CJR – What Does it Mean to Me?

Brian Hickman, CPA, Partner Camille Lockhart, CPA, Partner bhickman@bkd.com clockhart@bkd.com

30% by the end of 2016

HHS goal of transitioning from FFS Medicare payments to Advanced

Payment Models (APMs)

50% by the end of 2018

0

10

20

30

40

50

60

70

80

90

100

2011 2015 2016 2018

FFS APMs

Accountable Care BPCI Primary Care

Transition Medicaid and

CHIP Acceleration

Models

Speed Adoption of Best

Practices

ACOs Model 1 Advanced Primary Care Initiative

Reduce Avoidable Hospitalizations

State Innovation Models

Beneficiary Engagement Model

Advanced Payment ACOs Model 2

Comprehensive Primary Care

Initiative

Financial Alignment

Incentive for Medicare and

Medicaid

Frontier Community Health

Integration

Community Based Care Transitions

ACO Investment Model Model 3

FQHC Advanced Primary Care

Practice

Strong Start for Mothers and Newborns

Health Care Innovation Rounds

Health Care Action and Learning

Network

Next Generation ACO Model 4 Graduate Nurse

Education

Medicaid Prevention of

Chronic Diseases

Health Plan Innovation Initiative

Innovative Advisors Program

Pioneer ACO Transforming Clinical Practice

Medicaid Emergency Psychiatric

Demonstration

Million Hearts CJR

The changing health care market: CMMI Innovation Models

DEFENSE: Strategy for Protecting Your Margins

Increase efficiency in

providing care

Improve outcomes

TRIPLE AIM

Improve the patient

experience

Bundled Payments vs. Fee-For-Service AN EPISODIC VIEW

Episode noun. 1. a course of treatment related to a single

illness or condition.

Fee-for-service adjective. 1. separate payments are made to

each provider based on services provided during the episode.

Bundled payment adjective 1. a single payment is made or

payments are adjusted based on a single amount during the

episode or group of episodes.

Comprehensive Care for Joint Replacement Payment Model (CJR) 42 CFR Part 510 [CMS-5516-P]

• 60-day public commenting period on proposal ended Sept 8th

• Numerous comments • Effective April 1, 2016 • Key Changes

2% to 3% discount New targets for fractures 67 MSAs 3 month delay Stop loss reduced Quality measures

MSA Selection 67 MSAs

Missouri Hospitals Located in Select CJR MSAs

BARNES-JEWISH WEST COUNTY HOSPITALBATES COUNTY MEMORIAL HOSPITALBELTON REGIONAL MEDICAL CENTERBOONE HOSPITAL CENTERCAMERON REGIONAL MEDICAL CENTERCENTERPOINT MEDICAL CENTERCHRISTIAN HOSPITAL NORTHEAST-NORTHWESTDES PERES HOSPITALLEE'S SUMMIT MEDICAL CENTERLIBERTY HOSPITALMERCY HOSPITAL JEFFERSONMERCY HOSPITAL ST. LOUISMERCY HOSPITAL WASHINGTONNORTH KANSAS CITY HOSPITALRESEARCH MEDICAL CENTERSAINT FRANCIS MEDICAL CENTERSAINT LUKE'S EAST LEE'S SUMMIT HOSPITAL

SAINT LUKE'S HOSPITAL OF KANSAS CITYSAINT LUKE'S NORTHLAND HOSPITALSOUTHEASTHEALTHSSM HEALTH DEPAUL HEALTH CENTERSSM HEALTH SAINT LOUIS UNIVERSITY HOSPITALSSM HEALTH ST. CLARE HEALTH CENTERSSM HEALTH ST. JOSEPH HEALTH CENTERSSM HEALTH ST. JOSEPH HOSPITAL WESTSSM HEALTH ST. MARY'S HEALTH CENTERST. ALEXIUS HOSPITALST. ANTHONY'S MEDICAL CENTERST. JOSEPH MEDICAL CENTERST. LUKE'S HOSPITALST. MARY'S MEDICAL CENTERTRUMAN MEDICAL CENTER LAKEWOODTRUMAN MEDICAL CENTER-HOSPITAL HILLUNIVERSITY OF MISSOURI HEALTH CARE

