New Landscape of Medicine: Reaching Alternative Payment Models through Practice Transformation

New Landscape of Medicine: Reaching Alternative Payment Models through Practice Transformation Amy Nguyen Howell, MD, MBA, FAAFP Chief Medical Officer

CAPG: Who We Are 2 CAPG represents close to 300 physician groups in 40 states, Puerto Rico, and Washington, DC The model financial and clinical accountability Risk-based payment to the physician organization PMPM, shared risk, or bundled payment Physician organization is clinically responsible for patient population, defined in advance Robust internal and external quality reporting infrastructure Our mission is to drive the evolution and transformation of health care delivery for our country

CAPG Membership 3

Objectives New Landscape of Medicine Continuous quality improvement to improve patient safety Shifting from volume to value-based payments Measure alignment and streamlining MACRA Review of the Medicare Access and CHIP Reauthorization Act Practice Transformation Increase your STARS potential CAPG PO examples CAPG resources

Better Care, Smarter Spending, Healthier People Focus Areas Incentives Description Promote value-based payment systems Test new alternative payment models Increase linkage of Medicaid, Medicare FFS, and other payments to value Bring proven payment models to scale Care Delivery Encourage the integration and coordination of services Improve population health Promote patient engagement through shared decision making Information Create transparency on cost and quality information Bring electronic health information to the point of care for meaningful use Source: Burwell SM. Setting Value-Based Payment Goals HHS Efforts to Improve U.S. Health Care. NEJM 2015 Jan 26; published online first.

MACRA is part of a broader push towards value 6 and quality In January 2015, the Department of Health and Human Services announced new goals for value-based payments and Alternative Payment Models in Medicare

Department of Health and Human Services Goals 7

APM Framework: At-A-Glance 8

What is MACRA? 9 MACRA stands for the Medicare Access and CHIP Reauthorization Act of 2015, bipartisan legislation signed into law on April 16, 2015. What does it do? Repeals the Sustainable Growth Rate (SGR) Formula Changes the way that Medicare pays clinicians and establishes a new framework to reward clinicians for value over volume Streamlines multiple quality reporting programs into 1 new system (MIPS) Provides bonus payments for participation in eligible alternative payment models (APMs)

Medicare Payment Prior to MACRA 10 Fee-for-service (FFS) payment system, where clinicians are paid based on volume of services, not value The Sustainable Growth Rate (SGR) Each year, Congress passed temporary doc fixes to avert cuts (no fix in 2015 would have meant a 21% cut in Medicare payments to clinicians) MACRA replaces the SGR with a more predictable payment method that incentivizes value.

MACRA Overview Merit Based Incentive Payment System (MIPS) MIPS adjusts traditional fee-for-service payments upward or downward based on new reporting program, integrating PQRS, Meaningful Use, and Value-Based Modifier Measurement categories (composite score of 0-100): Clinical Quality Meaningful Use Resource Use Practice Improvement Eligible Alternative Payment Model (APM) Supported by their own payment rules, plus: 5% annual bonus FFS payments for physicians who get substantial revenue from APMs that Involve upside and downside financial risk, e.g. ACOs or bundled payments PCMHs, if quality with or cost; cost with or quality (e.g., CPC+)

Medicare Reporting Prior to MACRA 12 MACRA streamlines these programs into MIPS Physician Quality Reporting Program (PQRS) Value-Based Payment Modifier Medicare Electronic Health Records (EHR) Incentive Program Merit-Based Incentive Payment System (MIPS)

MACRA affects Medicare Part B clinicians 13 Affected clinicians are called eligible professionals (EPs) and will participate in MIPS. The types of Medicare Part B health care clinicians affected by MIPS may expand in the first 3 years of implementation. Years 1 and 2 Years 3+ Secretary may broaden EP group to include others such as Physicians, PAs, NPs, Clinical nurse specialists, Nurse anesthetists Physical or occupational therapists, Speech-language pathologists, Audiologists, Nurse midwives, Clinical social workers, Clinical psychologists, Dietitians / Nutritional professionals

14 Are there any exceptions to participation in MIPS? There are 3 groups of clinicians who will NOT be subject to MIPS: 1 FIRST year of Medicare Part B participation Below low patient volume threshold Certain participants in ELIGIBLE Alternative Payment Models Note: MIPS does not apply to hospitals or facilities

