Mastering the Mandatory Elements Of the Affordable Care Act February 26, 2014 Current Reform Landscape OCT 2011 Value-Based Purchasing 30-day readmissions OCT 2012 OCT 2013 OCT 2014 OCT 2015 1.0% 1.25% 1.5% 1.75% 1.0% 1% 2.0% 2% 3.0% Hospital-acquired conditions OCT 2016 OCT 2018 OCT 2019 OCT 2020 0.65% 0.9% 0.7% 9.3%10% 9.4% 8.9% 8.7% 2.0% 1.0% Market basket reductions 0.1% 0.1% 0.3% 0.2% Multifactor Productivity Adj* 1.0% 0.7% 0.5% 0.5% 0.4% 0.5% Documentation and Coding Adj (DCA)** 4.9% 1.9% 2.1% 2.1% 2.1% 2.1% 10.6% 10.5% 11.4% Across the board cuts to finance debt *** TOTAL IMPACT OCT 2017 0.75% 2.0% 6.0% 6.7% 8.1% % = % OF MEDICARE INPATIENT OPERATING PAYMENTS *The Multifactor Productivity Adjustment is an estimate generated by the CMS Office of the Actuary **DCA, also known as the behavioral offset, shown here does not show the future affects of these cuts on baseline spending. Estimates FY 2014-FY 2017 impact of the American Taxpayer Relief Act of 2012 *** If Congress has not adopted the Joint Committee’s report to reduce the deficit by at least $1.2 trillion, the 2% cut will be implemented April 2013 Building Blocks For Other Models Timeline of Performance The Medicare DRG Formula Standard Federal Rate Labor Portion X Wage Index Non Labor Portion Adjusted Base Rate Case Mix/DRG Weight Generic Base Rate DSH Adjustment + IME Adjustment Payment 5 Payment Reform VALUE BASED PURCHASING VBP Shifting of Domain Weights FY 2013 FY 2015 FY 2014 FY 2016 20% 30% 30% 30% 10% 25% 45% 25% 20% 70% 25% • Patient Experience • Outcomes 30% 40% • Core Measures • Efficiency (MSPB) New NQS Based Domains in FY 17 Note: The Clinical Care Component is split 25% Outcomes and 10% Process Per August 13, 2013 Federal Register What Determines Reimbursement? • Reimbursement Determined Two Ways – Improvement – Achievement • Improvement – How we measure against ourselves • Did we do better than our baseline during our performance period • Achievement – How we compare to Top Decile • Must Meet or Exceede the Mean Scores of Top Decile Performers 9 Scenario on Scoring AMI 7a- Fibrinolytic Therapy .6548 Achievement Threshold .9191 Benchmark Score .4287 Baseline Score .8163 Performance Achievement Range (1-10) Improvement Range (0-9) Sourced: 2010 August Federal Register FY 16 Clinical Process of Care 10% Measure ID Description Achievement Threshold Benchmark AMI-7a Fibrinolytic Therapy received within 30 min of hospital arrival .91154 1.0000 IMM-2 Influenza Immunization .90607 .98875 PN-6 Initial antibiotic selection for CAP in Immunicompetent pt .96552 1.0000 SCIP-Inf-2 Prophylatic Antibiotic Selection for Surgical Pts .99074 1.0000 SCIP-Inf-3 Prophylatic Antibiotics discontinued 24 hrs after surgery end time .98086 1.0000 SCIP- Inf-9 Urinary catheter removed on post op day 1 or 2 .97059 1.0000 SCIP- Card2 Surgery patients on beta blocker therapy prior to arrival who received a beta blocker during perioperative period .97727 1.0000 SCIP-VTE-2 Surgery patients who received appropriate VTE prophylaxes within 24 hours prior to surgery to 24 hours after surgery .98225 1.0000 Per August 13, 2013 Federal Register FY 16 Outcome Measures 40% Measure ID Description Achievement Threshold Benchmark CAUTI Catheter Associated Urinary Tract Infection .801 .000 CLABSI Central Line Associated Blood Stream Infection .465 .000 SSI Surgical Site Infection Colon Abdominal Hysterectomy .668 .752 .000 .000 Mort-30-AMI AMI 30 day Mortality rate .847472 .862371 Mort- 30-HF HF 30 day Mortality rate .881510 .900315 Mort- 30-PN PN 30 day Mortality rate .882651 .904181 PSI-90 Complication/patient safety for selected indicators (composite) .622879 .451792 Per August 13, 2013 Federal Register FY 16 Patient Experience of Care 25% Description Floor Achievement Threshold Benchmark Communication with Nurses 53.99 77.67 86.07 Communications with Doctors 57.01 80.40 88.56 Responsiveness of Hospital Staff 38.21 64.71 79.76 Pain Management 48.96 70.18 78.16 Communication about Medicines 34.61 62.33 72.77 Hospital Cleanliness & Quietness 43.08 64.95 79.10 Discharge Information 61.36 84.70 90.39 Overall Rating of Hospital 34.95 69.32 83.97 Per August 13, 2013 Federal Register 30 Day Risk-Standardized Mortality Rate Calculation = Measure (AMI, X HF, PN) National Facility Expected Deaths Crude Rate Facility Predicted Deaths This is 30 days post admission: the majority of these may be post discharge. 