Transcript Document

Future of Health Care
Reimbursement and Why it Matters
Maryland AAHAM
October 16, 2009
Traci La Valle
Assistant Vice President, Financial Policy
Agenda
 National Health Care Environment
 Maryland Hospital Payment System
 Maryland Potentially Preventable Complications (PPC)
and Potentially Preventable Re-admissions (PPR)
21#
2
Main Points
 Urgent U.S. health care coverage and cost concerns are
driving change in Maryland
 Health care provider reimbursement models are
changing—the pace of change will accelerate
 The best providers and organizations will thrive
What does this mean for me, and what
will I do differently?
31#
3
Drivers of Future Change in National Health
Care Payment Policy
 Federal budget deficit
 Population demographics
 New technology
Pressure on
Medicare
trust fund
 Public opinion—congressional mandate to act
National Health Reform
41#
4
Projected Federal Budget Deficit
51#
5
Medicare Trust Fund Likely To Be Bankrupt By
2017
Historical
Estimated
160%
140%
120%
100%
80%
60%
40%
20%
0%
1990
1995
2000
2005
2010
Beginning of January
2015
2020
Source: 2008 Annual Report of The Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical
61#
6
Insurance Trust Funds
Numbers of Beneficiaries (in Millions)
Medicare Demographics: Projected Number of
Beneficiaries
77
80
70
70
61
60
53
50
40
46
42
40
30
20
10
0
2001
(14%)
2005
(15%)
2010
(15%)
2015
(17%)
2020
(19%)
2025
(21%)
2030
(22%)
Year (percent of population)
Source: The Henry J. Kaiser Family Foundation
71#
7
Medicare Demographics
Workers per Beneficiary
1965
1990
2015
2040
2065
2080
4.0
3.4
2.9
2.0
1.9
1.9
81#
8
Population Demographics
 Aging population
 Living longer
 More chronic conditions*
 Advances in technology*
*Health care system can make a difference
91#
9
Breakthroughs in Medicine Lead to
Longer Lives…
Average Life Expectancy in Years
Chart 1: Average Life Expectancy in the United States
1940 – 2002
80
75
70
65
60
55
1940
50
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
Source: Centers for Disease Control and Prevention, National Vital Statistics Reports, vol. 53, no. 6, November 10, 2004
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Chronically ill are More Likely to be
Hospitalized, and for Longer Periods of Time
Percent of the Population with Inpatient Hospital Stays,
3.5
by Number of Chronic Medical Conditions
2001
30%
3.0
25%
2.5
20%
2.0
15%
1.5
10%
1.0
5%
0.5
0%
0.0
0
1
2
3
4
Number of Chronic Medical Conditions
Percent of Population
Average Inpatient Days
Percent of Population
35%
5+
Avg. Inpatient Days
Source: Adapted from Partnership for Solutions, Medicare Expenditure Panel Survey, 2001, Chronic
Conditions: Making the Case for Ongoing Care, September 2004
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11
People are Dissatisfied with the Health Care
System
America is Dissatisfied
6 in 10 Americans rate the health care system as fair or poor
Excellent
4%
Very Good
10%
Don't know
1%
Poor
31%
Good
25%
Fair
28%
Source: Employee Benefit Research Institute, 2006.
121#
12
“The single most important
thing we can do to put this
nation back on a sustainable
long-term fiscal course is slow
the growth rate of healthcare
costs.”
Peter Orszag
Director
Office of Management and Budget
White House Summit on Fiscal Responsibility
February 23, 2009
131#
13
A Single New Technology can Add Billions to the Cost
of Caring
Projected Annual Costs of Recent Technology Related
Medicare Coverage Expansions
Technology
Medicare Costs
Drug-eluting coronary stents
$2 – 4 B
ICD for sudden death prophylaxis
$1 – 3 B
PET for Alzheimer’s disease
$1 B
Verteporfin for macular degeneration
$750 M
Left-ventricular assist devices
$1 – 7 B
Source: Adapted from Neumann PJ, Medicare National Coverage Decisions: How is CMS Doing? Presented at National
141#
14
Health Policy Conference, February 2005
Health Care Reform: Likely Consensus Around Senate
Finance Bill
 Expand coverage to 91% of legal residents
 “Pay or play” for employers and individual mandate
 Premium subsidies for low- and moderate income
 Non-profit co-operatives individuals join to purchase
insurance
151#
15
Financing Health Care Reform
 Spend
 Expand coverage to 29 million: $829 billion
 Medicaid expansion: $345 billion
 Subsidies: $461 billion



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
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
Cuts and additional revenues
Medicare inflation payments to hospitals: $155 billion
Other Medicare payments to hospitals: $41 billion
Tax high-end insurance plans: $201 billion
Penalties for no-coverage: $27 billion
Additional savings: $317 billion
Other revenue: $196 billion
CBO total: $81 billion in savings over 10 years
161#
16
Financing Health Care Reform
 Little “Real” Reform in National Reimbursement
Mechanisms
 Re-admission rates ($8.4 billion)
 Post-acute care bundling ($17.8 billion)
 Value-based purchasing ($12.1 billion)
171#
17
What Does Reform Mean for Hospitals?
