Adding Value to. Provider Compensation. June 13, Healthcare Strategy Group OHA Presentation Adding Value to. Physician Compensation

Transcription

1 Provider Compensation June 13,

2 Who are We? About (HSG) Hospital-physician integration specialists since 1999 Strategic, best practice approach to employed physician networks and independent physician alignment: Strategy Physician Employment Services Independent Physician Alignment Physician Network Management John E. Hill, Partner, has over thirty years experience in hospital/physician relations, physician recruiting, practice management and consulting. Prior to forming in 1999, he was founder and president of Physician Services of America (PSA), specialists in recruiting, planning and consulting services for hospitals, health systems and physician groups. During his 16 years at PSA s helm, John developed a national reputation in the physician relations/practice management arena and was a frequent presenter at healthcare meetings and symposia, including the American College of Healthcare Executives and the Healthcare Financial Management Association. John holds Bachelor's and Master's Degrees in Business Administration from Augusta State University, Augusta, Georgia and is a member of the American College of Healthcare Executives and the Medical Group Management Association. John Hill Partner [email protected] 2

3 Agenda Why is it necessary to redesign your provider compensation plans? What types of compensation plans will be required for success? How can you design and implement a new compensation plan that works with value-based reimbursement? Impact on resources required to manage under value based reimbursement? 3

4 Payment Reform Is Driving Compensation Changes CMS/Federal Government Drivers Other Drivers Merit Based Incentive Payment System Alternative Payment Model Incentives Health Systems and Hospitals Proposed Hip and Knee Initiative Commercial Payers CMS 2018 Goals 50 percent alternative Medicare payment models 90 percent of all Medicare payments tied to value Employers 4

5 CMS Payment Reform Drivers SGR Doc Fix Medicare Bundled Payment Pilots (1/1) Medicaid Coverage Expands (1/1) Medicare Shared Savings Program (1/1) Insurance Exchanges Come Online (1/1) Mandate Goes Into Effect (1/1) Penalties for Hospital Acquired Conditions (10/1) Penalties for Readmissions (10/1) Value-Based Purchasing (10/1) Community Health Needs Assessments (by 2013) Application of Value Modifier to Medicare FFS Payments for Physicians in 100+ Physician Practices (1/1) all by

6 Payment Reform Is Driving Compensation Changes 3 Patient volume Utilization CPTs DRGs Quality Patient Satisfaction Fee for service Value CMS 2018 Goals 50 percent alternative Medicare payment models 90 percent of all Medicare payments tied to quality or value measures 6

7 Impact of SGR 1. SGR program repealed-no future cuts 2. A 5-year period of annual updates of 0.5% 3. Brings all Medicare quality reporting programs into a Merit- Based Incentive Payment System (MIPS) 4. Provides additional incentives for providers who move into alternative payment models (APMs) 5. Meaningful Use, PQRS, Value-Based Payment Modifier all sunset at the end of

8 MIPS The max bonus/penalty will incrementally increase as MIPS is introduced Example: Practice Size = 300 Providers Annual Medicare Part B Reimbursement Per Provider Per Year = $100, Maximum Positive Adjustment = 4% Max Bonus 300 Providers $100,000/Provider/Year = +$1.2 MM 2019 Maximum Negative Adjustment = 4% Max Penalty 300 Providers $100,000/Provider/Year = -$1.2 MM MIPS Year Max Bonus/Penalty Maximum Positive Adjustment Maximum Negative Adjustment % $1.2 MM -$1.2 MM % $1.5 MM -$1.5 MM % $2.1 MM -$2.1 MM 2022 and beyond 9% $2.7 MM -$2.7 MM 8

9 Encourage Physician Leadership Under Fee-For-Service Need to maximize patient contact time Medical directorships used to provide supplemental income to key physicians No way to reward physicians for shared savings programs or process improvement Under Value-Based Need to allow and encourage physicians to: Lead care process evaluation and redesign efforts Quality measure stewardship and improvement Committee participation Applying it to your Plan Designated Administrative Time Co-Management-Style Incentives As-Needed Payments 9

10 % of Physician Comp at Risk Build a Foundation for Value 7% Total compensation attributed to quality should increase gradually 6% 5% 4% 3% 2% 1% 0% Year One Year Two Year Three Time increases in quality dollars to be consistent with: Physician tolerance Capabilities Revenue stream 10

11 Key Considerations for Compensation Plans Incorporate Quality and Satisfaction Metrics into Physician Contracts (as applicable) 2 Primary Care Readmissions* Satisfaction survey results PQRS reporting PQRS process/outcomes Medicare cost per beneficiary* Cardiology Readmissions* (AMI, Heart Failure) Fibrinolytic therapy within 30 minutes Satisfaction survey results HCAHPS (doctor communication) Primary PCI within 90 minutes HF discharge instructions PQRS Surgery Readmissions* (Total hip, total knee) SCIP measures Satisfaction survey results HCAHPS (doctor communication) Surgical site infection ratio PQRS Hospitalist Readmissions* Satisfaction survey results HCAHPS (doctor communication) Blood cultures prior to initial antibiotic Initial antibiotic selection CAUTI, CLABSI, MRSA, C. Diff 11

12 New Compensation Plans Must Focus on Value Successful provider compensation plans must: Encourage Physician Leadership and Collaboration Build a Foundation for Value Focus on Team-Based Provision of Care 12

13 Capabilities Needed for Value-Based Compensation Capabilities Needed for Quality Measurement and Management: Mechanism for physician input Start with process/satisfaction vs. outcomes IT infrastructure and data analysis resources Reporting and communication platforms Feedback and process improvement systems 13

14 Strategic Considerations Right number & mix of providers? Market presence in desired locations? Is the organization of sufficient size to take risk? Do the physicians play an active role in strategic planning for the hospital? Do you have a plan to bridge FFS to value based models? How vulnerable are core services to decreases in utilization? 14

15 Physician Leadership & Culture: Key Elements Are physician leaders being identified & developed? Common vision among the physicians? Do the physicians understand their role? Is this an opportunity to get real value from physician network? 15

16 Financial Sustainability Forge a different organizational culture Develop a plan to adapt to Value Incentives (MIPS) Consolidate practices into larger groups Market presence Ambulatory diagnostics Maximize operating efficiency in practices Don t let physicians abdicate their role in managing the practices 16

17 Infrastructure Changes Moving away from traditional infrastructure Dyad management model: MD s & Execs Technology requirements & costs will increase Greater emphasis on data analytics Managing patients will change composition of staff: Need providers & managers who can interpret data and guide best practices for care management Patient management - (NP/PA s, allied health, etc.) Staff will need different set of skills How much will cost structure change? 17

18 Key Take Aways for Value Compensation Plans Practical Tips 5 1. Physician involvement is critically important. 2. Balance stability vs. flexibility. 3. Start by incentivizing care processes and patient experience. 4. Start with manageable program-don t tackle too much. 5. Build in flexibility in the areas of: Base Productivity Quality 6. Promote communication and teamwork. 7. Incorporate risk-sharing mechanisms: thresholds, risk corridors, etc. 8. Understand the legal parameters. 9. Production will always be important! 18

19 Additional Resources Are Available Compensation Thought Leadership From Healthcare Strategy Group Compensation Consulting Services Offered by Healthcare Strategy Group Physician Strategy News 67 Tips for Developing a High-Performing Physician Network Acquisition Support Contract Assessment Physician Leadership Employed Physician Network Strategy and Operations Improvement Compensation Assessment, Redesign, & Advisory 19 Other Support and Implementation