TOTAL PATIENT REVENUE: Experiment, or Our Future? March 25, 2013.

TOTAL PATIENT REVENUE:

Experiment, or Our Future?

March 25, 2013

HISTORY & BACKGROUND OF TPR

MHA Statewide Education Program on TPRMarch 25, 2013

TPR Overview• “TPR” = Fixed Total Gross Regulated Patient Revenue

– TPR revenue is 100% fixed regardless of:• Inpatient / Outpatient mix• Increases or decreases in volumes• Changes in case mix

– Since the hospital’s revenue base is fixed, TPR encourages cost effective delivery of care

• Annual Adjustments to TPR Revenue Base– HSCRC-approved Update Factor– Over / Under Charges For Total Cap [One-Time]– Changes in service area population (lesser of: 25% of population growth, or

1%)– Changes in allowable uncompensated care and payor mix

• Minimum agreement for a three-year period

3MHA Statewide Education Program on TPRMarch 25, 2013

TPR Overview• The 10 TPR Hospitals Entered Into A Total Patient Revenue Agreement on

July 1, 2010– The goal of the TPR Agreement was to incentivize hospitals to provide

high quality and reduce utilization– The majority of the TPR hospitals revenue capital was established on

the FY 2010 revenue base• Transition funding based on historical volume and case mix growth• Some hospitals received additional adjustments in July 2011 to

increase the TPR budget related to the opening of new services already planned


Comparison with Charge-Per-Case [CPC]

Encourages: Care for the ill and maximizing volumes

Encourages: Wellness and cost effective delivery of care

Adjusts revenue at 85% for increases and decreases in cases and outpatient services

No adjustments for volume changes: 100% fixed--------------------------------------------Limited adjustments for population growth

Adjusts revenue for increases in case-mix (sometimes limited) and decreases at 100%

No adjustment for changes in case-mix

Positive and negative adjustments to revenue (“scaling”) related to Reasonableness of Charges (ROC) ranking

Only positive ROC-related scaling

5

Current CPC System TPR

MHA Statewide Education Program on TPRMarch 25, 2013

Methodology & StructuralConsiderations

METHODOLOGY• Incentive to transition to TPR

– Average volume growth for previous 3 years– Average case mix growth for previous 3 years

• Exemption from negative scaling• Exemption from state-wide readmission policy• Outlier cases are inclusive in TPRSTRATEGIC• Expected volume growth or decline• Program changes and CMI impact• De-regulation of services and/or addition of new services• One-day stays converting to observation• ROC projections• Market Share implications


Monitoring ComplianceFINANCIAL• Over / Under recovery of allowed TPR cap is measured at the end of each

fiscal year– Savings – Under; Dissavings – Over– Price Variances are added to/reduce the subsequent year’s revenue base on a

one-time basis• Under the TPR methodology hospitals have the flexibility to charge +/-5%

beyond the approved rates without penalty– Staff may approve extending compliance corridors to +/-10% if it is

demonstrated that this is necessary to do so for a hospital to meet its budget.– The hospital may also request further changes if necessary

• Unit Rate Price Variances are not applied, and are only used to compute potential penalties


Monitoring Compliance [cont’d]

STRATEGIC/QUALITY• Maintain market share• Disclosure of financial interest [ownership] in non-

hospital services within primary and secondary service area

• Disclosure of future acquisitions or divestures of non-hospital health services

• Maintain relative performance ranking on HSCRC quality based reimbursement and Maryland hospital acquired conditions ranking


9

Calvert Health System 5-Year Capital Plan

FORMATION OF THE MARYLAND TPR COLLABORATIVE

• April 2011 – Executive members of the 10 hospitals began to meet to discuss operating under a total patient revenue system

• Goals:– Sharing of Experiences– Learn Best Practices – Education– Data Analytics – Performance Metrics– Single Voice in Negotiating with HSCRC– Use of Consultants In Formation of Policies, Methodologies and Trending

of Financial, Utilization and Quality Data– Advocacy– CMO and Case Management Connectivity and Education