 Cuts of $155 billion over 10 years
 Additional cuts or threats to uncompensated care
funding
 Newly insured patients
 New efficiency measures
 Re-admissions penalties
181#
18
What Does Reform Mean for you?
 Opportunities for innovation
 Re-admissions
 Acute/post-acute care coordination
 Physician/hospital care coordination
191#
19
What Does Reform Mean for you?
 Coverage for more people
 Fewer people in “desperate” situations
 Lower insurance premiums
 Greater Medicare stability
 Faster use of electronic medical records
201#
20
Main Points
 Urgent U.S. health care coverage and cost concerns
are driving change in Maryland
 Health care provider reimbursement models are
changing—the pace of change will accelerate
 The best providers and organizations will thrive
211#
21
The Health Services Cost Review Commission’s
(HSCRC) Authority
 The HSCRC has a four-part mandate to:
 Review, set, and approve hospital rates
 Maintain the solvency of efficient & effective
hospitals
 Publicly disclose the cost and financial position of
hospitals
 Collect information detailing transactions between
hospitals and firms with which their trustees have a
financial interest
221#
22
Maryland Initiatives
 All payors
 Aligned with national trends
 HSCRC allows more refined approach
 More provider input
 Our costs cannot grow faster than nation
231#
23
“Traditional”
Technology
Contemporary
Technology
Next Round
Technology
X-Ray Machine
CAT Scanner
CT Functional
Imaging with PET
$175,000
$1,000,000
Open Surgery
Instrument Set
Laparoscopic
Surgery Set
$10,000
Scalpel
$20
$2,300,000
Robotic Surgical
Device
$15,000
$1,000,000
Electrocautery
Harmonic Scalpel
$12,000
$30,000
© 2002 University HealthSystem Consortium
241#
24
Quality-Related Payment Methodologies
251#
25
Pay for Performance
Source: Premier
261#
26
Pay for Performance
Source: Premier
271#
27
Pay for Performance
Source: Premier
281#
28
National Hospital-Acquired Conditions Policy
 Required present on admission (POA) coding
October 1, 2007
 Medicare reduced case payment for 12 hospital-acquired
conditions
 HAC must have POA of ‘N’ or ‘U’
 Maryland is exempt from this Medicare policy
291#
29
Medicare Non-Coverage of Surgical Errors
 Effective October 5, 2009
 No-coverage and no-pay for erroneous surgery
 Wrong patient
 Wrong procedure, or
 Wrong body part
 MedLearn Matters #6634
301#
30
Quality Initiatives:
National vs. Maryland Programs
Maryland
 Maryland focused
 All payors
 All acute hospitals
 HSCRC mission
 APR-DRGs
 Piggyback on existing data
 Revenue-neutral to state
Other Programs
 National/generic
 Single payor
 Network hospitals
 Contractually driven
 Lack of risk adjustment
 New data demands
 Designed to extract
revenue from system
311#
31
HSCRC Quality-Related Payment
Methodologies
 Quality-Based Reimbursement (QBR) or P4P
 In second measurement year (CY 2009)
 Relatively small payment impact
 Potentially Preventable Complications (PPCs)
 Measurement to begin July 1
 Payment impact not yet determined
 Potentially Preventable Readmissions (PPRs)
 HSCRC goal is to approve methodology by
December 2009
321#
32
Data Sources and Evaluation Logic
 Quality-Based Reimbursement
 Relies on data actively abstracted from medical
record. A person reviewing the record can consider
and apply reasons to include or exclude a case.
 Select set of evidence-based process measures
 PPCs and PPRs
 Administrative data “passively” pulled from HSCRC
data set
 Exclusions and groupings based on coding
 3M logic is detailed takes time to learn
331#
33
HSCRC Quality-Related Payment
Methodologies
 Hospital performance is indexed against statewide
average
 Performance on individual cases contribute to overall
score
 Amount of reward or penalty depends on performance
compared to all other Maryland hospitals
 Expect statewide performance to improve each year—
341#
34
the curve gets tougher to beat!
PPCs and PPRs
351#
35
Main Points
 Urgent U.S. health care coverage and cost concerns are
driving change in Maryland
 Health care provider reimbursement models are
changing—the pace of change will accelerate
 The best providers and organizations will thrive
361#
36
PPCs and PPRs
 Potentially Preventable Complications (PPCs)
 Approved June 3
 Data collection begins July 1, 2009
 Payment impact July 1, 2010
 Potentially Preventable Readmissions (PPRs)
 In development; HSCRC goal is to approve
methodology by December 2009 (!!!)
