Value Based P4P 201: Shared Savings Calculation · 3/9/2015 · © 2016 Integrated Healthcare...

March 9, 2015

Value Based P4P 201:

Shared Savings Calculation

© 2016 Integrated Healthcare Association. All rights reserved. 2

Today’s session is the third in a series and focuses on

Performance Gates and TCC Specifications:

101: Value Based P4P 101

102: Worksheet Review

103: Performance Gates and TCC Specifications

201: Shared Savings Calculation

202: Resource Use Measure and Specifications

203: Full Risk Organization Methodology

Did you miss a previous webinar?

Slides and recording are available on the IHA website at www.iha.org

Value Based P4P – Webinar Series


• Background

• Calculating improvement

• Quality and optional adjustments

• Recap with PO worksheet

• Questions

Agenda


Value Based P4P Overview


Value Based P4P Design

• Performance gates

- Quality

- Total Cost of Care Trend

• Calculate share of savings

based on resource use

• Adjust share of savings for

Quality

• Sum adjusted shared

savings


Measures are Not Risk-Adjusted

• “MORE is better”

• % Outpatient Procedures in Preferred Facility

• Generic Prescribing Overall (or Therapeutic Areas)

Risk-Adjusted Measures

• “LESS is better”

• Inpatient Bed Days (or Inpatient Discharges)

• All-Cause Readmissions

• ED Visits

Appropriate Resource Use Measures


Units of Improvement Calculation

• Compares measurement year and prior year ARU

performance and translates to utilization improvement

• Compared to own prior year performance:

• How many fewer bed days, ED visits, and readmissions?

• How many more prescriptions were generic? How many more

outpatient services were performed in a preferred facility?

• Ultimately, the methodology:

• Accounts for the health risk of your PO’s members

• Reflects the size of your membership

• Calculation included in P4P ARU reports, pages 15-20


MATH: from result to improvement


Unit Costs

• Cost of a bed day, ED visit, readmission; cost differential between

brand and generic (GRX) or between preferred and non-preferred

outpatient facilities (OSU)

• Specific methodology for calculating unit costs determined by the

health plan

• P4P recommendation:

• Use actual experience for PO members

• Set prospectively

• Base on prior period


Two Special Considerations

1. Adjustment to target for Generic Prescribing measures

2. Use of small PO weighted results for POs with fewer

than 1,500 member years with a health plan


VBP4P Design: How Much is the PO’s Incentive

Payment?

Step 3 – Adjust Share of

Savings for Quality

• Same Quality Score as

used for Quality Gate

• High quality increases

share of savings

• Low quality decreases

share of savings


Optional Adjustments

ARU Attainment Adjustment

An up or down adjustment based on PO’s baseline performance on a

measure

HIGH baseline attainment INCREASES share of savings; LOW

baseline attainment DECREASES share of savings

ARU Improvement Adjustment

A “bonus” for POs that can only increase your incentive based on

how much you improved

INCREASES share of savings for GREATER improvement


How Much is the PO’s Incentive Payment?

Step 4 – Sum Shared

Savings Across Measures

• Each measure’s shared

savings can be positive or

negative

• Negative amounts offset

positive amounts

• If sum of all measures >$0,

PO earns incentive

• If sum of all measures <$0,

PO earns no incentive


• Units of improvement calculations are available in ARU

reports, as well as the PO Value Based P4P worksheets

• Summary of recommended values available in the

Appendix of the Design Document on the IHA website at

www.iha.org

Resources


Review the Worksheet from VBP4P 102


Two Special Considerations

1. Adjustment to target for Generic Prescribing measures

2. Use of small PO weighted results for POs with fewer

than 1,500 member years with a health plan


Generic Prescribing Measures

• Recommendation to adjust the target using the 25th

percentile of actual improvement observed in P4P

• Accounts for the effect of patent expirations on generic

prescribing rates

• Only applied to therapeutic areas with major patent

expirations or newly released blockbuster brands

GRX Target = PO’s Baseline Year Generic Prescribing Rate

+ 25th Percentile of PO Performance for Plan


Small PO Pooled (aka Weighted) Results

• Additional metric included in ARU reports for POs with less

than 1,500 member years per plan

• Weighted average of your own result and the result for all

small POs for the plan

• As membership increases more weight placed on own

result

• More reliable result intended for use in payment

• For example, substitute pooled result for

measurement year or baseline year result, where

applicable


Small PO Pooled Results


• PO reports and worksheets available on the Value Based

P4P Analytics Portal

• Value Based P4P Issue Brief, Design Document, and

Participant Resources available on IHA website at

www.iha.org

• Questions may be directed to [email protected]

• Thank you!

Additional Resources

http://www.iha.org/

mailto:[email protected]

Value Based P4P 201: Shared Savings Calculation · 3/9/2015 · © 2016 Integrated Healthcare...

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