• August 2012 – Formed LLC• October 2012 – Began Negotiating with HSCRC - The Next 3-Year Agreement


Creation of the Collaborative and Strategy for Engagement


Defining and Achieving Success

Information/Data Gathering Analytics

Collaborative Priorities

1. Definition of Success—HSCRC,

Internal

2. TPR Phase 2 (the Second Three Years)

Critical AssessmentsPhysician Alignment, Care Management, Costs & Utilization,

and Quality *

SupportingAnalysis

- TPR frameworks

- Roadmaps- Assessments-Performance indicators-Supporting analytics

*Status of population health planning and IT resources will be collected as baseline measurements

Measures of Success: Recall frameworkH

SCRC

: TP

R Co

ntra

ct T

erm

s • Live within revenue constraint

• No cost shifting

• No quality erosion

Exte

rnal

Vie

w • Bend the trend

• Improve quality and delivery of care

• Support phys alignment & delivery reform

• The Waiver

Inte

rnal

Vie

w • Sustainable delivery system

• Improve quality and patient experience

• Lower use• Manage cost• Begin

transformation

Ambulatory Sensitive Conditions: Admissions & Total Charges

DIABETES UNCONTROLLED

LOWER EXTREMITY AMPUTATION

ASTHMA IN YOUNGER ADULTS

ANGINA

HYPERTENSION

DIABETES SHORT TERM COMPLICATION

DIABETES LONG TERM COMPLICATION

DEHYDRATION

URINARY INFECTION

COPD OR ASTHMA IN OLDER ADULTS

BACTERIAL PNEUMONIA

CONGESTIVE HEART FAILURE

0 500 1000 1500 2000 2500 3000

Admissions and Total Charges for Ambulatory Sensitive Conditions : ALL TPR Hospitals

$9.6M

$20.1M

$7.6M

$3.4M

$2.3M

$8.2M

$916k

$27M

$25.1M

$885k

$885k

$400k

CHF Ambulatory Sensitive Conditions by Hospital

McCready Memorial Hospital

Garrett County Memorial Hospital

Chester River Hospital Center

Dorchester General Hospital

Union Hospital of Cecil County

Calvert Memorial Hospital

Memorial Hospital at Easton

Meritus Medical Center

Carroll Hospital Center

Western Maryland Medical Center

0 100 200 300 400 500 600

Congestive Heart Failure: Admissions and Total Charges

$4.7M

$3.7M

$5.2M

$2.1M

$2.3M

$3.7M

$1.3M

$2.0M

$758k

$406k

One Day Stays: OpportunitiesCa

lver

t

Carr

oll

Ches

ter R

iver

Dor

ches

ter

GCM

H

McC

read

y

East

on

Mer

itus

Uni

on o

f Cec

il

WM

HS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1,731

3,811

469645 765

106

2,035

3,179

1,675

2,550

Days Above the Geometric Mean

Cardiology -

M (2

3899 Days)

Cardiova

scular S

urgica

l - S (

6419 Days)

GI - M

(17862 D

ays)

GI - S (

9488 Days)

Infectious D

isease

- M (1

5372 Days)

Neurology -

M (1

3201 Days)

OB/Neonatal/N

ewborn (3

4129 Days)

Orthopedic/

Muscu

loskeletal -

S (16509.55358615 D

ays)

Psychiatri

c Subtotal -

P (24508 D

ays)

Pulmonology -

M (4

0381 Days)

Pulmonology -

S (3460 D

ays)

Rehabilitation (1

2916 Days)

Urology -

M (1

4784 Days)

0

2,000

4,000

6,000

8,000

10,000

12,000

7,955.7

2,074.1

5,215.3

2,150.9

4,360.7 3,938.6

1,685.12,666.9

5,215.9

10,307.1

431.0

3,223.54,071.0

Day

s A

bove

Geo

met

ric

Mea

n

Potential Cost Savings:

10% Reduction: $3.4 M20% Reduction: $6.7 M

ALL Readmissions, by Payor

63%

5%

3%

6%

1%0%

3%0%

4%9% 2% 1% 2%

01 MEDICARE02 MEDICAID04 BLUE CROSS05 INSURANCE COMPANY06 OTHER GOVERNMENT PAYMENT07 WORKMENS COMP08 SELF PAY09 NO CHARGE12 HMO14 MEDICAID - HMO15 MEDICARE - HMO16 BLUE CROSS - NATIONAL CAPITAL AREA17 BLUE CROSS - OTHER STATE

Medicare & Medicaid = 68%

Initial Discharge Disposition of Readmissions within 1 to 7 Days

61%

13%

10% 2% 2% 2% 1%

To home or self-careTo home under the care of a home health agencyTo a nursing facilityTo another acute care hospitalTo nursing homeTo distinct on-site rehabilitation unit from acute careLeft against medical adviceTo a rehabilitation hospital or rehab. unit of another hospital

Readmission Rates by Initial Product Line, by Hospital

CALVER

T MEM

ORIAL HOSP

ITAL

CARROLL HOSP

ITAL C

ENTE

R

CHESTE

R RIVER HOSP

ITAL C

ENTE

R

DORCHESTE

R GENER

AL HOSP

ITAL O

F CAMBRIDGE

EDW

ARD MCCREA

DY MEM

ORIAL HOSP

ITAL

GARRETT C

OUNTY M

EMORIAL H

OSPITA

L

MEMORIAL H

OSPITA

L AT E

ASTON

UNION HOSP

ITAL O

F CEC

IL COUNTY

WASH

INGTO

N COUNTY HOSP

ITAL

WES

TERN M

D HEALTH

SYST

EM BRADDOCK HOSP

IT

12% 16% 18% 17% 11%15% 16% 18% 14% 18%

12% 15%20%

11% 15% 11% 16% 14% 14% 19%

10% 12%8%

13%6%

10% 13% 16% 12% 16%

GI

Cardiology

Pulmonology

Compares readmission rates across hospitals, only for the the top three product lines of Pulmonology, Cardiology and GI (41% of all readmissions by initial product line)

Care Management and Community Collaboration


Care Coordination

• Care Management re-design• ED RN Care Management• Discharge Advocacy Center• Home Health Care pilot• Skilled Nursing Facility Transitionalist• Project Red• Pharmacists in ED doing Medication Reconciliation• Hospice/palliative care expansion • Behavioral Health focus• Diabetic services in the community• PCMH• Credo briefs• Commission on Aging Transitional Care Nurse


Safety and Quality

• Medication delivery at bedside• Patient Safety Rounds• New incident reporting system• Installation of infection control surveillance

software• Quality Forum• Patient family centered care• Hospitalist re-design through LEAN


IT Infrastructure and Tools

• Implementation of risk adjusted, comparative quality software

• CRISP• Community partners given access to hospital

EMR


Protocols/Evidence-Based/Self Care

• Coleman Model• STARR initiative• Care coordination and discharge protocols• Community Health Education• IHI triple aim collaborative• Employee health risk assessment• Health system nutritional initiatives


Provider Supply

• Shore Health paying for blocks of specialist time

• Contracting with SNF’s for uninsured patients• Health system employed physicians doing

discharge f/u’s within 3-5 days • Collaboration with FQHCs• Urgent care follow up for uninsured patients• Transitional Care Program


Cost Reductions

• Reduction of implant costs• Avoided admissions• LEAN


Emergency Department Care Management

ED Care Management and Admission Avoidance

Discharge Lab Follow UpDischarge Advocacy CenterUnresulted Tests at Discharge Follow-Up FY 13

