1
Q
Reasons why a health plan wants to contract with providers (contracting goals)
A
- Obtain favorable pricing (less than full billed amounts)
- Obtain payment terms that result in UW gain
- Get the provider to agree to provide services to the plan’s members
- Meet service area access standards required by states and Medicare
- Obtain contractual agreement for several clauses required by states and Medicare, where the provider agrees to:
a) Submit claims directly to plan, not member
b) Not balance bill member for any amount above the agreed-upon payment terms
c) Hold harmless the member (for any amts owed by plan)
d) Cooperate w/ plan’s UM program
e) Cooperate w/ plan’s QM program
f) Not discriminate
g) Give plan right to audit billing data
2
Q
Reasons why a provider wants to contract with a health plan (contracting goals)
A
- Obtain favorable pricing
- Ensure it will not be excluded from network
- Receive direct payment from plan, avoiding need to collect from patient
- Receive timely payment
- Have plan members directed or steered to it
- Not lose business from steerage away
- Receive defined rights around disputing claims/payments
3
Q
Capabilities of a well-functioning contract management system
A
- ID network gaps
- Track recruiting efforts, generate reports
- Generate new contract blanks
- Store copies of different versions of any provider’s contract
- Track and report contract changes for each provider
- Track and manage permissions and sign-offs on contracts
- Store images of signed docs and convert to machine-readable formats
- Support paperless contracting process
- Provide early notifications for recredentialing, renegotiations, etc
- Be searchable
- Analyze potential impact of changes in contract terms
4
Q
Types of physicians and other professional providers
A
- PCPs and SCPs
- Hospital-based physicians
- Nonphysician or mid-level practitioners that provide primary care (NPs, PAs)
- Mental health providers (psychiatrist, psychologist, CSW, family therapist, etc)
- Other types (dentists, optometrists, etc)
5
Q
Contracting considerations for different types of physician groups
A
- Individual physicians - advantage is direct relationship with physician; disadvantage is effort to maintain relationship is large for just one
- Medical groups - advantage is same contracting effort yields higher # of physicians; disadvantage is that if relationship is terminated, greater disruption in patient care
- IPAs - advantages are large # of providers come along w/ contract, IPA may accept more financial risk, and some IPAs perform network management/credentialing/med management; disadvantages are that the IPA can hold a considerable portion of delivery system hostage to negotiations, and plan’s ability to select and deselect individual physicians is limited
- Faculty practice plans (medical groups organized around teaching programs) - advantage is these programs provide highly specialized care and add prestige; challenges are they tend to be less cost effective in practice styles and are not set up for case management, so care is not coordinated
- IDSs - hospital systems that employ physicians often have substantial negotiating leverage
6
Q
Elements of a typical physician credentialing application
A
- Demographics, licenses, and other identifiers
- Education, training, and specialties
- Practice details - services provided, hours, etc
- Billing and remittance info
- Hospital admitting privileges
- Professional liability insurance
- Work history and references
- Disclosure questions - such as suspension from government programs or felony convictions
- Images of supporting documents - such as state license certificate
7
Q
Types of health care facilities
A
- Community based single acute care hospitals
- Multihospital systems (gives them negotiating leverage)
- For-profit national hospital companies (much less autonomy)
- Specialized hospitals (children’s, psychiatric, etc)
- Physician-owned single-specialty hospitals
- ACOs - coordinate care for Medicare FFs beneficiaries
- Gov’t hospitals
- Subacute care (SNFs, etc - for prolonged convalescence or recovery)
- Ambulatory surgical centers - handle routine cases
- Hospice - end of life
- Retail health clinics
- Urgent care centers
8
Q
Types of ancillary services
A
- Diagnostic (lab, imaging, cardiac testing)
- Therapeutic (PT, OT, ST)
- Rx
- Ambulance and medical transportation services
9
Q
Non-risk-based physician payment methodologies
A
FFS
- Straight charges - full billed charges
- UCR - physicians are paid up to the prevailing fee
- % discount on charges
- Fee schedule
- Relative value scale (RVS) - each CPT code has a relative value associated with it called a relative value unit (RVU). Pmt = RVU * multiplier
- Resource-based relative value scale (RBRVS) - each CPT code has 3 RVUs (for procedure difficulty, practice cost, and malpractice insurance cost) and the multiplier is applied to the sum of the 3
- % of Medicare RBRVS
- Special fee schedule or RVS multiplier - for large groups/systems
- Facility fee add-on - when hospital runs clinics or offices used by physicians, commonly adds on a separate fee paid to the facility
- Electronic or online visits
Case rates and global fees - single payment, may be subject to additional outlier fees
10
Q
Risk-based physician payment methodologies
A
- Capitation - prepayment for services on PMPM basis
- Withholds - % of primary care capitation that is withheld every month and used to pay for cost overruns; remainder after overruns are paid is returned to PCPs
