10/31/2016

PREPARING FOR
THE NEXT
GENERATION OF
MANAGED CARE
CONTRACTING
Nanci Robertson, RN BSN
President - Robertson Consulting, Inc.
Doral Jacobsen, MBA FACMPE
CEO - Prosper Beyond, Inc.

DORAL JACOBSEN AND NANCI ROBERTSON DO NOT HAVE ANY

FINANCIAL CONFLICT TO REPORT AT THIS TIME.

LEARNING OBJECTIVES

Identify barriers and deal breakers for contracting arrangements

Identify various contracting methodologies payers are employing in

todays transformed healthcare environment

Determine critical practice attributes necessary for a successful

contracting arrangement

10/31/2016

AGENDA

Connecting the Dots

Todays Framework & Models
Advanced Alternative Payment Models
Setting up to Succeed

CONNECTING THE DOTS

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CONNECTING THE DOTS BIG PICTURE

Affordability Crisis
Unsustainable Costs
Aging Population

CONNECTING THE DOTS - PAYER COMMON THEMES

Government Payers

Major Commercial Carries

Employers

Triple Aim

Narrow Networks

Increasing Patient Liability

Growing Transparency & Cost Focus

Focus on Quality Measures

MACRA

Alternative Payment Models (APMs)

Your Organization

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TODAYS FRAMEWORK & MODELS

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Level of Economic Risk

Value Based Contracting Continuum

Shared Risk

Fee for
Service

Performance
Based

Bundles
Payments

Global
Payments

Shared
Savings

Degree of Provider Integration

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CMS PAYMENT FRAMEWORK

The framework situates existing and potential APMs into a series of categories.

WHERE ARE WE HEADED?

Source: Alternative Payment Model Framework and Progress Tracking (APM FPT) Work Group. Alternative Payment Model (APM) Framework
Final White Paper. Health Care Payment Learning and Action Network. 12 Jan. 2016.

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CATEGORY 1 FEE FOR SERVICE

Key Attributes

Professional and Facility services billed separately

Payment retrospective

Fee Schedules based on various methodologies and payer edit logic decreases reimbursements

Low Data Analytics Capabilities

No Integration necessary

Fundamental Drivers

The more you do = the more you make

The more highly reimbursed the code = the better to bill

Quality not a consideration

Success Factors

Negotiate increases annually

Compare contracts using Medicare as a base
Ultimate leverage is market share
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FEE FOR SERVICE THE MATH

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CATEGORY 2 PAY FOR PERFORMANCE

Key Attributes

FFS reimbursement architecture w/ added financial incentives tied to quality/efficiency

metrics

Requires formalized process/investment by healthcare team to ensure quality metrics and

cost efficiency measures are met

Minimal integration and data analytics capabilities necessary

Fundamental Drivers

Financially incentivizes and rewards providers & healthcare team to target quality/efficiency
metrics

Improves outcomes for given patient population

Potential for reduction in total medical expense

Success Factors (all in Category 1 +)

Establish realistic goals & baseline quality/cost efficiency metrics being

measured
Understand the reporting/reconciliation process; what, when, who and how
Recognize exposure for downside potential and/or withhold
Requires investment in infrastructure that can improve quality of care
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PAY FOR PERFORMANCE THE MATH

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CATEGORY 3 BUNDLES
Key Attributes

FFS reimbursement architecture w/ added financial incentives and potential penalties tied to
quality and efficiency

Performance measured compared to established target

Includes Bundle Payments (tied to procedures)

Requires moderate degree of integration and collaboration across the care

continuum and higher level of data analytics capabilities

Fundamental Drivers

Financially incentivizes healthcare team to target quality/efficiency metrics

Improves outcomes for given patient population

Establishes mutual accountability between multiple providers

Success Factors (all in Category 2 +)

Understand unit cost for the bundle

Must meet cost AND quality measures in order to access
rewards
Reduce input costs and grow volume
Care coordination across the continuum
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BUNDLES THE MATH

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CATEGORY 3 SHARED SAVINGS/RISK

Key Attributes

FFS reimbursement architecture w/ added financial incentives and potential penalties tied to
quality and efficiency

Performance measured compared to established budget

Includes Shared Savings/Risk

Requires higher degree of integration and collaboration across the care

and higher level of data analytics capabilities

continuum

Fundamental Drivers

Financially incentivizes healthcare team to target quality/efficiency metrics

Improves outcomes for given patient population

Potential for reduction in total medical expense

Success Factors (all in Category 2 +)

Requires sustainable resources and more advanced

infrastructure to achieve goals
Must meet cost AND quality measures in order to access
rewards
Trust and collaboration between providers and payers critical
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SHARED SAVINGS/RISK #1 THE MATH