371#
37
Potentially Preventable Complications
 3M developed PPC logic
 Complications that occur while the patient was in the
hospital and are reasonably preventable
 Identification of a PPC is based on diagnosis codes,
procedure codes, length-of-stay, and date of
procedures
 Cases and PPCs excluded based on other
diagnoses, other procedures, and length-of-stay
381#
38
PPC v27 On-Line Access
www.aprdrgassign.com
User ID - MDHosp
Password - aprdrg401
PPC v27 Definition Manual
Health Care Financing Review
Spring 2006 Article on PPCs
Methodology Overview
PPC v27 Calculator
391#
39
Types of Cases Excluded
 HIV-related
 Oncology
 Transplants
 Burns
 Multiple, significant trauma
 Neonates
 Drug and alcohol dependence, LAMA
401#
40
PPC Examples
 PPC 1: Stroke and intracranial hemorrhage, identified
when a subarachnoid hemorrhage is a secondary
diagnosis and not POA
 PPC 05: Pneumonia, identified if pneumonia is a
secondary diagnosis not POA, but only if the LOS > 2 days
 PPC 18: Major GI complications with significant bleeding,
requires secondary diagnosis not POA, for example,
esophageal hemorrhage AND a transfusion procedure 4 or
more days after major surgery
411#
41
Potentially Preventable Complications
 PPC logic applied to administrative data reported to
HSCRC in data set
 Statistical approach; no individual case review or
determination
 Documentation of conditions POA and diagnoses during
stay is critical
 Diagnoses that drive severity of illness may also drive
421#
42
identification of a PPC
PPC Payment Methodology
 Each hospital’s PPC rate is evaluated against the
statewide average
 An amount of the annual update will be withheld and
redistributed according to position on the index
431#
43
What’s a PPC Worth?
 3M estimated dollar amount of additional charges
resulting from each PPC
 Based on regression analysis
 Cases can have multiple PPCs
 Additional charges per PPC are additive
441#
44
PPC Description
Resource
Use
Tvalue
Cases
1
Stroke and Intracranial Hemorrhage
$13,066
38.60
828
2
Extreme CNS Complications
$12,051
30.37
644
3
Acute Pulmonary Edema and Resp.
Failure without Vent
$5,721
40.42
5257
4
Acute Pulmonary Edema and Resp.
Failure without Vent
$20,064
60.36
898
56 Obstetric Hemorrhage with Transfusion $2,137
4.28
385
57 Ob. Lacerations w/o Instrumentation
$273
1.09
1532
60 Major Puerperal Infection and Other
Major Ob. Complications
$94
0.16
289
62 Delivery with Placental Complications
$525
0.88
265
Statewide amounts based on FY 2008 data
451#
45
Determining Hospital Rank on the
Index
Resource PPC “Credit or
Use
Debit”
Discharges at
Risk
PPCs
Observed
PPCs
Expected
1
47,228
98
76.6
$13,066
$279,612.40
2
43,931
32
27.5
$12,051
$54,229.50
3
45,625
355
449.3
$5,721
($539,490.00)
Sum all PPCs
Total Additional Resource Use/Savings ($205,648.90)
461#
46
Statewide Index
471#
47
Strategies for Success
 Start with high dollar, high volume PPCs
 Review cases, service lines, DRGs where you do well
and where you have opportunity to improve
 Does diagnosis code reflect what was really
happening? UTI or asymptomatic bacteriuria
 Does POA coding reflect what’s documented or what
was POA?
 Codes that increase SOI may also affect PPCs
 Quality, Finance, Clinical, and HIM Leadership working
together to understand issues and practices
481#
48
Potentially Preventable Re-admissions
 3M software and logic
 Return hospitalizations that may have resulted from
deficiencies in process of care before or after discharge,
or in coordination of services between the hospital and
outpatient setting
 Re-admission diagnosis related group (DRG) reasonably
related to initial admission DRG
 Calculate readmission rate to single hospital or at all
Maryland hospitals
491#
49
PPR: Clinically-Related Medical Re-admissions
 Continuation or recurrence of the initial admission, e.g.,
re-admission for diabetes following initial admission for
diabetes
 Acute decompensation of chronic problem—not the
reason for initial admission, e.g., re-admission for
diabetes following initial admission for acute MI
 Acute medical problem as consequence of care provided
in the initial admission, e.g. re-admission for UTI 10 days
after hernia repair. Infection likely related to the use of
foley catheter during initial admission.
501#
50
PPRs: Clinically-Related Surgical Admission
 Re-admission to address a continuation or a recurrence
of the initial problem, e.g., appendectomy following an
initial admission for abdominal pain and fever
 Re-admission to address a complication resulting from
initial admission, e.g., drainage of a post-operative
wound abscess following initial admission for bowel
resection
511#
51
PPR Logic
 Exclusions for discharge disposition and certain
diagnoses
 Risk adjusted for reason for admission and severity of
illness
 Re-admission interval (15-day or 30-day) TBD
 Since re-admissions are potentially preventable, must
compare rates to severity-adjusted average
 You will be compared to performance at all other
Maryland hospitals
521#
52
Main Points
 Urgent U.S. health care coverage and cost concerns are
driving change in Maryland
 Health care provider reimbursement models are
changing—the pace of change will accelerate
 The Best Providers and Organizations Will Thrive
531#
53
What does this mean for me and what will I
do differently?
 Continue to work with internal leadership
 Continue to beat the curve!
541#
54
Traci La Valle
Assistant Vice President, Financial Policy
410-379-6200
[email protected]
551#
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