LAN
Update
March 9, 2016
12:00 – 1:00 pm ET
HCP LAN
Health Care Payment Learning & Action Network
Episode Bundles: Why It Matters and
What Purchasers Can Do Now
WELCOME
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Anne Gauthier
LAN Project Leader,
CMS Alliance to Modernize
Healthcare (CAMH)
SESSION OBJECTIVES
Learn About
What the LAN is and how it can help purchasers get better value for
the tremendous amount of money they’re spending on health care
Clinical Episode Payment (CEP) work group recommendations on
episode payment for elective joint replacement
Employer innovations and entry points for episode payment for
elective joint replacement
Engage
Ask your questions of the presenters
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AGENDA
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Time (ET)
Topic
12:00 – 12:10 pm
Opening remarks, LAN overview
12:10 – 12:20 pm
Why the LAN is important to purchasers, CEP workgroup
overview
12:20 – 12:35 pm
How Walmart is engaging in CEP
12:35 – 12:50 pm
How mid-size employers are engaging in CEP—The Alliance’s
“Quality Path”
12:50 – 1:00 pm
Questions and Next Steps
OUR GOAL
Goals for U.S. Health Care
2016
30%
In 2016, at least 30% of
U.S. health care payments
are linked to quality and
value through APMs.
2018
50%
In 2018, at least 50% of
U.S. health care
payments are so linked.
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Adoption of Alternative Payment Models (APMs)
These payment reforms are expected to
demonstrate better outcomes and lower
costs for patients.
Better Care, Smarter Spending, Healthier People
LEADERSHIP GROUPS
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LAN has established 7 groups with varying purposes
Guiding Committee
Work Groups
APM FPT
APM Framework &
Progress Tracking
Payer
Collaborative
CEP
PBP
Clinical Episode
Payment
Population Based
Payment
Affinity Groups
CPAG
PAG
States
Consumer & Patient
Purchaser
State Engagement
CONTACT US
We want to hear from you!
Website
www.hcp-lan.org | www.lansummit.org
Twitter
@Payment_Network
Linked-In
https://www.linkedin.com/groups/8352042
YouTube
http://bit.ly/1nHSf1H
Email
[email protected]
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8
Spring LAN Summit
April 25-26, 2016
Sheraton Hotel
8661 Leesburg Pike
Tysons, VA 22182
 Registration Now Open!
 Presentations Planned from Work
Groups on Work Products
 Call for Sessions Open!
(due March 18th)
https://www.lansummit.org
CEP PURCHASER REP
Barbara Wachsman
Member, CEP Work Group
Chair, Pacific Business Group
on Health (PBGH)
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WHY IS THE LAN IMPORTANT TO PURCHASERS?
• Shape: Unique opportunity to influence national payment policies as the
healthcare sector transitions away from fee-for-service
• Accelerate: Partner with providers and health plans to improve outcomes while
lowering costs
• Align: Harmonize payment approaches among private and public purchasers
with consistent signals to providers
• Leverage: Use ”real world” experience to effect broader health system change
• Learn: Hear about other innovative purchasing initiatives in the private and public
sectors
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WHAT IS A “CLINICAL EPISODE”?
Clinical episode or episode of care is a series of
temporally continuous healthcare services related
to the treatment of a given spell of illness or
provided in response to a specific request by the
patient or other entity.
CLINICAL EPISODE PAYMENT
Clinical episode payment is a bundled payment
model that considers the quality, costs, and
outcomes for a patient-centered course of care
over a longer time period and across care settings.
PURPOSE OF EPISODE PAYMENT
Episode Payment Can:
Create incentives to break down
existing siloes of care
Promote communication and
coordination among care providers
Episode Payments Reflect How
Patients Experience Care:
A person develops symptoms or has
health concerns
He or she seeks medical care
Improve care transitions
Providers treat the condition
Respond to data and feedback on the
entire course of illness or treatment
The patient receives care for his or
her illness or condition
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WHY JOINT REPLACEMENT?
Commercial Market
Hips
Knees
Number of procedures (2011) 645,000
306,000
Cost (2015)
$11,327 - $73,987 $11,317 - $69,654
• Duplication of exams, imaging, and
other diagnostics
• Lack of coordination between
Quality and patient experience
hospital and post-acute care
• Inconsistent use of standardized
protocols
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WORK GROUP CHARGE
Provide a Directional Roadmap to:
Promote Alignment:
Design Approach
Alignment Approach
Providers
Health
Plans
Consumers
Purchasers
States
Find a Balance Between:
Alignment/consistency and
flexibility/innovation
Short-term realism and long-term aspiration
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WHAT IS THE GROUP RECOMMENDING?