- Physician risk pools (referral/specialty, hospital/facility, and ancillary services) - plan sets aside money in these separate pools and payments for those services are made from the pools; at year end, any surplus in one pool is first used to offset excess expenses in the others, and remaining funds are paid to physicians
- Risk-based FFS - PCP withholds, mandatory fee reductions (unilateral reduction), and budgeted FFS (max amount that may be spent, or fees get reduced)
11
Q
Considerations when capitating PCPs
A
- Capitation is usually used only by HMOs b/c only HMOs can use PCP gatekeeper system
- To determine appropriate capitation, plan must first define all services expected to be covered by cap payment; carveouts should only be used for services not subject to discretionary utilization
- Cap rate for given service = net cost per service (after copays) * expected utilization PMPM
- Capitation payments sometimes vary by age, gender, case mix, geography, practice type, etc
- Behavioral shift - members may alter use of services in response to economic incentives or barriers, such as member cost sharing
12
Q
Categories of risk accepted by capitated physicians
A
- Financial risk - actual income placed at risk, such as withholds and capitated pools for non-primary care services
- Service risk - providing higher volume of services than expected for a fixed payment; could become too busy and lose ability to sell services to someone else for additional income
13
Q
Approaches for paying capitations to SCPs
A
- Direct capitation to individual physicians or specialty groups
- Capitation to a company that specializes in specific types of care; pmt covers costs from all services related to condition such as inpatient, outpatient, physician, Rx, etc
- Contact capitation - budgeted PMPM capitated pool of money is set up for each major specialty; plan tracks member contacts made by each SCP, and at end of period, the pool is paid out proportionally based on member contacts
14
Q
Pros and cons of capitation
A
Advantages for HMO
- Gives provider an incentive to reduce medical expenses and utilization
- Eliminates incentive to overutilize and aligns provider’s incentives with those of HMO
- Plan costs are more easily predicted
- Easier and less costly to administer than FFS
Advantages for provider
- Provides good cash flow, with money coming in at predictable rate and as prepayment
- If physician is effective at managing cost, profit margins can exceed those with FFS
Disadvantages
- No immediate reward when provider performs service since pmt has already been received
- Physician’s success is subject to a lot of luck
- Capitation incentivizes doc to withhold necessary care
15
Q
Federal regulations affecting risk-based physician payments
A
- “Significant financial risk” (SFR)
a) Applies to Medicare and Medicaid HMOs with contracts that place physician or medical group at SFR for medical costs
b) Exists in any arrangement where amount at risk for referral services exceeds 25% of potential payments (e.g., withholds > 25%)
c) Stop loss protection must be in place for these providers, covering 90% of cost of referral services that exceed 25% of potential payments - Disclosure requirements - CMS requires disclosure of payment incentive plans to both CMS and to members of Medicare or Medicaid HMO, including type of incentive arrangement and % of total income at risk for referrals
16
Q
Ways to modify amount paid for hospital case
A
- Carve-outs - hospitals want to carve out expensive implants or drugs, but this removes incentive for hospital to negotiate prices on these items; payers want to limit # of carve-outs
- Credits - manufacturers provide refund (credit) to facility if implantable device fails or must be removed; facilities need to rebate Medicare for these credits, and payers should secure same arrangement
- Outliers - extra payments if patient’s cost exceeds threshold (usually original payment plus discounted charges)
17
Q
Types of payment for hospital services
A
- Charges - straight, straight discount, sliding scale discount (based on volume of admissions)
- Per diems - flat, service-specific, differential by day in hospital (1st day = more $), sliding scale (based on volume of admissions)
- DRGs and Medicare-severity DRGs (MS-DRGs) - MS-DRGs are like DRGs, except payments are adjusted to reflect severity of illness and complications during admission
- Percent of Medicare
- Facility-only case rates - flat payment to facility for defined service
- Capitation - paying hospital on PMPM basis to cover all costs for defined population of members; payment may vary by age, sex, severity
- Percent of revenue - hospital is paid % of premium revenue, subjecting it to bearing full insurance risk
- Ambulatory patient groups and APCs - used for ambulatory facility services
18
Q
Payment approaches that make a combined payment to hospitals and physicians
A
- Global capitation - payment is made to single entity for all services, which manages all care
- Bundled payment, package pricing, and global payment - single fee covering all facility and professional services related to a particular episode of care
- Shared savings - non-capitated methodology where cost savings compared to a targeted cost are shared between payer and provider org
19
Q
Considerations for establishing P4P programs
A
- Performance is measured based on: structure (support system for care), process (how care is delivered), and outcome
- Program should focus on small set of measures
- Measures should be simple to understand (more likely to be accepted)
- Measures often come from nationally-recognized standards, such as HEDIS data set
- Measures must be translated into achievable goals that can be tied to an incentive payment
- Incentives typically range from 0.4-4% for hospitals and 5-10% for physicians
