Future of Physcian Payments

Presented by
David J. Zetter,
PHR, CHCC, CHCO, CPC, CPC-H, PCS, FCS, CHBC
Presented by
David J. Zetter,
© 2013 Zetter HealthCare
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The Future of Physician
Payments

• No copyright claimed on government material or
information. This material is designed to offer basic
information. The information presented is based on
the experience, training and interpretation of the
author. Although the information has been carefully
researched and reviewed for accuracy and
completeness, neither the author or PAHFMA accept
any responsibility or liability with regard to errors,
omissions, misuse or misinterpretation.
2
Disclaimer
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State of Healthcare
Recent Observations
Capital Hill Update
Emerging Opportunities
Accountable Care Models
ACO Flaws?
Initiatives
The Patient, Reforms, Trends
Predictions
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Takeaways

 Healthcare Reform/Transformation
• 24.4% 2013 Medicare rate cut if Congress doesn’t act by Jan 1,
2014
• 201 2“doc fix” cost $24.4B, now $26B
• MedPAC recommendations to realign fee-schedule to support
primary care and ACOs, bundled payments, capitated models &
shared savings programs
• MedPAC SGR recommendation slides – http://tiny.cc/u58qv
• March 2013 MedPAC recommendations (10 chapters) improving
equity & efficiency of payments, improving quality & integrity
• Delays in elements of ACA Legislation/Regulation
• Employer mandate
• Verification of consumer claims of no health insurance
• Scale back oversight of earnings
• Delayed electronic notices ‘til 2015
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State of Healthcare

 National & Global Efforts
• Create efficiencies, increase access & “stabilize rocketing
costs” (sure, we know better… NOW)
• As compared globally, we ranked #1 on costs, but 20-40th
on outcomes
 Beginning the Shift to Paying for Reporting, Quality &
Value
• 423 known ACOs active in 49 states (Jan 2013 cumulative to
date)
• Hospital-sponsored: 189
• Physician group-sponsored: 202
• Payor-sponsored: 32
• 106 ACOs added to shared savings program (Jan 2013):259
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State of Healthcare

 Highmark launching accountable care network in
Pennsylvania rewarding physicians for efficient &
effective patient-centric care and quality outcomes
 Latest effort to repeal SGR formula calls for 0.5% pay
hike & 5 yrs stable payment increases
 Two Pioneer ACOs failed to save money, but one was;
Pioneer – promising, but unproven due to Medicare’s
extremely low budget. Claim all 32 report success
w/quality metrics.
 Seven Pioneer ACOs leaving program and going to
Shared Savings Program model.
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Recent Observations

 Another two Medicare ACO participants leaving
accountable care entirely
 Amplified movement away from FFS towards Shared
Savings
 Increased momentum and security for care
coordination strategies and more pressure for
aligning incentives and creating efficient care models
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Recent Observations

 All payers seem to be moving in direction of quality
and value vs just volume
 UHC sees accountable care work more than doubling
to $50B by 2017
 CMS moving toward patient-care management
reimbursement – 605 pg proposed rule
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Recent Observations

These possible changes will have an effect on
reimbursement down the road
 Republicans urge unions to back ACA repeal effort
 GOP continues push for individual mandate delay
 Senator Mark Begich introduces bill delaying
employer mandate for two years
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Recent Observations

 Meaningful Use Stage 2
• Final Rule for MU Stage 2 – Complete, but delayed to 2014
 White House
• Heavily engaged in HITECH progress w/ frequent panels & town
halls lately
• REC, HIE, Beacon, Standards, Interoperability, etc.
 FDA, ONC & FCC
• FDA Safety and Innovation Act, S 3187
• Prescription Drug User Fee Amendments Act of 2012
• Requires the HHS w/i 18 months to publish report “that contains a
proposed strategy & recommendations on an appropriate, risk-
based regulatory framework pertaining to health IT, incl. mobile
medical applications, that promotes innovation, protects patient
safety and avoids regulatory duplication
 Energy & Commerce Committee – 2/14/13
• SGR: Data, Measures and Models; Building a Future Medicare
Physician Payment System
• http://energycommerce.house.gov/hearing/sgr-data-measures-and-models-building-future-
medicare-physician-payment-system
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Capital Hill Update

 EHR Meaningful Use Stages 2 & 3
 Preventing payment reductions
 Regional Extension Centers
 Health Information Exchanges
 ACOs
 Accountable Care
 Payment Bundling
 Medical Home Models
 Patient-Centered Medical Home
 Communities of Health
 EHR-enabled Clinical Research
 Primary Care Reimbursement Increases
 Proactive preparation – Best practices!
…..Navigating Payment & Delivery Reform
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Emerging Opportunities

