Justin DiSanto, Senior Management Consultant - Clinical Payer Specialist, WG Consulting, shares insights from HIMSS 2017.
Pre-conference Symposium: Succeeding in a Value Based World: Policy Developments & Core Competencies
The transition from fee-for-service to pay-for-value payment models in healthcare is one of the greatest challenges the U.S. healthcare system faces, but are provider organizations administratively prepared to make the change? This question was debated in a HIMSS 2017 pre-conference symposium. The session explored the administrative infrastructure issues organizations should be prepared to address when moving to an alternative payment model, and how early adopters are mitigating the challenges presented with these changes.
We are faced with a number of health policy changes in 2017 including:
- A new administration and new policy makers
- The Affordable Care Acted may be repealed and replaced. The biggest disruptors will be potential changes to the individual mandate and Medicaid expansion
- We expect major Medicaid reform under this administration. Changes are likely to include less federal funding, more state control, fewer participants and higher costs for those in the program
- This administration has vowed to cut drug costs and has made statements supporting negotiating directly with drug companies on prices for drugs covered by Medicare
- The current legislative authority for The Prescription Drug User Fee Act (PDUFA) expires in September 2017. Without new legislation, the FDA will no longer be able to collect user fees for future fiscal years to fund the human drug review process
How will the anticipated significant changes to the Affordable Care Act affect value-based care?
- The answer is still yet to be determined but it is certain that a drive towards achieving the third leg of the triple aim, in reducing cost, will continue momentum towards value-based care and policies that support it
- To that end the rise of Alternative Payment Models (APMs) aim to align payments more closely with better and less costly care models utilizing any combination of approaches;
- lower-cost care settings
- team-based care models
- care coordination
- better support for social services and non-medical interventions that can reduce complications and medical costs
- Overall, APMs aim to provide more flexibility in how providers can deliver care, but also come with more provider accountability (and risk) for results and costs
- In evaluating current healthcare reimbursement models we see 4 payment Categories (25% of Payers are already engaged in at least some form of a category 3 or 4 model)
- Category 1- Fee for Service (FFS): There is no link to quality or value
- Category 2 - Pay for Performance – FFS linked to quality and/or value
- Category 3 – ‘Alternate Payment Models’- Built on FFS architecture, payments linked to a patient not specific services
- Category 4 - Population Based Payments – Payments for totality of care of a patient population (Accountable Care Organizations [ACOs], Patient-Centered Medical Homes [PCMH])
- Models to watch in 2017: ACOs, Oncology Care Models, The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
Session - Risk-Sharing in a Value-Based World
This session presented insights from industry stakeholders representing three distinct segments: a prominent health system, a large physician provider group and a solo practitioner physician group. Panelists discussed the impact of changing payment models on their organization’s business operations and the strategies they are employing in response to these challenges.
- Value-based payment models can only be successful if the data to adapt and improve the organization is available
- What’s most important to value-based models? DATA, DATA, DATA
- There is an incredible power in putting claims data in the hands of providers so that they can understand the costs related to a patient (and how to make improvements)
- The Electronic Health Record (EHR) is an endless pit for data. Providers feed in a great deal of data but can’t get analyses or reports back to help them improve quality
- Claims and clinical data must be linked to succeed at value-based care and risk sharing. Right now, no one is doing it well or consistently
- Linking claims, clinical, pharmacy and lab data is akin to achieving the impossible and yet it’s the best way for organizations to assess their populations to improve care
- Health data is only as good as its analysis and implementation. Today’s providers and health systems lack the necessary data analytic tools and population health tools
Session - Designing and Implementing Successful Alternative Payment Models
This session described how adequate data and analyses can enable Alternative Payment Models (APM) to be designed in ways that improve the quality of care for patients and reduce or slow the growth in healthcare spending without creating inappropriate financial risk for physician practices, hospitals, and other providers.
- “It is unrealistic to expect providers to improve quality or reduce spending if the payment system does not provide adequate financial support for their efforts”
- “It is unrealistic to expect patients & purchasers to pay more or differently without assurances that quality will be improved, spending will be lower, or both”
- Value based payment models that are built upon FFS are structured to fail
- In order for a value based payment model to work it needs to be a win-win-win-win (Primary Care Physician (PCP), Specialist, Hospital, Payer)
Session - Achieving the 3rd Leg of the Triple Aim: Cost Savings
Many discussions regarding alternative payment models focus on the reduction of patient care costs. The burden of administrative costs to execute these programs is great. Realizing the Triple Aim will require managing both sides of the equation.
- Hospitals see pharmacy costs as one of the most difficult costs to control and one that keeps climbing
- Employers have become a major driving force behind cutting costs and are squeezing health systems by pulling insurers strings to squeeze more from contracts
- Physicians are the only true revenue stream for a hospital so keeping them happy is the #1 goal for most health systems, so a balance is needed
- Understanding and analyzing population health within a system is key to cutting costs, improving quality and achieving positing outcomes
- Hospitals are hiring population health analytic groups to help and even outsourcing actuaries to support
Closing Keynote - Medicare-Related Alternative Payment Models: An Update
This session provided an update on the status and performance of existing Medicare-Related Alternative Payment Models, such as the recently mandated Comprehensive Care for Joint Replacement (CJR), Bundled Payments for Care (BPC), NextGen ACOs, and the recently finalized Merit Based Incentive Payments System (MIPS).
- Goals for The Centers for Medicare & Medicaid Services (CMS)
- Tie 30% of all Medicare provider payments to value through alternative payment models by the end of 2016 (achieved March, 2016); 50% by 2018
- Tie 85% of all Medicare FFS payments to quality and value by 2016; 90% by 2018.
Look out for future more in depth analysis and perspectives on each of the above mentioned Medicare-Related Alternative Payment Models or give us a call to discuss how your organization might be impact and what strategies might help make these models work for you rather than against you.