How much can MIPS adjust payments? 15 Note: MIPS will be a budget-neutral program. Total upward and downward adjustments will be balanced so that the average change is 0%. +7%+9% +4% +5% *Potential for 3X adjustment +/- Maximum Adjustments -4% -5% -7% -9% 2019 2020 2021 2022 onward Merit-Based Incentive Payment System (MIPS)

What will determine my MIPS score? 16 The MIPS composite performance score will factor in performance in 4 weighted categories: Quality Resource use Clinical practice improvement activities Use of certified EHR technology MIPS Composite Performance Score 2019 2020 2021 50% 10% 15% 25% 45% 15% 15% 25% 30% 30% 15% 25% % weights for quality and resource use are scheduled to adjust each year until 2021

RECALL: Exceptions to Participation in MIPS 17 There are 3 groups of clinicians who will NOT be subject to MIPS: 1 FIRST year of Medicare Part B participation Below low patient volume threshold Certain participants in ELIGIBLE Alternative Payment Models

What is an Alternative Payment Model (APM)? 18 APMs are new approaches to paying for medical care through Medicare that incentivize quality and value As defined by MACRA, APMs include: CMS Innovation Center model (under section 1115A, other than a Health Care Innovation Award) MSSP (Medicare Shared Savings Program) Demonstration under the Health Care Quality Demonstration Program Demonstration required by federal law

Eligible APMs are the most advanced APMs 19 As defined by MACRA, eligible APMs must meet the following criteria: Base payment on quality measures comparable to those in MIPS Require use of certified EHR technology Either (1) bear more than nominal financial risk for monetary losses OR (2)be a medical home model expanded under CMMI authority

Note: MACRA does NOT change how any particular APM rewards value. Instead, it creates extra incentives for APM participation. 20

MACRA provides additional rewards for participating in APMs 21 Potential financial rewards Not in APM In APM In eligible APM MIPS adjustments MIPS adjustments + APM-specific rewards If you are a qualifying APM participant (QP) APM-specific rewards + 5% lump sum bonus

Putting it all together 22 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 & on Fee Schedule +0.5% each year No change +0.25% or 0.75% MIPS Participation in Qualifying APM Max Adjustment (+/-) +5% bonus (excluded from MIPS) 4 5 7 9 9 9

TAKE-AWAY POINTS 23 1) MACRA changes the way Medicare pays clinicians and offers financial incentives for providing high value care 2) Medicare Part B clinicians will participate in the MIPS program, unless they are in their 1 st year of Part B participation, meet criteria for participation in certain APMs, or have a low volume of patients 3) Payment adjustments and bonuses will begin in 2019 4) A proposed rule is out for comment, with the final rule targeted for fall 2016

How will MACRA affect me? Yes Am I in an eligible APM? No Am I in an APM? Yes No Is this my first year in Medicare OR am I below the low-volume threshold? Do I have enough payments or patients through my eligible APM? Yes No Qualifying APM Participant Favorable MIPS scoring & APMspecific rewards Yes Not subject to MIPS No Subject to MIPS Excluded from MIPS 5% lump sum bonus payment (2019-2024), higher fee schedule updates (2026+) APM-specific rewards Bottom line: There will be financial incentives for participating in an APM, even if you don t become a QP Key: APM = Alternative Payment Model MIPS = Merit-Based Incentive Payment System QP = Qualifying APM Participant

Goals for Payment Reform 25

What should I do to prepare for MACRA? 26 Participate in CAPG s Practice Transformation Program Look for future CAPG educational activities Provide comments to the proposed rule (due June 27, 2016)

Transforming Clinical Practice Initiative Support more than 140,000 clinicians in their practice transformation work Improve health outcomes for millions of Medicare, Medicaid and CHIP beneficiaries and other patients Reduce unnecessary hospitalizations for 5 million patients Generate $1 to $4 billion in savings to the federal government and commercial payers Sustain efficient care delivery by reducing unnecessary testing and procedures Build the evidence base on practice transformation so that effective solutions can be scaled

5 Phases of Transformation 28

29 CAPG Practice Transformation Program: Delivering Coordinated Care

Practice Transformation 30 REVITALIZE AND REVOLUTIONIZE PRIMARY CARE TO ACHIEVE THE QUADRUPLE AIM a) Better patient experience of care b) Improved population health outcome c) Lower total cost of care trend d) Improve clinician satisfaction

Does good primary care reduce total per capita health care costs? 31 Geisinger Health System, Pennsylvania, 2006-2010 43 medical home practices, 26,000 Medicare patients, total healthcare costs before and after medical home introduced 25% lower hospital admits, 50% lower readmissions 7.1% lower total costs ROI 1.7M More years of medical home transformation yields greater cost reductions Source: Maeng et al, Am J Managed Care 2012;18:149-155

