coordinated and performing effectively Significant turnover Regulatory, financial, administrative, and managerial needs are shared among individuals trained to do other jobs (e.g. research coordinators) If a research office exists, the leader of that office does not have the authority or influence to effect necessary effect changes in other parts of the organization (e.g. research billing compliance) 29
30 Infrastructure Considerations Common Challenges in Provider Environment Area of Focus 3. BUSINESS PROCESSES Are business processes efficient and effective? 4. TECHNOLOGY Is technology appropriately enabling business processes? Common Findings Most business processes have not been formalized Significant gaps in inventory of policies and procedures. Limited training program for new hires. Researchers express frustration with the lack of support for key functions (e.g. regulatory, patient enrollment, etc.) Unclear and/or misalignment of roles and responsibilities The financial systems at most providers do not support project accounting. As a result, financial management is often performed using shadow systems (MS Excel) Invoicing and receivables managements is not handled well leading to unplanned write-offs Many providers do not have information systems to support the other aspects of managing research (e.g. systems to support project and patient tracking, compliance functions, etc.) Therefore, it is difficulty to manage research 30
31 Infrastructure Considerations Selecting the Right Model for your Institution The size and elements of the infrastructure necessary to manage your research programs depends on a variety of factors including: Volume of research Nature of the research (basic/clinical, federal/industry) Goals for your research programs Availability of resources and expertise available Financial support (amount and type of funding) Risk tolerance Cultural preferences 31
32 Research Infrastructure Governance / Organizational Models Internal Department / Function Research Institute Outsource Service provider (e.g. Contract Research Organization) Affiliate academic / research institution 32
33 Research Infrastructure Internal Department / Function Goals Manage existing research programs Develop and oversee standards / ensure appropriate financial and regulatory controls are in place Provide a focal point for serving the research community and addressing management s concerns Home for research support experts and leverage this investment across various departments Typical Elements Most sponsored programs functions Research compliance as part of the system compliance office Technologies Clinical trials management system 33
34 Research Infrastructure Internal Department / Function 34
35 Research Infrastructure Internal Department / Function VP Research Programs Research Oversight Committee Director Business Ventures Business Office Scientific Shared Services Clinical Trials Operations Compliance Business Devel External / Internal Marketing Alliance / Partnership Development Study Initiation Support Funding Ident. Contract Negot. Proposal Prep Budget Devel & Eval Maint of patient registry Coordination of regulatory approvals Finance / Accounting Financial Mgmt Project Reporting Project Accounting Scientific core laboratories related to research programs (e.g. stem cell core, immuno genetics) Outcomes research support unit Bioinformatics and biostatics capabilities Patient Recruitment Specialists Study Coordination & Data Management Study Coordinator Pool Data Management Quality Assurance & Training Regulatory Approvals IRB IACUC Regulatory Coordination Regulatory Oversight Compliance Coordinator Centralized QA Policy and Procedures Compliance Training Research Credentialing 35
36 Research Infrastructure Research Institute Goals Make research more visible (sponsors, researchers, patients, donors, etc.) Manage research across large integrated system Separate organization to allow for differences (e.g. human resources policies, accounting system, etc.) Typical Elements All sponsored programs and compliance functions Research cores Separate management and administrative support functions Separate facilities Technologies Full suite (Clinical trials, grants management, IRB, etc.) 36
37 Research Infrastructure Research Institute 37
38 Research Infrastructure Outsource Goals Manage existing research programs (typically smaller volume) Address support needs without committing to More easily scale investment as research volumes grow / shrink Typical Elements Research compliance as part of the system compliance office Typically one FTE (or PTE) to oversee relationship with external service provider Can be accomplished via affiliation with a research institution (e.g. hospital with AMC) or via purchased services from a contract research organization Technologies None 38
39 Research Infrastructure Outsource (via 3 rd party service provider)
40 Research Infrastructure Outsource (via affiliation with academic institution) Expand academic research infrastructure to coordinate research at both the provider organization and university Leverage infrastructure at university (personnel, systems, etc.) Develop an affiliation agreement between provider organization and university that includes: A statement that confirms the mutual commitment to supporting research and the mutual benefit of participating in research Description, role and authority of oversight committees Financial expectations Conflict resolution process May need to transfer provider employees to academic institution 40
41 Selected Regulatory Risks 41
42 Research Management Risks Introduction What is driving risk? Complex / changing regulations Institutions experiencing rapid growth often lag in the development of an appropriate infrastructure (especially as budgets are cut) Increasing enforcement action Ineffective information systems Personnel turnover 42
43 Research Management Risks Recent Enforcement Actions OIG reported financial penalties: $627.8 million in audit receivables $4.6 billion in investigative receivables 723 criminal actions against individuals or entities in FY 2011 in addition to 382 civil actions False claims/whistleblower (qui tam) suits Source: Department of Health and Human Services Office of the Inspector General Semiannual Report to Congress
44 Research Management Risks Areas of Focus Clinical trial billing Conflicts of interest Cost sharing Cost transfers Direct charging practices Effort reporting Environmental health & safety Export controls Financial reporting Good Clinical Practices Human subject protections (IRB) Invention disclosure & reporting Recharge centers Scientific misconduct Subrecipient monitoring 44
45 Research Management Risks Research Billing Compliance Clinical research billing compliance (CRBC) continues to be a priority issue for compliance and legal departments Related regulations and guidance from the Centers for Medicare and Medicaid Services (CMS) can be difficult to interpret HHS Secretary Kathleen Sebelius made a statement in July 2011 that HHS has begun several initiatives to address these inconsistencies. Clients are settling cases with the government 45