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SHARED SAVINGS/RISK #2 THE MATH

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SHARED SAVINGS/RISK #3 THE MATH

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CATEGORY 4 GLOBAL PAYMENTS

Key Attributes
Payment architecture reflects total cost of care for treating a primary

chronic) condition or managing an entire population

(e.g.,

Person Focused cover a wide range of services focused on preventive maintenance

Requires the highest degree of integration and collaboration across the care

continuum and highest level of data analytics capabilities

Fundamental Drivers
Financially incentivizes healthcare team to target quality/efficiency metrics
Improves outcomes for given patient population
Potential for reduction in total medical expense

Success Factors (all in Category 2 and 3 +)

Necessitates virtual integration for some models or vertical
integration for highly integrated models
Requires most advance transformational thinking about delivery
system reform
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GLOBAL PAYMENT THE MATH

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ADVANCED ALTERNATIVE PAYMENT

MODELS
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STANDARDS FOR ADVANCED APMS

The total amount an APM Entity potentially owes CMS or foregoes under an APM must be at least
equal to either:

(1) For [qualified participant (QP)] Performance Periods 2017 and 2018, 8 percent of the estimated average total Medicare Parts A
and B revenues of participating APM Entities; or

(2) 3 percent of the expected expenditures for which an APM Entity is under the APM. 42 CFR 414.1415

Medical Home Models - QP performance period 2017, the total annual amount that a Medical Home Model
advanced APM Entity potentially owes CMS must satisfy: 2.5 percent of the estimated average total Medicare Parts A
and B revenues for participating entities, and in 2018 this amount must be 3 percent.

Base payments on quality measures comparable to those used in MIPS quality category

Requires participants to use certified EHR technology

2019 Advanced APM Menu:
APMs:

Comprehensive Primary Care Plus (CPC+)

Medicare Shared Savings Program (MSSP) Tracks 2 & 3
Next Generation ACO
Comprehensive ESRD Care Model (CEC)

Potential Future Advanced

Oncology Care Model (OCM)
MSSP Track 1+
Episode Payment Models (2 tracks includes CJR)
Medicare Diabetes Prevention Program
Cardiac Rehabilitation (CR) Incentive Payment Model

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QUALIFYING VS PARTIALLY QUALIFYING APM

Payment Amount
QP % Payments
Partial QP %
Payments
QP All Payer %
Payments
Partial QP All
Payer % Payments

2019 to
2020
25%

2021 to
2022
50%

2023 +
75%

20%

40%

50%

NA

50%/*25% 75%/*25%

NA

40%/*20% 50%/*20%

Patient Amount
QP % Patients
Partial QP %
Patients
QP All Payer %
Patients
Partial QP All
Payer % Patients

2019 to
2020
20%

2021 to
2022
35%

2023 +
50%

10%

25%

35%

NA

35%/*20% 50%/*20%

NA

25%/*10% 35%/*10%
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* Medicare minimum

MEDICARE SHARED SAVINGS PROGRAMS - TRACKS 2 & 3

Currently 433 MSSPs 95 % in track 1

and 5% in Tracks 2 & 3

Shared Savings/Risk Model (two sided) Medicare Shared Savings Program ACO
Three Year Program

Assigned Beneficiary Population by ACO by County

Must have defined processes to:

Promote evidenced-based

medicine

Promote patient

engagement

Report quality and cost

measures

Coordinate care
FAST FACTS All Medicare Shared Savings Program (Shared Savings Program) ACOs

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COMPREHENSIVE ESRD CARE MODEL (CEC)

Currently 13 CECs participants - beneficiaries

with ESRD 1.2% population, but total spend
6.3%
Shared Savings/Risk Model
Four Year Program next round 1/1/17
ESRD Seamless Care Organizations (ESCOs)

CEC Model Participants

Dialysis Centers
Nephrologists
Other Suppliers
Outcomes focused
500 patients matched
to the entity

https://innovation.cms.gov/initiatives/comprehensive-esrd-care/

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COMPREHENSIVE PRIMARY CARE PLUS (CPC+)

New Model - builds upon

Comprehensive
Primary Care initiative (2012 - 7
Regions)

P4P or Shared Savings/Risk Model

Five Year Program starts 1/1/17
Advanced Primary Care

Medical Home Model

CPC + 14 Regions
Multi Payer

*Participants CAN include MSSP

HCC Risk Adjusted Payments
* Cap of 1,500 dual participants
https://innovation.cms.gov/initiatives/comprehensive-primary-care-plus

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NEXT GENERATION ACO

New Model - currently 18 Participants

Advanced Shared Risk Model

Three Year Program next round 1/1/17

Different from other MSSPs:

Next Gen ACO Participants

Optional years 4 & 5

Applicants must
demonstrate significant
preparedness

Higher risk and rewards

Population Based Payments

More rigorous promotion

of patient engagement

Enhanced collaboration with CMS

FAST FACTSAll Medicare Shared Savings Program (Shared Savings Program) ACOs

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APM SUMMARY

Payment Models

Provider Technology
Care
Provider Advanced
Admin.
Integration / Analytics
Management Engagemen APM in
Complexity
Necessary Capabilities
Capabilities
t Level
QPP?