Does good primary care improve clinician satisfaction and less burnout? Survey of 422 general internists and family physicians 48%: work pace is chaotic 78%: little control over the work 27%: definitely burning out 30%: likely to leave the practice within 2 years Medical errors, reduced quality, poor patient experience, reduced patient adherence to treatment plans Burnout threatens recruitment and retention of primary care physicians Poor patient access causes more physician burnout 32 Sources: Linzer et al. Annals of Internal Medicine 2009;151:28-36 Dyrbye, JAMA 2011;305:2009 Murray et al, JGIM 2001:16,452 Landon et al, Med Care 2006;44:234

Practice Transformation 33 Engaged leadership Data-driven improvement Empanelment Team-Based Care Patient-team partnership Population management Continuity of care Prompt access to care Coordination of care Alternatives to routine face-to-face care

Fee-for-Service to Capitation 34 Practice Transformation requires sizable capital investment Technology Create the digital infrastructure Increase data velocity amongst participants Deploy a Care Management Army Predictive models Clinical Performance Reporting Additional Regulatory / Compliance Requirements Executive Management

Practice Transformation 35 Markers of profitability to support practice transformation in the payment model for capital requirements: Cost savings Revenue optimization Budget neutrality from a resource perspective (FTEs) **************************************************************** Optimize care team task allocation Redesign practice workflows Incorporate practice transformation into daily activities of team members

How Practice Transformation Relates to Population Health Management 36 Cost/Utilization Reductions Quality Performance Revenue Optimization Intimate Knowledge of Payment Model: Precise Execution of ALL aspects

Population Management 37 Improving member care and quality of life within in an integrated manner using a framework that leverages best practice advanced analytic capabilities to provide a holistic view of your population and provide the right intervention at the right time to drive member and provider behavior.

Model Population Approach to HCC Uncover RAF Screening Identifies New and Unique Chronic Disease States through Screening based on Evidenced Based Protocols Enhanced Logic for Additional HCCs Analytics based on Pharmacy, Laboratory, HCPCs, CPTs for Additional Non-Documented RAF Foundational Recapture of ALL Chronic Conditions Foundation to Recapture all Chronic Illnesses Year-Over-Year (ICD-10 challenge) Revenue Optimization Pyramid

Adherence to medications improves outcomes and economics 39 Source: Sokol MC, Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost. Medical Care. 2005. A Task Force for Compliance. 43; 521-530. Retrospective, observational: 1997 through 1999. Employer example: large manufacturer1

Adherence to medications improves outcomes and economics 40 Diabetes, hypertension and high cholesterol non adherence cost the U.S. $106 billion a year. Source: Am J Pharm Benefits, 2012 In patients who take their medications as prescribed, annual medical spending is reduced by approximately: $9,000 per patient with Congestive Heart Failure $4,000 per patient with hypertension or diabetes $2,000 per patient with high cholesterol Source: Health Affairs, 2011

Question #1: 41 Which of the following statements are true related to the importance of medication adherence to Medicare Advantage Star Rating measures: a. Medication adherence measures represent almost half of the part D Star Rating score b. Medication adherence measures directly or indirectly impact 22 of the 48 Star measures c. Medication adherence measure are weighted equally to the other 45 Star measures d. a and b are true e. a, b, and c are true

Question #1: 42 Which of the following statements are true related to the importance of medication adherence to Medicare Advantage Star Rating measures: a. Medication adherence measures represent almost half of the part D Star Rating score b. Medication adherence measures directly or indirectly impact 22 of the 48 Star measures c. Medication adherence measure are weighted equally to the other 45 Star measures d. a and b are true e. a, b, and c are true

Adherence to medications improves outcomes and economics 43 Diabetes, hypertension and high cholesterol non adherence cost the U.S. $106 billion a year. Am J Pharm Benefits, 2012 In patients who take their medications as prescribed, annual medical spending is reduced by approximately: $9,000 per patient with Congestive Heart Failure $4,000 per patient with hypertension or diabetes $2,000 per patient with high cholesterol Health Affairs, 2011

Part D Star Measures 44 14 of the 48 individual Star measures relate to Part D 48% of the Part D score & 17% of the overall Star score is attributable to medication adherence 22 of 48 Measures Impacted 9 Direct 13 Indirect