Episode Definition - General

Episodes are triggered by hospitalizations of eligible Medicare FFS beneficiaries discharged with diagnoses:

MS-DRG 469: Major joint replacement or reattachment of lower extremity with major complications or comorbidities

MS-DRG 470: Major joint replacement or reattachment of lower extremity without major complications or comorbidities

Episodes include: Hospitalization and 90 days post-discharge All Part A and Part B services, with the exception of certain excluded services that are clinically unrelated to the episode

Episode Definition – Services

Included • Physician services • IP hospitalization (including

readmissions) • IP Psych Facility • LTCH • IRF • SNF • Home Health • Hospital OP services • Independent OP therapy • Clinical lab • DME • Part B drugs • Hospice

Excluded • Acute clinical conditions not arising

from existing episode-related chronic clinical conditions or complications of the LEJR surgery

• Chronic conditions that are generally not affected by the LEJR procedure or post-surgical care

Payment and Pricing – Risk Structure

• Retrospective, two-sided risk model with hospitals bearing financial responsibility • Providers and suppliers continue to be paid via Medicare

FFS • In Year 2, actual episode spending will be compared to

episode target prices • If in aggregate target prices are greater than spending, hospital

may receive reconciliation payment • If in aggregate target prices are less than spending, hospitals

would be responsible for making a payment to Medicare • Opportunities for Hospitals to share both Risk and Gain with

CJR Collaborators

Payment and Pricing – Target Price • CMS intends to establish target prices for each

participant hospital prior to start of each performance period

• Includes 3% discount to serve as Medicare’s savings • Based on blend of hospital-specific and regional

episode data, transitioning to regional pricing. • Essentially competing against yourself in the

beginning

2/3 hospital 1/3 regional

Year 1 & 2 1/3 hospital

2/3 regional

Year 3 100%

regional

Year 4 & 5

Program Waivers

Skilled Nursing Facility CJR would waive the SNF 3-day rule for coverage of a

SNF stay following the anchor hospitalization beginning in Year 2

Patients must be transferred to SNFs rated 3-stars or higher

Beneficiaries must not be discharged prematurely to SNFs

Differences in the use of post-acute care (PAC)...services stood out as key drivers of variation in Medicare spending. If there were no variation in PAC spending, variation in total Medicare spending would fall by 73%

Variation in Health Care Spending: Target Decision Making, Not Geography;

Institute of Medicine; 2013

“

”

What Metrics Are Hospitals Looking At?

What makes a difference?

Public data

Staffing & services

Willingness to collect & share data

Patient Experience

What do I Focus On? Public Data – 5-Star Ratings

Quality Measures

Short-stay moderate to severe pain

Short-stay new or worsened

pressure ulcers Long-stay falls

with injury

Overall star rating

Reported vs. adjusted RN and clinical staffing

Survey deficiencies

Build Your Data • Need information to allow you to analyze cost,

payments, length of stay, outcomes, discharge site, type of discharge, etc. for each: • Diagnosis code/illness • Physician • Referring provider • Comorbidity or chronic illness

• Readmission rates • Return to community rates

Working for the Weekend – Am I Built for Transitional Care?

Acute Care Transfers Send to a different hospital so the referral

source won’t find out Implement RTA protocols as early warning

indicators

Admissions Approach

Waiting for the phone to ring Friday-Monday?

Clinical capabilities – nursing, rehab & pharmacy

M-F Day Shift Friday-Monday?

Patient Experience: What do “transitional care” patients want?

Avoid uncertainty in transition, care plan, expectations

Private rooms “My” nurse

Choice (dining, waking, sleeping,

bathing)

Segregation from patients with behavioral

issues/dementia Quick recovery

QUESTIONS?

Brian Hickman, CPA, Partner Camille Lockhart, CPA, Partner bhickman@bkd.com clockhart@bkd.com