ABQAURP: The Road from Volume to Value
Our first goal is for 30% of all Medicare provider payments to be in alternative payment models that are tied to how well providers care for their patients, instead of how much care they provide—and to do it by 2016. Our goal would then be to get to 50% by 2018.
—HHS Secretary Sylvia Burwell, HHS Blog, January 26, 2015
One of the earlier steps along this road from volume to value was the Inpatient Prospective Payment System enacted in 1983, which bundled payments for inpatient care episodes into Diagnosis Related Groups (DRGs). The tremendous complexity of the DRG system, however, probably encouraged as much documentation and coding proliferation as it did efficient care.
The CMS Innovation Center created by the Affordable Care Act has been piloting Accountable Care Organizations (ACOs) since 2012, through the Pioneer ACO model. The premise is that the value of care can be improved by incentivizing providers to decrease cost through sharing in savings (or losses) while maintaining quality. Much of what was learned from Pioneer ACOs has been incorporated into the Medicare Shared Savings Program, which houses most of the Medicare ACOs today. So far, very few ACOs have elected the two-sided model, where they can earn or lose money based on performance, selecting instead the one-sided model, where savings but not losses are shared with the ACO.
Separately, the CMS Innovation Center continues to trial various models to shift more risk and reward to ACOs through “Next Generation ACOs.” These newer ACO models can allow “first dollar” shared savings or losses, rather than utilizing a minimum savings rate (MSR) or minimum loss rate (MLR) before the ACO feels any financial impact. The maximum percentage of savings or losses shared with the ACO is higher as well, potentially up to 100%. Though ACO models have previously been based on a FFS payment system or variations thereof, the Next Generation ACO model contains an option for “full capitation,” where the ACO receives a per member per month (PMPM) payment and all providers are paid out of that amount.
CMS has data to show that ACOs can save money, but there is a participation problem because it has been, after all, voluntary. The solution? Make it mandatory. Enter the Comprehensive Care for Joint Replacement (CJR) model.
Beginning April 1, 2016, CJR will require hospitals in 67 geographic areas to participate in a hybrid of the Bundled Payment for Care Improvement (BPCI) and Accountable Care Organization models. Hospitals performing total hip and knee replacements will be measured on both quality metrics and the cost of the total episode of care, including post-acute services for up to 90 days after initial hospital discharge.
On the outpatient side, the implementation by CMS of 29 device-dependent Comprehensive Ambulatory Payment Classifications (C-APC) in 2015 merged a facility’s outpatient reimbursement for certain services into a single payment rather than a piecemeal one. The change served two purposes: 1) simplify and decrease overall patient out-of-pocket payments and 2) encourage hospitals to provide the most cost-effective care. Furthermore, CMS expected this policy to lead hospitals to look at not only internal process efficiency opportunities, but also external efficiencies, such as negotiating with suppliers to decrease the cost of devices and implants.
CMS took another step forward with this idea on January 1, 2016, making observation services a new C-APC. Previously, hospitals received approximately $1,235 (APC 8009) for providing observation services for at least eight hours following (most commonly) a level 4 or 5 ED visit. Hospitals also received Part B facility fees for tests and procedures performed during that observation visit. Currently, the C-APC for observation (C-APC 8011) pays approximately $2,275, but separate Part B tests and procedures are no longer separately reimbursable to the hospital during an observation stay. Think of all the expensive diagnostics performed for the observation patient: MRIs, nuclear stress tests, CTs, echoes, etc. Bundling all these services into a single fixed payment (like a DRG payment for inpatient care) is changing the business of observation, rewarding efficiency rather than volume of service. Hospitals will encourage physicians to consider how many of those tests are really needed and which can be safely performed at an outpatient diagnostic center, or not at all.
Physicians are also feeling the shift from volume to value. Though primary care physicians have experienced some income growth with the increased emphasis on primary care services, more of their income will be at risk if quality and cost metrics are not met. The CMS Physician Value Based Payment Modifier rewards physicians for low overall costs and high quality. High quality is in large part based on keeping patients with chronic conditions out of those expensive inpatient hospitalizations. The reality, however, is that few physician groups have been able to reach the “high quality, low cost” tier, and few have found themselves in the “low quality, high cost” tier. The vast majority of physicians are in one of the middle tiers. Congress is fixing that problem with the Merit-Based Incentive Payment System (MIPS), which beginning in 2019 will subject physicians to much larger payment adjustments based on value calculations and alternate payment model participation.
So the fun continues; surely there will be more to come. As physician advisors, we are in a unique position to understand the clinical, financial, and regulatory aspects of the healthcare system. One of our jobs is to help our peers navigate this important road from volume to value.
Read this, and other relevant articles, on the ACPA Blog at http://www.acpadvisors.org/ACPA-Blog.
Unlock the Answers to Better Health Care!
Now is the time to gain an in-depth understanding of what is required to be a successful practitioner under the Affordable Care Act. Understand what is being measured and how to demonstrate improved patient outcomes and health care practice value. Be among the leaders who have a winning ACA-era practice.
At the conclusion of the conference, attendees will be able to:
- Identify quality measures to accurately reflect practitioner outcomes
- Realize coding and documentation challenges for optimal reimbursement
- Evaluate various evolving payment methodologies for the reimbursement of quality metrics, patient experience, and efficiency
- Define areas of risk from the delivery of care, billing, and documentation perspectives in a changing medical-legal environment
- Demonstrate how Physician Advisors are playing a significant leadership role in the drive for cost-effective health care
- Recognize the role of the Accountable Care Organization in improving care quality for both inpatient and ambulatory settings
- Describe emerging roles and opportunities for physician leaders and practical steps to prepare for leading change
- Categorize new steps to improve population health, one patient and one community at a time
- Demonstrate the value of the patient-centered medical home
- Analyze the impact of inadequate and fragmented behavioral health care services
ABQAURP’s 39th Annual Health Care Quality
& Patient Safety Conference
Friday, April15, 2016 – Tampa, FL
Register now: www.abqaurp.org
Join us in sunny Florida for this exciting spring event. Network with your peers and visit with these industry leaders:
Health Care Quality and Management (HCQM) Certification
ABQAURP is pleased to collaborate with the National Board of Medical Examiners® (NBME®) in the administration of the HCQM certification exam. ABQAURP is dedicated to assuring a high quality certification process with definable standards; the NBME involvement reinforces that dedication. Together, we consult on the planning, development, analysis, and scoring of the certification exam, bringing examinees an exam experience based on a vast array of knowledge and expertise.
Go Further with Sub-Specialty Certification – New Physician Advisor Sub-Specialty
Individuals who perform, or are involved in, any of the following activities have the opportunity to enhance their existing clinical credentials by obtaining sub-specialty certification when successfully completing the HCQM exam (or any time after).
Additional certifications are available in the following categories:
- NEW! Physician Advisor (physicians only)
- Transitions of Care
- Managed Care
- Patient Safety / Risk Management
- Case Management
- Workers’ Compensation
The Health Care Quality and Management Certification and the Physician Advisor Sub-Specialty Certification are endorsed by the American College of Physician Advisors (ACPA). To learn more, visit www.acpadvisors.org.
“National Board of Medical Examiners®” and “NBME®” are registered trademarks of the National Board of Medical Examiners.