Source: CMS Medicare Health & Drug Plan Quality and Performance Ratings 2015 Part C & Part D Technical Notes 45

Impact of Medication Adherence on Star Rating Measures 46

Patient-Centric, Collaborative Approach Oversees clinical in-patient care, partnering with patient s Practice Team Provides real-time clinical documentation and communication Attending Physician Physician Organization Care Organizes Management and delivers care Team management and support Facilitates network referrals Coordinates, facilitates and performs health care management (patient access, team-based care, medication management) Collaborates with patient s stakeholders Practice Team Patient Caregivers / Family Collaborates with physician group s quality and clinical teams Helps support population Health Plan health and care management programs Contributes in self-care, health care education, and shared decision making Communicates directly with Practice Team 47

CAPG Educational Series 2016 48 How to Thrive in Risk-Based Coordinated Care April 22, 2016, 9:00am 4:00pm Hyatt Regency O'Hare, Chicago $100 for CAPG members, $200 for non-capg members Standards of Excellence : Learn the Elements of Care Coordination Amy Nguyen Howell, MD, MBA, Chief Medical Officer, CAPG Capitated Risk Contracts: Must-Have Provisions Stephen Linesch, MBA, SVP, Administration and Development, CAPG Practice Transformation: Getting Everyone on the Team to Practice at the Top of Their License Russell Kohl, MD, Founder, 2.0 Healthcare Risk Adjustment and Population Health Management Scott Howell, DO, MPH, TM, CPE, Physician Executive, Heritage Provider Network Essentials of Effective Communication for Leadership Thomas Gordon, SVP, Cedars-Sinai Health System

CAPG Educational Series 2016 How to Thrive in Risk-Based Coordinated Care Oct. 27, 2016, 9:00am 4:00pm Hyatt Regency O'Hare, Chicago $100 for CAPG members, $200 for non-capg members 49 Managed Care 101: Utilization Resource Management Mariella Cummings, Principal, Results Incorporated; Former CEO, Physicians of Southwest Washington Performance Measurement: HEDIS and STARS and How They Work Peggy O Kane, Founder and President, NCQA The Unique Challenges of Coordinating Hospital and Group in Integrated Delivery Systems Steve Valentine, Vice President, West Coast Healthcare Management Consulting, Premier Risk Contracting: What to Know About Stop-Loss Insurance Kathryn A. Bowen, Area Executive Vice President, Arthur J. Gallagher & Company Finance Accounting and Solvency Requirements Matthew M. Mazdyasni, Consultant; Former Chief Administrative and Financial Officer, HealthCare Partners

CAPG Educational Series 2016 50 Our Complimentary Webinars: The Division of Financial Responsibility (DOFR): Protecting a Physician Organization s Economic Interests March 17 9:00am PT / Noon ET Stephen Linesch, MBA, SVP, Administration and Development, CAPG Current State of Affairs at CMS: The New Innovation Center June 30 11:00am PT / 2:00pm ET Hoangmai Pham, MD, MPH, Chief Innovation Officer, Center for Medicare & Medicaid Innovation How to Improve Patient Satisfaction September 20 10:00am PT / 1:00pm ET Stacey Hrountas, Chief Executive Officer, Sharp Rees-Stealy Medical Group Health Plan Delegation Oversight, Compliance, and Regulations December 2 9:00am PT / Noon ET (Invited) Grace Diaz, RN, BSN, MBA, CHCQM, Vice President, Accreditation, Credentialing and Clinical Compliance, Government Business Division, Anthem, Inc.

References & Further Reading 51 Health Care Payment Learning and Action Network http://innovationgov.force.com/hcplan CMS Innovation Center https://innovation.cms.gov/ CMS Draft Quality Measures Development Plan https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/value-based- Programs/MACRA-MIPS-and-APMs/Draft-CMS-Quality-Measure-Development-Plan-MDP.pdf MACRA: Medicare Access and CHIP Reauthorization Act of 2015 https://www.cms.gov/medicare/quality-initiatives-patient-assessment- Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and- APMs.html CMS Health Equity Plan https://www.cms.gov/about-cms/agency-information/omh/omh_dwnld- CMS_EquityPlanforMedicare_090615.pdf Contact information for the Transforming Clinical Practice Initiative http://www.healthcarecommunities.org/communitynews/tcpi.aspx

52 Thank you Amy Nguyen Howell, MD, MBA, FAAFP Chief Medical Officer anguyen@capg.org (213) 239-5051