February January December November

Test: # of Patients # of Tests # of Patients # of Tests # of Patients # of Tests # of Patients # of Tests

Positive Blood Culture not on Antibiotics 1 1 1 1 1 1 0 0

Positive Blood Culture not on appropriate Antibiotics 0 0 0 0 1 1 1 1

Other 128 169 37 40 23 25 46 48

Pathology 45 45 5 5 13 13 20 21

Radiology 110 130 3 4 14 18 30 36

Positive Respiratory Culture not on Antibiotics 0 0 0 0 0 0 1 1

Positive Respiratory Culture not on appropriate Antibiotics 0 0 1 1 0 0 0 0

Positive Urine Culture not on Antibiotics 9 9 7 7 4 4 8 8

Positive Urine Culture not on appropriate Antibiotics 2 2 4 4 2 2 0 0

Positive Wound Culture not on Antibiotics 4 4 5 6 1 1 2 3

Positive Wound Culture not on appropriate Antibiotics 1 1 1 1 0 0 0 0

No Status (Screened and no intervention required) 190 394 344 766 442 945 345 705

Total Interventions 300 361 62 69 52 57 108 118

Discharge Phone Calls

Patient Total

Count Count Percent Percent

761 570 72.89% 0.51% 969

Discharge/Encounter Date

119 93 75.61% 0.81% 153

52 35 64.81% 0.00% 73

93 73 75.26% 1.03% 119

60 51 80.95% 0.00% 77

219 158 70.54% 0.45% 274

14 10 71.43% 0.00% 15

70 55 77.46% 0.00% 91

97 70 70.71% 0.00% 118

37 25 67.57% 2.70% 49

Patient CountsPatients

Completed

February Patients Attempted

Patient Contacts

Percent Count

4 187

Patients Removed

Net Patient Total

Patients Do Not Call

782

UnitTotal 97.31%

2East 96.75% 1 30 123

2Eastp 96.30% 0 19 54

3East 95.88% 1 22 97

4East 95.24% 0 14 63

4South 97.77% 1 50 224

4West 100.00% 0 1 14

5East 98.59% 0 20 71

5South 97.98% 0 19 99

5West 100.00% 1 12 37

Discharge Appointments Made

Discharge Appointments by Clerical Assistants FY13 Appointments Made

July 125

August 109

September 74

October 106

November 91

December 76

January 121

February 118

March

April

May

June

Total 820

Medicare Cost per Case for CHF, COPD, and Diabetes**

2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q30

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

170 154 127 123 120 98 104

Total CasesCHF, COPD, Diabetes Arithmetic ObservedCHF, COPD, Diabetes Arithmetic Expected

Cost

** Premier Quality Advisor

Medicare Diabetes Readmission Rate**

2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q30.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Total Medicare Readmission Rate

Medicare Expected Readmission Rate

Medicare Diabetes Readmission Rate

Medicare Diabetes Expected Readmission Rate

** Premier Quality Advisor

Medicare COPD Readmission Rate**

**Premier Quality Advisor

CREDO (Emergency Room Care Plan) Case Study

Prior ED utilization:

• March 2011 – February 2012

• # of ED visits – 46

• Total ED Charges– $40,186.78

CREDO implemented March 2012• March 2012 to February

2013• # of ED visits

– 29

• Total ED Charges– $22,796.98

Hospital Readmission Rate

Measures of Success


Inpatient Volume Information

Inpatient Case Mix Information

Inpatient Volume Information- Medicare Only

Outpatient Volume- Significant Service Groups

GPSR Adjusted for Transitional Revenue

Outpatient Revenue- Significant Service Groups

Adjusted for Transitional Payments

Revenue Information- MedicareAdjusted for Transitional Payments

Measures of Success


Key Findings - Revenue

Gross Patient Service Revenue• Total Population changes have been consistent for TPR

and Non TPR hospitals’ service areas ( 2% vs. 2%)