“There is pressure to increase pay to primary care
doctors. That money is going to come from
somewhere, and some of it is probably going to come
from us. We’re the highest-paid providers in the
healthcare economy, and we have no friends in this
game. If we want to preserve our income
opportunities in the future, we will need to become
more creative and much more capable of managing
risk.”
John Cherf, MD, MPH, MBA
AAOS 2012 Annual Meeting
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Emerging Opportunities

 EHR Meaningful Use
• Over $27B available w/ no cap (protected in Medicare Trust
Fund)
• As of May 2013 – over 264,292 care providers registered for MU
• 120,002 Medicaid registrants
• 4,299 hospitals
• Over 102,000 care providers achieving incentive payments
• Over $12.7B in incentives paid to EPs & hospitals already
• Audits are fast and furious
• Know what to expect to provide to validate attestation
• Meaningful Use Stage 2 Overview Chart – http://bit.ly/z0MHUC
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State of ARRA & HITECH

 EHR Certification
• 6 ONC-ATCB certifying entities
 CCHIT remains industry gold standard
 Regional Extension Centers
 Operations underway at various levels of execution
 Find your local REC
http://www.healthit.gov/providers-professionals/regional-extension-centers-recs
 Health Information Exchanges
 Operations underway at various levels of operation
 “Revised” BAAs required September 23, 2013
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State of ARRA & HITECH

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The Evolution
…essential building blocks for a sustainable healthcare system

 Electronification / Health IT & EHR Utilization
 Interoperability (what’s this?)
 Coordinating Care (with Care Team)
 Best Practices
 Quality Improvement / Outcomes Improvement
 Patient Education
 Patient Satisfaction (the future? DUH!)
 Cost Containment
 Cost Reduction (to increase Shared Savings)
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Accountable For What?

 Single Provider ACO: Usually an integrated delivery
system that receives payment for a population and
takes on the responsibility of providing accountable
care
 Multiple-Provider ACO: Two or more entities have
partnered to provide accountable care for a population
 Insurer ACO: A regional or national insurer who
organizes providers so that the insurer bears the
burden of assuring accountable care
 Insurer-Provider ACO: The insurer and the provider are
equal partners in providing accountable care
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ACO Organization Types

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Accountable Care Models
In the past year, the numbers of ACOs
sponsored by physician groups has almost doubled.
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106
189
202

1. ACOs will prompt physicians to alter their care
delivery. “
Many proponents of ACOs believe that doctors
automatically will begin to provide care different from
what they have offered in the past.
Physicians need to be reeducated and retrained to
provide care in an ACO, but even after that effort, the
result would be uncertain.
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ACO “Flaws”

3. ACOs will save significant amounts of money.
The Congressional Budget Office estimated the
savings from CMS' 32 Pioneer ACOs would be about
$1.1 billion over five years, according to the authors.
This is "insignificant," as Medicare's budget is $468
billion. Commercial organizations will provide
"relatively small reductions" in healthcare spending, if
any.
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ACO “Flaws”

2. Change in patient behavior is not necessary.
Providers in an ACO are responsible for their patients'
care costs, regardless of where they receive care — a
flaw the authors find unfair.
ACOs hold caregivers accountable without requiring
patient accountability. How can this work?
Patients may not comply with treatments suggested
by physicians and can also choose to not share their
medical history or claims data with the organization,
which can be a detriment to the ACO responsible for
their care.
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ACO “Flaws”

 Every major carrier has an ACO-type plan
 Aetna, Blue Cross Blue Shield, CIGNA, UHC, and
Anthem/Wellpoint
 Various approaches utilized across the board
 Shared Savings, Shared-Risk, Partial Capitation
 Real world example – CIGNA
 22 programs in 13 states; 270,000 customer/patients
 Primary care focus, open to multi-specialty, IDNs, physician-
hospital organizations
 Must meet quality improvement and cost reduction criteria to
receive benefits
 Acquisitions changing the landscape
 Aetna & Coventry (what next?)
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Private Payer Initiatives

 Medicare Shared Savings Program (MSSP)
 Initial 27 Medicare ACOs announced in April 2012
 Next round of Medicare ACOs slated for July
 Pioneer ACO Model
 32 chosen to improve patient care and save $1.1B over five
years (4 have decision requirement pending)
 Rapid movement from Shared Savings to population-based
payment model back to Shared Savings
 Offers heightened risk/reward with more flexible payment
methods
 Advance Payment ACO Models
 Initial 5 organizations named in April 2012; Not necessarily for
this world
 Upfront payments awarded to design care coordination
infrastructure
*All programs found at http://innovations.cms.gov
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Medicare ACO Initiatives