Design Elements
1. Episode Definition
2. Episode Timing
3. Patient Population
4. Services
5. Patient Engagement
Elective & appropriate
total knee replacement
due to osteoarthritis
30 d. pre-procedure to
90 d. post-discharge
& meet episode
definition
requirements
Broadest-possible pool
of patients,
adjusted for
risk/severity
All services need for
joint replacement
procedure
Tools for shared
decision-making,
assessing function &
care path, with
transparent
cost & care info
6. Accountable Entity
7. Payment Flow
8. Episode Price
Physician-level clinician
preferred with caveats
Retrospective
reconciliation
with upfront FFS
2 years historical cost
(assuming appropriate
# of cases in 2 years);
Balance with
regional/provider data
9. Type and
Level of Risk
Upside and
Downside Risk
10. Quality Metrics
Clinical Outcomes,
PROMs, and
quality scorecards
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OPERATIONAL CONSIDERATIONS
Stakeholder Perspectives: Ensure that the voices of all stakeholders –
consumers, patients, providers, payers, states and purchasers – are heard
in the design and operation of episode payments
Data Infrastructure: Understand and develop the systems that are needed
to successfully operationalize episode payment
Regulatory Environment: Recognize and understand relevant state and/or
federal regulations, and understand how they support or potentially
impede episode payment implementation
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IMPLEMENTING CEP
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Sally Welborn
Cheryl DeMars
Senior Vice President,
Global Benefits
President and CEO
Wal-Mart Stores, Inc.
The Alliance, Employers
Moving Health Care Forward
WA L M A R T ’ S M O T I VAT I O N
Provide competitive benefits program
Ensure appropriate care
Improve quality of care for all
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WHAT WALMART IS DOING IN CEP
• Multi-payer alignment
around 16 conditions with
Arkansas Health Care
Payment Improvement
Initiative
• Direct Contracts with
Centers of Excellence for
specific procedures or
conditions
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ARKANSAS PAYMENT IMPROVEMENT
INITIATIVE’S INTEGRATED MODEL
Episode
Episode
Episode
Episode
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Coordinated Multi-payer Leadership
▪ Consistent incentives and standardized reporting rules
and tools
▪ Change in practice patterns as program applies to many
patients
▪ Enough scale to justify investments in new infrastructure
and operational models
▪ Motivate patients to play larger role in their health and
health care
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ARKANSAS - HOW EPISODES WORK FOR PATIENTS AND
PROVIDERS (1/2)
1
Patients and
providers
deliver care
as today
(performance
period)
Patients
seek care and
select providers
as they do
today
2
3
Providers
submit claims as
they do today
Payers
reimburse for all
services as they
do today
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HOW EPISODES WORK FOR PATIENTS AND PROVIDERS (2/2)
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Calculate
incentive
payments
based
on outcomes
after close of
12-month
performance
period
1
5 Payers calculate
average cost per
episode for each
PAP1
▪6 Based on results,
▪
▪
Review claims from
the performance
period to identify a
“Principal
Accountable
Provider” (PAP) for
each episode
Compare average
costs to
predetermined
“commendable” and
“acceptable” levels2
▪
providers will:
Share savings: if
average costs below
commendable levels
and quality targets
are met
Pay part of excess
cost: if average
costs are above
acceptable level
See no change in
pay: if average
costs are between
commendable and
acceptable levels
Appropriate cost and quality metrics based on latest and best clinical evidence, nationally recognized clinical guidelines and local considerations
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FIVE INITIAL EPISODES LAUNCHED IN JULY 2012 (1/2)
Details
Total Hip/ Knee
replacement
Perinatal
(non-NICU1)
Ambulatory URI
Acute-, post-acute
heart failure
ADHD
▪
Care from 30 days before to 90 days after the surgical
procedure
▪
▪
▪
Prenatal care, delivery and postnatal care for the mother
40 weeks before to 60 days after delivery
Excludes neonatal care
▪ Includes colds, sore throats, sinusitis
▪ Care from initial consultation to 21 days after
▪ Excludes inpatient hospitalizations and surgical
▪
procedures
Care from hospital admission for heart failure to 30 days
after discharge
▪
Care over 12-month period, including all ADHD services
and pharmacy costs (with exception of initial assessment of
patient)
NOTE: Episode and health home model for
adult DD population in development.