• Overall TPR Gross Patient Service Revenue (GPSR) has increased less than Non TPR Hospitals GPSR (9.4% vs. 10.2%)

• TPR hospitals’ GPSR per case has increased more than Non TPR Hospitals GPSR per case (17.3% vs. 11.5%)


Key FindingsVolume

– 2010-2012 TPR Hospitals’ Total Admissions and Patient Days have decreased significantly more than Non-TPR Hospital’s Admissions and Patient Days (13.2% and 8.3% vs. 6.0% and 2.0%, respectively

– TPR Hospitals’ Medicare Admissions and Patient Days have decreased significantly more than Non TPR Hospitals’ Admissions and Patient Days (10.4% and 7.9% vs. 4.2% and 0.3%, respectively)

– TPR Hospitals’ Outpatient Cases have increased compared to Non TPR Hospitals’ Outpatient Cases (ED: 9/1% vs. 8.5%, SDS, 2.2% vs 0.1%)

Case Mix– TPR Hospitals’ case mix has increased more than Non TPR Hospitals’ case

mix (2.2% vs. 1.6%)


Key Findings- QualityMaryland Hospital Acquired Conditions (MHACs)• FY 2011 Performance

– Statewide Scaling Revenue Neutral– TPR Hospitals’ Cumulative Scaling = $643,000– 7 out of 10 hospitals received positive scaling

• FY 2012 Performance (Q1-Q3 final)– Statewide Scaling Revenue Neutral– TPR Hospitals Cumulative Scaling = $2,385,000– 4 out of the top 9 hospitals are TPR hospitals

Quality Based Reimbursement (Clinical Process of Care and HCAHPS)• CY 2010 Performance

– Statewide Scaling Revenue Neutral– TPR Hospitals Cumulative Scaling = $176,000– 7 out of 10 hospitals received positive scaling


Same Hospital Readmissions as a % of Total Admissions

% Readmissions Annual Change

FY2010 FY2011 FY2012 FY2011 FY2012 Difference

ARR 9.83% 9.71% 9.40% -0.12% -0.31% -0.19%

TPR 10.50% 10.46% 9.79% -0.04% -0.67% -0.63%

Statewide 10.50% 9.69% 9.37% -0.81% -0.32% 0.49%

Source: HSCRC Nov 7, 2012 Public Meeting

TPR Contract Renewal and Future of the Collaborative


Horizon for TPR and the Collaborative • Components of the Next three year contact

– Population adjustment/ the Dynamics of Population growth in Maryland

– Shared savings– In-migration from out of area– Market share– Implications of modification to fixed/ variable factor– Implications of ARR, ODS and Update Factor – Medicaid Expansion and Insurance Exchange potential

for 3% increase in utilization (Hill Top)


Horizon for TPR and the Collaborative • Components of the Next three year contact

– Alignment of physician and hospital incentives/ pay for performance

– New services– Quality performance– Waiver modification– Measurement of Success/ Agreement on a target – Time Frame


FEE-FOR-SERVICE MOVING TO INTEGRATED CARE, NEW PAYMENT MODELS & RISK

Deliver continuous improvement in clinical cost and quality

Value-based purchasing:HACs, quality, efficiency, cuts

HAC & readmissions penalties

Shared savings

Global paymentBundled payment

Population Management• Population analytics• Care management• Financial modeling and

management• Legal• Physician integration

High Value Episodes• DRG and episode

targeting• Care models and

gainsharing• Data analytics• Cost management

High Performing Hospitals• Most efficient supply chain• Best outcomes in quality, safety• Waste elimination• Satisfied patients