 9 of 32 hospitals and health systems involving bundled
payments may quit the three-year “pioneer”
demonstration
 4 or more may switch to a second ACO demonstration
that carries less risk.
 History: The experimental ACO programs, which now have more
than 250 hospital participants, are intended to save Medicare as
much as $940 million through 2015 by reducing rehospitalizations
of seniors with diabetes, heart failure and other chronic diseases.
Participating hospitals were projected to gain as much as $1.9
billion in bonus payments.
The Pioneer hospitals and affiliated physician groups agreed to a
three-year plan to forgo traditional fee-for-service payments,
where hospitals charge for every procedure, and instead get a
fixed monthly stipend for individual patients.
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Medicare ACO Initiatives

 Combining care processes with patient expectations
 Improve patient adherence, satisfaction & enrollment
 Care processes: Evidence-based team plan for:
 Surgical procedure, care transition, preventive care, cost
containment, low readmission
 Utilizing EHR, PHR, and case management software
 Example: EHR clinical extracts & HIE for specific reporting
requirements (home health, skilling nursing) CMS data
 Beacon Community Model – information systems supporting
care processes matched with performance goals exist
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Integrating the Patient

 Patient Engagement, Empowerment & Management
Strategies
 Produce analytics on patient/ consumer population
 Sample Functionality
 Phone & “text” reminders
 eMail calendar invites
 Customized (automatic) patient education materials that
incorporate video and “smart” self-help tools
 Robust Patient “CRM” –type Strategies & Functionality
 Analytics comparing and contrasting outcomes & quality
reports
 eMail marketing tools & “smart” patient education materials
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Managing the Patient

 The transition from fee-for-service to risk-based
reimbursement is inevitable
 The most important clinical components of managing
risk-based payments are patient care coordination &
population care management – with robust use of data
aggregation, analytics & shared information
 Innovation will fuel health IT adoption and usability
 Payment reform will fuel health IT usability as well
• Pay for quality & value, not for “clicks”
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Payment Reform Trends

 Consumers will drive change as they become
responsible for higher percentage of cost & tools and
incentives become readily available
 Government will likely follow rather than lead the
transition to risk-based payments as we are witnessing
 Macro variables like economic growth and the ability of
the federal government to borrow capital will greatly
impact the transition to risk-based payment, but to
varying degrees.
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Payment Reform Trends

 Ensure 3-5 year Operating or Growth Plans
 If you are approached by a local Accountable Care Plan
or ACO…
 Financial incentives to join ACO?
 Strategic incentives to join ACO?
 Access to bi-directional data/ interoperability?
 Legacy vs. Innovation
 Standards-based interoperability
 What data requirements are they requesting?
 Binding?
 Non-binding?
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Practice or Community Strategy

 Assess EHR, interoperability & overall technology
infrastructure
 Assess beneficiary patient volume; patients can opt
in/out voluntarily
 Engage peers, associations, payers, employers & health
systems in your community
 Identify CMS, private payer or combined care
coordination/ACO opportunities
 ACOs, Accountable Care & “At-Risk” communities are
forming today around the country
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Accountable Care Positioning

 Pinpoint patients for clinical teams at the point of care
 Engage & educate patients to hold them accountable
for outcomes
 Counseling and coordination of care is paramount
 Identify reporting requirements which will include a key
focus on patient satisfaction, screenings and
assessments
 Utilize Health IT to increase the velocity of coordination
in your community by placing a focus on the
importance of EHRs and meaningful use
 Develop care management resources to monitor
delivery and ensure that patients receive appropriate
follow-up care
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Accountable Best Practices

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Insurance Exchanges
Source: Robert Glus, FSA, MAAA
Conrad Siegel Actuaries
Initial Offerings

 Exchanges
• States will continue to innovate
• ACOs and other integrated systems will begin to offer
coverage
 Health Care Reform
• States will be primary drivers
• Payment and delivery system reform
 Patients
• More engaged; savvy consumers
• Defined contribution and employee choice will become the
norm
• Consumer driven plan designs
• Evolution of price transparency tools
 HIT
• Lynchpin for all other reforms
• Will make health care more digital, measurable, and mobile
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Predictions Beyond 2013

 Provider Risk Sharing
• Away from FFS -> ACOs/Medical Homes (P4P)
• Provider Consolidation
 Limited Network Plans
• Direct contracting for some services (limited reimbursements)
 Employer Plans
• Must align incentives
• Plan Design, Premium-Sharing, Eligibility
• More wellness programs & health standards expectations
• Increases in Employer Self-Insured
 Additional delays in ACA implementation
 Hospital reimbursement to decrease
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Predictions Beyond 2013

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For Follow-up & Further Questions
Contact:
David J. Zetter,
717.691.7100
Email: djzetter@zetter.com
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