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PYA to Tackle Organizational Risks, Alternative Payment Models, and HIPAA Audits at the 2017 AHIA Annual Conference


PYA Principal Martie Ross and Senior Consultant Aaron Elias conducted a session at the Association of Healthcare Internal Auditors (AHIA) 36th Annual Conference. The presentation was titled: “The Times, They Are A- Changin’: Alternative Payment Models Panel Presentation.”

Areas of focus included:
•Discussing new payment models available to providers, including the Merit-Based Incentive Payment System and Advanced Alternative Payment Models.
•Exploring CMS’ progress toward goals related to payment reform.
•Understanding alternative payment models and pay-for-performance programs—which components require auditing and recommendations for potential auditing processes.

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PYA to Tackle Organizational Risks, Alternative Payment Models, and HIPAA Audits at the 2017 AHIA Annual Conference

  1. 1. Martie Ross Aaron Elias PYA The Times, They Are A-Changing: Alternative Payment Models Panel
  2. 2. Page 1 Agenda Defining Alternative Payment Models (APMs) Managing the Transition to APMs Panel Discussion: New Compliance Challenges
  3. 3. APM Trends
  4. 4. Page 3 A Movement Is Underway Committed to having 75% of respective businesses operating under value-based payments by 2020
  5. 5. Page 4 APM Framework FEE-FOR-SERVICE (FFS) PAYMENTS POPULATION-BASED APMs ADJUSTED FFS PAYMENTS APMs INCORPORATING FFS PAYMENTS $ $ Bank A Pay for Reporting B Pay for Performance C Foundational Payments for Infrastructure and Operations A APMs with Upside Gainsharing B APMs with Upside Gainsharing / Downside Risk A Condition-Specific Population- Based Payments B Direct Primary Care C Comprehensive Population- Based Payments A Traditional FFS Source: Health Care Payment Learning & Action Network, Alternative Payment Model (APM) Framework Final Whitepaper (2017)
  6. 6. Page 5 Payment Reform in Action Source: Health Care Payment Learning & Action Network, Alternative Payment Model (APM) Framework Final Whitepaper (2017)
  7. 7. Page 6 Payment Reform in Action One-quarter of commercial plan payments now flow through APMs.* * Health Care Payment Learning & Action Network 2016 Commercial Payer Survey (respondents represent over 128 million covered lives, or nearly 44% of the combined commercial, Medicare Advantage, and Medicaid markets)
  8. 8. Page 7 FFS Care Management Rewards the monitoring and maintenance of care plans Other Examples:  Advance Care Planning  Behavioral Health Integration Chronic Care Management Incentive: Payment for non-face-to- face time caring for patients Structure:  Expanded CCM program in the 2017 Medicare Physician Fee Schedule  Separate payment for care plan development Transitional Care Management Incentive: Payment to smooth transitions between providers Structure:  Providers must make contact with beneficiaries within 7 or 14 days of discharge
  9. 9. Page 8 Spotlight: CPC+ Comprehensive Primary Care Plus Key Features  Multi-payer  PBPM care management fee to support infrastructure development  PBPM refundable performance payment  Adjusted E/M payments (Track 2)  2,866 primary care practices across 18 selected regions (by January 1, 2018)  Includes:  Care Management Fees  Performance-Based Incentive Payments Care Management Fee (PBPM) Performance- Based Incentive Payment (PBPM) Payment Structure Redesign Objective Support augmented staffing and training for delivering comprehensive primary care Reward practice performance on utilization and quality of care Reduce dependence on visit-based fee-for- service to offer flexibility in care setting Track 1 $15 average $2.50 opportunity N/A (Standard FFS) Track 2 $28 average; including $100 to support patients with complex needs $4.00 opportunity Reduce FFS with prospective “Comprehensive Primary Care Payment” (CPCP)
  10. 10. Page 9 Pay for Performance 9  Pay for reporting  Bonus payments based on quality scores  Upward/downward adjustments to fee schedule payments
  11. 11. Page 10 Spotlight: MIPS Merit-Based Incentive Payment System is the primary pay-for-performance program Quality Cost Improvement Activities Advancing Care Information −Report quality measures −Scored based on relative performance −“Practice Transformation” −Drive patient- centered care −Promote expanded adoption of EHRs −Improve utilization and sharing of electronic health information −Drive efficient care −Providers forced to accept risk 60% 0% 15% 25% 60% 0% 15% 25% 30% 30% 15% 25% 2017 Performance Year 2018 Performance Year 2019 Performance Year Impacts 2019 Payments Impacts 2020 Payments Impacts 2021 Payments
  12. 12. Page 11 Shared Savings Arrangements Rewards providers for working together to reduce payer’s cost for an attributed population Incentive: Portion of the savings realized, in addition to fee-for-service payments Structure: One- or two-sided models depending on risk tolerance Examples:  Medicare Shared Savings Program  Next generation ACOs  Commercial payer programs