1 Neonatal intensive care unit
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DIRECT CONTRACT CENTERS OF EXCELLENCE
Direct Contracting for Spine Surgeries and certain Heart Surgeries
Goals
• Improved quality of care
• Aligned incentives through prospective bundled pricing – negotiated
in advance for Evaluation or Surgery
Direct Contracting through Employers Centers of Excellence
(PBGH) for Joint Replacement
Goals
• Same goals as Walmart Direct Contracting
• PLUS, efficiencies and alignment due to collaborating with other
employers
CEP
Clinical Episode
Payment
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EMPLOYERS CENTERS OF EXCELLENCE
• Walmart shared methodology with PBGH
• Travel surgery program with highest
quality facilities using bundled pricing
methodology
• PBGH contracts with administrator
• PBGH determines the Centers based on
quality indicators. They negotiate and hold
the contracts
• Employer contracts with PBGH to participate
– Turnkey approach
CEP
Clinical Episode
Payment
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PANEL SPEAKER
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Cheryl DeMars
President and CEO
The Alliance, Employers
Moving Health Care Forward
About The
®
Alliance
> Not-for-profit, employer-owned cooperative
> Move health care forward by controlling costs,
improving quality and engaging individuals in
their health
> Founded in 1990 by 7 employers; now over 240
employers
• 100,000 employees and family members
• 26 counties in WI, IA and IL
• $750,000,000 in health care/yr
Two-Tiered Value Proposition
> We help self-funded employers manage the
total cost of their health benefit plan
• Broad network of providers coupled with information to help
consumers choose best value
• Data, programs, services to improve workplace population
health
> We unite employers as purchasers of health
care in the same market to drive change
• Value-based purchasing
• Payment reform
The QualityPath to Higher Value
1. Focus on common, expensive elective
procedures
2. Evaluate individual physicians + hospitals on
important quality measures and clinical
processes
3. Use available market strategies to recognize
and reward providers that meet standards
4. Elevate the standard of care in our region
What is QualityPath?
> Designation of physician + hospital pairs
– Quality criteria of importance to purchasers and
consumers – outcomes and important clinical
processes
– WI, northern IL, eastern IA
> High-cost cardiac and ortho procedures
– Knee and total hip replacement
– CABG
What is the Value Proposition?
> Facilities and surgeons receive recognition
and gain market share, resulting in overall
revenue increase.
> Employers can feel confident employees are
receiving high-quality care and have lower
expense on per-procedure basis.
> Patients receive high-quality care, have no
out-of-pocket expenses*, and receive a
warranty.
*Some modifications needed for HSA Plans
What is Required of each
Stakeholder?
> Facilities and surgeons share data, implement
standard care processes and agree to a bundled
payment and warranty.
> Employers change their benefit plans to include
significant incentives for patients to choose
QualityPath providers.
> Patients may need to switch systems and/or travel
and need to comply with care plan.
– Patient Experience Manager provides support for consumers
throughout the process
QualityPath Key Criteria
>
>
>
>
Contribute results to a Patient Registry
Participate fully in Public Reporting
Decision Supports for appropriate imaging
Shared Decision Making between patients
and their doctor
> Patient Reported Outcomes
> Discussion of Future Care Needs
> Disclosure of all industry payments
Results (launch Jan, 2015)
> Designated hospitals and surgeons
– 5 designated facilities; 11 surgeons
– 15 applicants
> Bundled payment and warranty
– Prospective payment with withhold for warranty
> Employer enrollment
– 33 employers (13.6% of eligible employers)
> 8,516 employees (17.8%)
Results (launch Jan, 2015)
> Consumer use and experience
– 3 completed cases thus far (episode closed,
patient back to work)
– 3 surgeries complete, but episode still open
– 20 cases in the queue
> Missed opportunities
– 25 cases eligible but had surgery at non QP
provider
– 222 cases among employers who did not enroll
Next Steps
> On-going monitoring, evaluation and
improvement of current program
– Maintenance of designation
– Continued and ongoing education and
promotion – to employers, to employees
> Add new procedures - CT and MRI
> Continue to seek buy-side partners
PANEL Q&A
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ENGAGE, LEARN, AND ACT
The LAN will only succeed with robust stakeholder engagement across the field
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Access Resources
Submit Comments
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