TPR and ACA

• Administrative simplification

• Shared savings ACO’s• Innovation Center• (Preventable) readmissions• Reduce hospital-acquired

conditions• Reduce annual market

basket updates/adjust for productivity

Total Patient Revenue

• Simple program administer• Shared Savings Element to be

included• Innovative Care Concepts • Manage Chronic disease

populations• Improve Quality• Place Patient in the lease

costly venue to return the greatest value

• Targeted populations


Accountable Care Act Cost Saving

Garrett County Memorial HospitalKeys to Long Term Success

• 30+ Year History on TPR• Sole Community Provider; Rural Location• Fixed Population Base• Limited in/out migration • Single source for most Technical Facility Services• Non-compete philosophy for Professional Services• Primary Care Service Focus; Limited Specialty Care• Strong Community Collaboration

– Hospital, Physicians, Health Department, Home Health, Social Service Agencies, etc.

• Patient Centered Care Model


Garrett County Memorial HospitalKeys to Long Term Success

• Efficient use of hospital resources• Monitoring quality of care and standard clinical practice patterns of all physicians• Friendly, professional care delivery • Tight controls on variable expenses, i.e. pharmaceuticals and the formulary• Close communication/review of ER patients for appropriateness of admission • Patient centered care delivery model which includes family involvement and

coordination of care • Hospital management focus towards care which compliments rather than

competes with physicians, which maintains a separation of technical and professional component reimbursement

• Assisting in physician recruitment to the community• Assuring physician representation on hospital board, strategic planning, etc.


Care Coordination and the TPR Initiative

Reducing readmissions

Reducing unnecessary ED visits

More collaboration& standardization of care protocols and processesEmphasis on achieving higher targets&reduced cost per case

Increasing focus on Ambulatory Sensitive Conditions (ASCs)

Emphasis on formal disease management across the care continuum

Electronic Health Records, HIE, Telemedicine, Wireless = Connected stakeholders

Current Focus of TPR hospitals

Requires = Changed Payment Structures

#1

#2

#3

#4

#5Experience

of Care

Population Health

Per Capita Cost

“Triple Aim”

Next Phase for TPR hospitals

Six Dimensions•Physician

employment models and/or effective contract models; incentive systems operating in key areas

•Incentive systems aligned with overall performance goals and quality targets

•Primary care / specialty mix goal is defined, and complement has been achieved

•Physician leadership identifiable

Structure of hospital medical

staff

•Relevant data metrics to support cost/quality/care coordination are established and shared with physicians on a consistent basis

•Feedback from physicians indicates believability in the metrics and the measurement process; indication(s) that physicians are incorporating metrics into their practice patterns

Data

•Caregivers understand their respective roles & willing participants in the care coordination process

•Metrics in place to measure key variables associated with effective coordination

•Connectivity established to support communications across providers

Care Coordination

Six Dimensions (cont’d)

•Quality metrics have been established jointly between physicians and hospital staff

•Progress is shared with physicians and Board on a regular basis

•Feedback loop is established with physicians

•Better performing clinicians are used as mentors

•Consequential remediation program in place for habitual poor performers

Quality

•Best practices developed/adopted/disseminated/monitored

•Focused efforts to reduce variability

•Clinical service redesign and/or rightsizing underway

Cost Optimization

•High degree of mutual trust between hospital and physicians

•Model for shared savings/penalties in place and supported by physicians

•Physician leaders identified and cultivated by hospital for the next generation of physician leadership

Relationships: Hospital-

Physicians

Distinct Opportunities as a Collaborative

• Data Warehouse for quality and efficiency/Information Exchange – Chief Medical Information Officer for the collaborative

• Telehealth– Group purchase/licensing– Demonstration projects / private industry initiatives– Reimbursement models

• Professional fee billing operation: Group purchase/best practices• Midlevels: Models/best practices

– Setting-specific models (e.g. primary care office; ER; etc)• Contracts for employment/incentives• Incentive systems and relevant metrics (e.g. Emergency Room physicians,

Hospitalists)• Medicare ACO


Questions?

TOTAL PATIENT REVENUE: Experiment, or Our Future? March 25, 2013.

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