  13. 13. Page 12 Spotlight: MSSP Medicare Shared Savings Program ▪ Rewards ACOs that lower growth in healthcare costs while meeting performance standards  Medicare pays providers under the Medicare Fee-For-Service payment systems  ACO spending measured against a historical financial benchmark  Shared savings are subjected to adjustment based on quality  Tracks 1+, 2, and 3 count as Advanced APMs under QPP Track 1 One-sided risk Sharing rate: Up to 50% Performance payment limit: 10% Track 1+ Two-sided risk Sharing rate: Up to 50% Performance payment limit: 10% Shared loss rate: Fixed 30% Prospective beneficiary assignment Choice of MSR/MLR Track 2 Two-sided risk Sharing rate: Up to 60% Performance payment limit: 15% Shared loss rate: 40% - 60% Track 3 Two-sided risk Sharing rate: Up to 70% Performance payment limit: 20% Shared loss rate: 40% - 75% Prospective beneficiary assignment
  14. 14. Page 13 Spotlight: MSSP 13  MSSP Waivers  ACO Pre-Participation Wavier  ACO Participation Wavier  Shared Savings Distribution Waiver  Compliance with the Stark Law Waiver  Patient Incentive Waiver  Protect financial arrangements that further the purposes of the MSSP from challenge under the Anti-Kickback Statute, the Stark Law, and Civil Monetary Penalties Act
  15. 15. Page 14 Episodic (Bundled) Payments Rewards coordination and efficiency among all providers within a specific episode of care Incentive: Retain overage of payment if costs are managed below target Structure: Payment for all services furnished during an identified cost of care, prospective or retrospective models depending on risk tolerance Examples:  Bundled Payment for Care Improvement  Oncology Care Model  Comprehensive Care for Joint Replacement  Episodic Payment Model
  16. 16. Page 15 Spotlight: CJR Comprehensive Care for Joint Replacement ▪ Hospitals accountable for quality and cost for hip and knee replacement surgeries (adding hip and femur fractures effective January 1, 2018) ▪ Incentivizes increased coordination of care among:  Hospitals  Physicians  Post-acute care providers ▪ 90-day episode of care ▪ 67 MSAs included
  17. 17. Page 16 Spotlight: EPM Episode Payment Model ▪ Final rule released December 20, 2016  Effective January 1, 2018 ▪ New models:  Acute Myocardial Infarction (AMI)  Coronary Artery Bypass Grafting (CABG) ▪ 98 MSAs included
  18. 18. Page 17 EPM Bundle Definitions AMI, CABG, & SHFFT AMI CABG Services included Part A and B services Episode start At admission for AMI treatment At admission for CABG treatment Episode end 90 days following hospital discharge Payment Retrospective MS-DRGs 280, 281, 282 Contingent: 246, 247, 248, 249, 250, 251 231, 232, 233, 234, 235, 236
  19. 19. Page 18 Example: AMI Analysis  PYA performed analytics for AMI episodes in Nashville, TN market  Episodes initiated at 10 different Nashville-area hospitals  260 different SNFs, outpatient facilities, and home health agencies KEYFINDINGS  Among these 270 organizations, there was a wide variation in AMI-associated costs – ranging from $5,500 to $58,000  By far, the largest drivers of cost variations were hospital readmissions and length of SNF stays  Among the costliest 20% of episodes, the average was $43,200 - nearly 4 times higher than the overall average  The overall AMI readmission rate was 27%, but the 20% highest paid episodes had a rate nearly 3 times higher: 76%  The top quintile of highest paid episodes had SNF costs that were 3 times higher than the overall average
  20. 20. Page 19 Gainsharing Under Cardiac EPMs 19  Three permitted financial arrangements under a Sharing Arrangement  Sharing a Reconciliation Payment with an EPM Collaborator--hospitals may pay all or a portion of the reconciliation payment for a given performance year  Sharing Internal Cost Savings with an EPM Collaborator-- hospitals may share measurable and actual cost savings with EPM collaborators  Sharing a Repayment Obligation with an EPM Collaborator--hospitals may pay all or a portion of the repayment obligation to CMS
  21. 21. Page 20 Global Budgets Rewards provider network for managing a defined patient population within a single budget Incentive: Reduce unnecessary and avoidable services to remain within budget Structure: Advance payment for network to assume full responsibility for defined population Examples:  Comprehensive ESRD Care Model  Provider-led Medicare Advantage plans
  22. 22. Managing the Transition to APMs
  23. 23. Page 22 Fee-for-Service Payments Incentives Measures Regulators Providers Patients Risk FFS Model  Maximize Patients  Maximize Services  DRGs and APCs  CPTs  Fraud and Abuse Laws  Reimburse- ment Rules  Silos  Competitors  Unmanaged chronic conditions  Uninvolved with care  Resides with payer  Increasing costs
  24. 24. Page 23 Messaging Must clearly define goals and requirements of new, alternative payment models
  25. 25. Page 24 Value-Based Payments Incentives Measures Regulators Providers Patients Risk APMs and Value- Based  Manage patient population  Coordinate continuum of care  Quality  Efficiency  Network participation  Continuum of care  Collaborators  Educated  Engaged  Moves to providers Keys to Success:  Physician-led governance  Performance feedback, transparency, and accountability  Evidence-based decision-making  Care coordination and management
  26. 26. New Compliance Challenges Panel Discussion25
  27. 27. Save the Date San Diego, CA August 26-29, 2018
  28. 28. Page 27 Thank You 27 Aaron Elias Senior Consultant PYA aelias@pyapc.com (319) 560-0716 Martie Ross Principal PYA mross@pyapc.com (913) 232-5145 Susan Thomas Senior Manager PYA sthomas@pyapc.com (913) 232-5145

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