How to Succeed with Bundled Payments

Transcription

1 A Programmatic Approach for Sustainable Change The Centers for Medicare and Medicaid Services (CMS) recently published its final CMS decision to move forward with the ruling for the Comprehensive Care for Joint CJR mandatory bundles initiative is a Replacement (CJR) Model, which is designed to test bundled payment and quality clear sign it views episodic bundling as measurement for hip and knee replacements in a major lever in its transition to 50% approximately 800 hospitals across 67 value-based care by 2018, and one metropolitan service areas (MSA s). Beginning April 1, these hospitals will be accountable for likely to impact nearly all U.S. hospitals the quality and cost of the entire joint in the near future. replacement care episode, including patient recovery up to 90 days following surgery. The clinical, operational and financial implications of this model will be significant for the majority of these hospitals. True success and sustainable impact will not come without focused effort from both clinical and administrative leaders. Even if your organization is not part of this first wave of providers, this ruling should not be dismissed as something to address in the future. CMS decision to move forward with the CJR mandatory bundles initiative, prior to the completion of the Bundled Payments for Care Improvement Initiative (BPCI), is a clear sign it views episodic bundling as a major lever in its transition to 50% value-based care by 2018, and one likely to impact nearly all U.S. hospitals in the near future. Program expansion by CMS to other geographic areas and additional episodes of care - particularly those currently in BPCI - is anticipated. Commercial insurers are also watching closely and could follow suit. In fact, in addition to government programs, more and more providers are viewing episodic bundling with commercial payors as a relatively manageable starting point for their ventures into value-based care. They are finding that the scope of the work and contracts can be defined narrowly or broadly based on the organization s interests, and if done right, the competencies developed to succeed with bundles can be applied more generally. Whether your organization is one of the 800 hospitals inheriting the CJR, is preparing for likely

2 expansion of government programs, or is pursuing its own bundles with commercial payors, there is an opportunity to develop the capabilities that are an essential foundation for a successful program of bundles and other value-based initiatives moving forward. Project or Program: A Key Consideration for Success Under pressure to meet the upcoming April 1 deadline, many organizations run the risk of focusing only on the near-term needs of the CJR extended episode addressing it as an individual project, isolated from other value-based and clinical performance improvement initiatives. As the need to address additional episodes of care and populations expands over time, an isolated project-based approach will become taxing on the organization and jeopardize overall results. Too many uncoordinated pursuits can become counterproductive and will exhaust organizational resources, if they do not take advantage of economies of expertise. Instead, we recommend addressing the CJR bundle directly and in a timely fashion, while thoughtfully connecting your efforts with the development of broader organizational capabilities to support a comprehensive and scalable program long-term. The benefits of this type of programmatic approach for managing bundles and other clinical performance improvement initiatives include: Unites clinical and administrative leaders and establishes accountability at the organizational level to drive meaningful change Ensures a comprehensive view of the value-based and clinical performance improvement initiatives across the organization, so that individual efforts can be prioritized against each other and resources directed accordingly Allows for a unified voice from leadership to the rest of the organization of the importance of each effort and how each fits into a broader vision for value-based care Facilitates a consistent approach to physician engagement as a critical driver of sustainable results Creates economies of scale and expertise so that each initiative builds on the last and leverages relevant solutions already developed Identifies improvement opportunities and organizational capabilities that should be pursued at the organizational level, as opposed to within the individual service line or episode Ensures efforts are mutually reinforcing and do not optimize one area at the expense of another Even though April 1 is fast approaching, there is still time to take a thoughtful programmatic approach. The CMS rule involves no repayment requirements in year one and limited downside risk in year two, in acknowledgement of the heavy lift ahead for many providers. This gives participants the time required to design and execute on a more effective, sustainable and scalable solution. For providers outside the purview of the CJR, the focus now should be on proactive development of programmatic competencies to prepare for future government and commercial value-based pursuits. Page 2