14 HF Mortality Formula Numerator & Denominator Description The measure cohort consists of admissions for Medicare Fee-for-Service (FFS) and Veterans Health Administration (VA) beneficiaries aged 65 years and older discharged from non-federal acute care hospitals or VA hospitals, respectively, having a principal discharge diagnosis of heart failure (HF). The hospital-specific risk-standardized mortality rate (RSMR) is calculated as the ratio of the number of "predicted" deaths to the number of "expected" deaths, multiplied by the national unadjusted mortality rate. The "denominator" is the number of deaths expected on the basis of the nation's performance with that hospital's case mix. The "numerator" of the ratio component is the number of deaths within 30 days predicted on the basis of the hospital's performance with its observed case mix. It conceptually allows for a comparison of a particular hospital's performance given its case mix to an average hospital's performance with the same case mix. Thus, a lower ratio indicates lower-than-expected mortality or better quality, and a higher ratio indicates higher-than-expected mortality or worse Source: http://www.qualitymeasures.ahrq.gov/content.aspx?id=35573 quality. Heart Failure Risk Adjustments The final set of risk-adjustment variables included: Demographics Cardiovascular Comorbidity Source: http://www.qualitymeasures.ahrq.gov/content.aspx?id=35573 •Age-65 (years above 65, continuous) •Male •History of percutaneous transluminal coronary angioplasty (PTCA) •History of coronary artery bypass grafting (CABG) •Congestive heart failure •Acute myocardial infarction (AMI) •Other acute/subacute forms of ischemic heart disease •Chronic atherosclerosis •Cardio-respiratory failure and shock •Valvular and rheumatic heart disease •Hypertension •Stroke •Renal failure •Chronic obstructive pulmonary disease (COPD) •Pneumonia •Diabetes and diabetes mellitus (DM) complications •Protein-calorie malnutrition •Dementia and senility •Hemiplegia, paraplegia, paralysis, functional disability •Peripheral vascular disease •Metastatic cancer, acute leukemia, and other severe cancers •Trauma in the last year •Major psychiatric disorders •Chronic liver disease Efficiency Definition • Medicare Spending Per Beneficiary (MSPB) – Captures total Medicare spending per beneficiary, relative to a hospital stay, bundling hospital sources (Part A) with post acute care (Part B). – Bundles the cost of care delivered to a beneficiary for an episode of care across the continuum of care. • 3 days prior to admission and 30 days post discharge • Indexed by the discharging hospital regardless of who provides services in the 3 days prior and 30 days post – The first performance period ended 12/31/13 for FFY 15 and the second one started 1/1/14 for FFY 16. Medicare Spending Per Beneficiary Lists percent of spending for the hospital vs. state and national statistics by provider type. 18 By MDC for each Hospital Lists all 25 MDCs with state and national averages Three additional reports along with the summary on Qnet: index admission file, beneficiary risk score file and an MSPB episode file. 19 Facts about FY 14 VBP Bonuses Penalties % With Bonuses US Average .24% US Average -.26% US Average 45% $1.1B at play in FY 14 VBP LESS REIMBURSEMENT A