What are you ready

for? It depends

Low

Low

Low

Low

Low

No

Pay For
Performance

Low

Low

Low

Medium

Medium

No

Bundled Payments
BPCI, CJR

Medium

Medium

Medium

Medium

Medium

Yes/No

Shared Savings
MSSP Track 1

Medium

Medium

Medium

Medium

Medium

No

Resources?

MSSP Tracks
2&3

Medium

High

High

High

High

Yes

Capital?

Next Gen ACO

High

High

High

High

High

Yes

CPC +

High

High

High

High

High

Yes

Mission/Vision?

CEC

High

High

High

High

High

Yes

OCM

High

High

High

High

High

Yes

High

High

High

High

High

Yes

Shared Risk

Fee For Service

Global Payments

Market?
Providers?
Gaps?

Risk Tolerance?
Culture?
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SETTING UP TO SUCCEED
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ESTABLISH A VALUE PROPOSITION

Value Propositions answer the following

questions:

Who are you?

What value does your practice add to the

network?

How can you quantify how you add value?

Why are you better than the competition?

Where do you see yourself on the managed

care contracting continuum?

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10/31/2016

MACRA GOAL 2017 ADMISSION TO THE 70+

CLUB

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COMPLETE A MARKET ASSESSMENT

Understanding how you are perceived is a foundational step.

http://graphics.wsj.com/medicare-billing/

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EVALUATE CURRENT PERFORMANCE

Devil is in the details

Payers

Total Charges

CPT code level

Payer 1

$ 1,000,000

Payer current fee schedules

Payer 2

Unit cost and revenue

Hassel factor
Language considerations
Payer edits
APMs

% Payer

Total

Gross %

Mix

Revenue

Collections

17%

$ 700,000

70%

$ 500,000

8%

$ 300,000

60%

Payer 3

$ 750,000

13%

$ 590,000

79%

Payer 4

$ 250,000

4%

$ 100,000

40%

Medicare

$ 1,500,000

$ 1,000,000

67%

Medicaid

$ 500,000

8%

$ 300,000

60%

Commercial

$ 750,000

13%

$ 600,000

80%

Self Pay

$ 500,000

8%

$ 400,000

80%

Others

$ 250,000

4%

$ 200,000

80%

Total

$ 6,000,000

$ 4,190,000

70%

25%

100%

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NEGOTIATE AGREEMENTS WITH THE END IN MIND

Create a Collaborative

You are important without

practices there is no network

relationship

Ask the right

questions

Know where you are

headed
Put the past behind

Be the partner
of choice
Leverage your strengths

Be rewarded for the Value you Add

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MONITOR PERFORMANCE AND STEER

Key components of a comprehensive
contract monitoring system:
Complete a contract quick reference guide
Load allowables into practice management

system
Monitor payer website regularly
Keep your finger on the pulse of denial

and/or administrative burden issues

Plan for the next round of negotiations in

terms of timing

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BEST PRACTICES :
By failing to prepare, you are preparing to fail. Benjamin Franklin
Define practice roles and responsibilities for contracting activities with clarity
Analyze contract performance thoroughly and establish baseline performance
Establish timelines for negotiations based on historical performance
Secure a provider champion to support the process
Understand that a well thought out approach pays off
Take emotion out of the equation
Put the past behind them
Focus on creating a collaborative relationship with payer partners and understand that it will not

be perfect for anyone

Establish both short and long-term goals
Consider new approaches/measures and assist the practice in growing into value-based

arrangements
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LET DORAL AND NANCI KNOW WHAT

YOU THOUGHT!

Fill out the speaker evaluation

emailed to you at the end of
each day or immediately through
the MGMA16 mobile app.
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10/31/2016

QUESTIONS?
Nanci Robertson, RN BSN
President - Robertson Consulting, Inc.
roberstonconsulting@comcast.net
(303) 981 5138
Doral Jacobsen, MBA FACMPE
CEO - Prosper Beyond, Inc.
doraldj@prosperbeyond.com
(828) 231 1479

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