46 Research Management Risks Research Billing Compliance Clinical Research Billing Process The research billing process (depicted on the left) is complex and requires coordination and harmonization between partnering institutions (the hospital, the physician practice plan, and where applicable, the university). The steps are: Reimbursement Analysis (Coverage Analysis for Research / Medicare Coverage Analysis / Prospective Reimbursement Analysis) Budgeting and Contracting Patient Identification Registration and Admission Charge Entry and Charge Capture Charge Segregation Claims Processing and Invoicing Study Close-out and Residual Balances 2012 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential. 46
47 Research Management Risks Research Billing Compliance 2012 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential. Coverage Analysis for Research: serves as an outline of the SOC and research charges that meet the reimbursement rules Revenue Cycle Management: policies and procedures to direct the processing of SOC and research charges Training and Development: advancement of core competencies is research billing Auditing and Monitoring: a plan for ensuring a low error rate and the effectiveness of training activities Communication and Technology: a plan to increase awareness and facilitate compliance 47
48 Research Management Risks Research Billing Compliance Early detection of items and services not covered by Medicare or the involved payer Develop a spreadsheet of all the patient care costs in the study Determine if the trial qualifies for reimbursement under Medicare s/the payer s criteria Identify costs not covered by insurance or the study sponsor Development of a tool to ensure compliant claims processing Identify the claims to be split before billing Identify the services that need research specific codes and/or modifiers Identify the charges to be submitted to the study sponsor 48
49 Research Management Risks Research Billing Compliance The rules for billing standard care to research patients are subject to different interpretations For many trials, it is difficult to distinguish research from standard care The clinical trials process involves many units and people The systems are geared to patient care, not research Problems create publicity as well as financial risk The government is paying attention 49
50 Research Management Risks Research Billing Compliance Growing focus of attention from regulators and investigators on the topic Public Settlements University of Alabama settlement for $3.4 million, 2005 Weill Cornell Medical Center settlement for $4.3 million, 2005 Rush University Medical Center settlement for $1 million, 2005 Tenet Healthcare System, Norris Cancer Center for $1.9 million, 2010 Trust of sponsors and research participants Attention to accurate budgeting to ensure appropriate use of research dollars Assurance that all research dollars are captured (under billing is as or more common than over billing) 50
51 Research Management Risks Conflicts of Interest Divergence between an individual's private interests and his or her professional obligations A conflict of interest depends on the situation, and not on the character or actions of the individual COI A situation in which financial or other personal considerations may compromise one s professional judgment reasonably perceived as influencing an employee s actions or judgments in patient care, research, administrative decisions, or business transactions 51
52 Research Management Risks Conflicts of Interest Conflict of interest refers to relationships which create the perception that the relationship may interfere with one s objectivity in research, clinical care, or other activities Conflicts of interest can relate to relationships with political, personal, social, or other motivations, but our focus for now will be on relationships that appear to have the potential to offer financial gain Evolving awareness and attitudes have increased pressure on principal investigators and physicians to demonstrate objectivity (i.e., the burden of proof seems to be shifting) 52
53 Research Management Risks Conflicts of Interest The Department of Health and Human Services issued the final regulations related to individual conflicts of interest in federally funded research on August 25, 2001 Academic institutions are now required to implement the new regulation prior to August 24, 2012 and make the institutional policy publicly accessible The Physician Payment Sunshine Act (PPSA) requires pharmaceutical, medical device, biological and medical supply manufacturers to report any payment or other transfer of value to physicians and teaching hospitals 53
54 Research Management Risks Conflicts of Interest Financial Interest Significant Financial Interest Financial Conflict of Interest Anything of monetary value Reasonably related to institutional responsibilities Aggregate value $5,000 during the last 12 months Any equity in a nonpublicly traded entity Sponsored or reimbursed travel Intellectual property rights, upon receipt of income Significant financial interest Reasonably determine that the SFI could directly and significantly affect [professional responsibilities] 54
55 Research Management Risks Conflicts of Interest Refers to all individuals required to disclose financial interests under this policy including: Physicians Principal Investigators Physician Extenders Key Personnel (members of the clinical or research team, with responsibility for clinical decision-making or the design, conduct, or reporting of research) The immediate family members of these individuals, defined as spouses, dependent children, and domestic partner 55
56 Research Management Risks Conflicts of Interest A financial interest generally refers to anything of value A significant financial interest refers to financial interests that meet the following requirements for a physician, investigator, spouse, dependent children, or domestic partner: Income (salary, royalties and other payments) from an organization other than [institution] which, when aggregated, exceeds $5,000 over twelve months; or An equity interest in a publicly traded company in excess of $5,000; or Any equity interest in a privately traded company; or Any intellectual property rights for which the individual receives royalties or other income; or Other financial interests not included above that could reasonably be perceived to influence the individual s clinical, research or other professional responsibilities at [institution] 56
57 Questions 57
58 Thank you! Larry Burnett RN, MS Managing Director O C lburnett@huronconsultinggroup.com Rick Rohrbach, MBA Managing Director O C rrohrbach@huronconsultinggroup.com 58
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