3 Use the CJR Initiative to Build a Program Foundation By taking a structured and purposeful approach that promotes organizational awareness and clinician engagement, organizations can use the CJR or other initial episodic bundling endeavors as a foundation for their program for value-based care initiatives. Below are six specific recommendations for getting started: Near-Term Requirements Activate Organizational Leadership: Episodic bundling is an opportunity to bring together clinical and administrative leaders from across the organization to collaborate on the development of essential clinical, operational and financial capabilities. For the CJR specifically, the effort may be spearheaded by the orthopedics service line as the initial demonstration, leading an integrated team that can support the broader spread and iteration of solutions beyond CJR. Overall accountability, however, must be with organizational leadership to further ensure adoption and advancement of solutions beyond this particular model. Understand Your Populations and Drivers of Performance: For many participants, episodic bundling will provide the first opportunity to use clinical claims data to profile and segment a population. Organizations will want to look at differences in financial, quality and service performance across patient cohorts (e.g., medical risk, elective versus emergent and knee versus hip) to inform the performance improvement work. For CJR, opportunities to improve outcomes and lower costs typically exist in lowering readmissions rates, optimizing post-acute utilization and placement and aggressively managing implant costs. As new care processes and protocols are designed, it will be important to incorporate real-time feedback mechanisms to monitor adherence and quickly identify when drivers of performance are slipping. This analytic capability should be built outside of the orthopedics service line in order to leverage existing competencies and ensure greater transferability to other similar endeavors. Long-Term Capabilities Leadership Alignment Organizational Accountability Quality, Satisfaction and Utilization Reporting Claims Data Ongoing Performance and Data Sharing Page 3

4 Near-Term Requirements Engage Your Physicians: Extended episodic bundling requires broadening the types of physicians involved in improvement efforts. For procedural episodes in particular, many participants will find that a large portion of the fungible costs embedded in the episode will reside outside of the procedure itself. For CJR, this means organizations will therefore need to actively engage and align hospitalists and primary care physicians around the care pathways and clinical protocols. This may be a new approach for organizations that are accustomed to prioritizing the role of the orthopedic surgeon in improvement efforts. Hospitalists will be called upon for medical management in the acute setting and primary care physicians will play a key role in optimizing the preoperative and 90-day care. All three groups should be represented in the leadership team in recognition of the essential role each plays in the success of the program. Advance Your Care Models: Designing new care pathways and protocols for a specific episodic bundle like the CJR is an opportunity for organizations to build the competencies for a consistent approach that can be applied across different areas for other, similar efforts. This work entails managing the common medical complications for this population and optimizing care processes to mitigate their risk prior to surgery. Included is the development of patient engagement and education strategies for different risk profiles including medically complex, frail/elderly, young/healthy and socially complex, among others. New approaches to post-acute management should be considered, such as the adoption of monitoring techniques for patients at home or in a skilled nursing facility. At the same time, it will be essential to aggressively manage the variation of costs within your direct control, including implants and supplies, and utilization of diagnostic testing. Long-Term Capabilities Physician Engagement Clinical Protocol and Care Pathway Development Care and Discharge Planning Patient Engagement Cost and Quality Variation Page 4

5 Near-Term Requirements Engage Your Community Partners: As providers assume accountability for cost and quality beyond the acute episode, their overall performance will be highly dependent on post-acute network partners and independent physicians. It will be increasingly important to assemble a highperforming post-acute provider network to include skilled nursing facilities as well as home health agencies, understand variation in costs across providers, and develop relationships to collaborate with these organizations in the clinical protocol and care pathway redesign efforts. Collaboration with independent physicians to promote adoption of redesigned clinical practices will also be important. Align Economic Incentives: Economic incentive distribution models must be developed to ensure all accountable parties are invested in the success of the program. The division of incentives between the hospital and physicians, and between employed and independent physicians, will be important. Existing compensation models for employed physicians will need to be reviewed to ensure that they appropriately align with the bundles program. For the CJR, it will be critical to create incentives for orthopedic surgeons to manage the cost of implants, but surgeons should not be disproportionately incented at the expense of other key players. Incentives must be distributed based on who manages the controllable costs, including hospitalists and primary care physicians. The resulting model should be simple to understand and adjudicate, incorporate a quality gating functionality and be developed with the understanding that precedents set now may impact future programs. Long-Term Capabilities Post-Acute Provider Network Development and Independent Provider Collaboration Internal Funds Flow Development Physician Gainsharing Your organization will benefit from viewing the mandatory bundling initiatives that CMS has begun to roll out through a broad lens as an opportunity to develop a comprehensive programmatic approach and build the organizational capabilities needed to position yourself for additional bundles and other value-based arrangements in the future. By considering these six recommendations, you can successfully navigate episodic bundling in a structured and purposeful way that addresses the near-term requirements of a specific bundle, while promoting long-term capabilities development. Page 5

6 ABOUT THE AUTHORS Thomas Graf, MD National Director of Population Health Melissa McCain Director and Clinical Transformation Practice Leader Stephanie Hines Clinical Transformation Practice Manager The Chartis Group, LLC. All rights reserved. This content draws on the research and experience of Chartis consultants and other sources. It is for general information purposes only and should not be used as a substitute for consultation with professional advisors. Page 6