total of 1,451 hospitals got paid less in FY 14 vs FY 13 for VPB. 1,231 got paid more. Largest Decrease 1.14% Change from FY 13 VBP Largest increase .88% Comparison of State Performance Value Based Purchasing: FFY 14 Average Bonus Average Penalty % of Hospitals w Bonus Florida .25% -.25% 52% Georgia .23% -.30% 45% Alabama .27% -.25% 54% South Carolina .25% -.22% 54% Tennessee .22% -.23% 37% National Average .24% -.26% 45% State Value Based Purchasing Timelines Payment Reform READMISSIONS REDUCTION PROGRAM Reform Readiness Amount at Risk 2013 2014 2015 2016 2017 Readmission Program (a) 1.0% 2.0% 3.0% 3.0% 3.0% Value Based Purchasing (b) 1.0% 1.25% 1.5% 1.75% 2.0% 1.0% 1.0% 1.0% 5.5% 5.75% 6.0% Hospital Acquired Conditions (a) Total Potential Rates at Risk 2.0% 3.25% a: Represents a worst case scenario and a ceiling of the maximum penalties b: Represents a withhold of payment that can be earned back based on quality metrics Readmission Reduction Program  Higher than expected admissions for – Heart failure – Acute Myocardial infarction – Pneumonia – And recently added Total Hip and Knee  Current being paid on 2% Year 2. Performance periods are in play for FFY 16-18. Readmission Timelines Comparison of State Performance Readmissions: FFY 14 Average Penalty % of Hospitals w NO Penalty Florida -.35% 19% Georgia -.30% 30% Alabama -.35% 18% South Carolina -.42% 40% Tennessee -.52% 16% National Average -.38% 34% State Tennessee Hospital Performance: FFY 14 Penalized on VBP Bonused on VBP Value Based Purchasing Readmissions Penalized on Readmissions For FFY 2014 Georgia Hospital Performance: FFY 14 Penalized on VBP Bonused on VBP Value Based Purchasing Readmissions Penalized on Readmissions Florida Hospital Performance: FFY 14 Penalized on VBP Bonused on VBP Value Based Purchasing Readmissions Penalized on Readmissions Alabama Hospital Performance: FFY 14 Penalized on VBP -1.00% Readmissions Penalized on Readmissions Bonused on VBP Value Based Purchasing 0.00% -0.50% 0.00% -0.20% -0.40% -0.60% -0.80% -1.00% -1.20% -1.40% -1.60% 0.50% 1.00% South Carolina FY 14 Hospital Performance Penalized on VBP Bonused on VBP Value Based Purchasing Readmissions Penalized on Readmissions Payment Reform HOSPITAL ACQUIRED CONDITIONS Reform Readiness Amount at Risk 2013 2014 2015 2016 2017 Readmission Program (a) 1.0% 2.0% 3.0% 3.0% 3.0% Value Based Purchasing (b) 1.0% 1.25% 1.5% 1.75% 2.0% 1.0% 1.0% 1.0% 5.5% 5.75% 6.0% Hospital Acquired Conditions (a) Total Potential Rates at Risk 2.0% 3.25% a: Represents a worst case scenario and a ceiling of the maximum penalties b: Represents a withhold of payment that can be earned back based on quality metrics Hospital Acquired Conditions: Final Rule for FFY 2015 First Domain 35% : PSIs Performance Period: 7/1/11-6/30/13 Second Domain 65%: CDC Performance Period: CY 2012 & 2013 Pressure Ulcer Rate CLABSI Foreign Object Left in Body CAUTI Iatrogenic Pneumothorax Rate Postoperative Physiologic and Metabolic Derangement Rate Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate Accidental Puncture and Laceration Rate 1% Medicare Reimbursement at risk: All or none penalty Lowest performing quartile will be penalized HAC Domain Weightings DOMAIN 1: 35% DOMAIN 2: 65% Pressure Ulcer Rate: 8.33% CLABSI: 32.5% Foreign Object Left In Body: 8.33% CAUTI: 32.5% 36 Proposed Future Measures: Domain 2 First Domain: PSIs Second Domain: CDC Pressure Ulcer Rate CLABSI Foreign Object Left in Body CAUTI Iatrogenic Pneumothorax Rate SSI Following Colon Surgery (FY 2016) Postoperative Physiologic and Metabolic Derangement Rate SSI Following Abdominal Hysterectomy (FY 2016) Postoperative Pulmonary Embolism and Deep Vein Thrombosis Rate Methicillin-Resistant Staphylococcus Aureus (MRSA) Bacteremia (FY 2017) Accidental Puncture and Laceration Rate Clostridium Difficile (FY 2017) Questions? Thank you.