20
Q
Types of payment for ancillary services
A
- Discounted FFS or fee schedule
- Flat rates or case rates
- Capitation
21
Q
Principles to follow for changing physician practice behaviors
A
- Relationships matter - physicians acting as medical managers should get to know their practicing peers and approach conversations as respectful colleagues
- Let data speak for itself
- Peers are powerful influencers of physician practice patterns - more likely to change behavior if they can discuss potential changes with peer
- Peer leaders must understand and communicate big picture
22
Q
Tools for changing physician behavior
A
- Ongoing communications - electronic or paper (the worst), group meetings, social networking
- Data - challenge is knowing which info can be translated into useful knowledge; must be checked for accuracy
- Mission clarity - what org is trying to accomplish
23
Q
Programmatic approaches to changing physician behavior
A
- Financial incentives
- Formal continuing ed (little evidence that this changes behavior)
- Data and feedback
a) Goal alignment - physicians must have reason to change
b) Clean data - feedback must be credible
c) Knowledge - feedback must be consistent and usable
d) Timeliness - feedback needs to be closely related to what physician is doing at the time
e) Reinforced - must be regular in order to sustain changed behavior
f) Extrinsic motivation - feedback linked to economic performance more likely to produce changes - Practice guidelines and clinical protocols - using evidence-based guidelines is most effective when efforts are focused on 1-2 new guidelines at a time, focused on conditions that occur frequently, implementation of guidelines is accompanied by regular feedback, and financial rwards are used
- Small group programs - strong evidence of positive changes resulting from educating physicians in interactive small groups
24
Q
Stepwise approach for changing behavior in individual providers
A
- Collegial discussion of cases and utilization patterns in a nonthreatening way
- Persuading the provider to act in ways he or she may not initially choose
- Firm direction (only if first 2 steps don’t work)
- Discipline and sanctions (last resort) - for poor quality care, failing to comply with plan policies and procedures, and utilization not matching org’s managed care philosophy
25
Sources of data for provider profiling
1. Lab test results
2. Biometric info
3. Feeds from electronic health records
4. Patient satisfaction measures
5. Operational info on vendor programs
6. Claims system data - major source, must be standardized and stored in data warehouse before use
26
Data to include in a data warehouse for provider profiling purposes
(Provider profiling is the identification, collection, collation, and analysis of data to develop a characterization of the provider's performance)
1. Unique patient identifier
2. Diagnostic info (e.g., ICD-10 codes)
3. Procedural info (e.g., CPT codes)
4. Level of service info
5. Paid and allowed dollar amounts from services ordered by physician or health care facility
6. Unique provider identifier
27
Principles for designing provider profiling reports
1. Identify high-volume and costly clinical areas to profile
2. Involve appropriate internal and external customers (including providers) in developing and implementing the profile
3. Compare results with published performance (external vs internal norms)
4. Report performance using a uniform clinical data set
5. When possible, employ an external data source for independent validation of provider's data
6. Consider onsite verification of data from provider's information system
7. Present comparative performance using clinically-relevant risk stratification
8. Require statistical significance for comparisons and establish thresholds for minimum sample size
9. Adjust performance measurements for severity
28
Users of provider profiles
1. Health plans - for example, provider relations and medical directors
2. Consumers - effective dissemination of profiles to members is still under development
3. Employers - most are more interested in cost control than quality
4. Providers - most are interested in change if methods to measure performance are well grounded in scientific evidence
29
Desired characteristics of provider profiles
1. Accurately identify the provider - not easy w/ multiple providers; at physician level (cred issues) or clinic/group level?
2. Accurately identify provider's specialty
3. Help to improve process and outcome of care
4. Have firm basis in scientific literature and professional consensus
5. Meet certain statistical thresholds of validity (extend to which data means what you think it means) and reliability (extent to which data is consistent and means same thing from provider to provider)
6. Compare provider to norm (budgeted amounts, results from peers, etc)
7. Cost the minimum amount possible to produce
8. Respect patient confidentiality and obtain patient consent when necessary
30
Future trends that will affect pharmacy program management
1. Patent loss of approximately $90B of brand-name drugs --> low cost trends
2. Increase in # of specialty drugs approved by FDA
3. Due to high cost of specialty drugs, health plans will integrate some portion of med and Rx management
4. By 2019, # of beneficiaries in Medicare and Medicaid will grow by 30%
5. Due to ACA and CMS policy, will be several initiatives to measure and promote practice patterns and risk-sharing contracts that improve outcomes and quality of care
6. New technologies will support ACOs and PCMHs
7. Health plans and PBMs will likely implement greater restrictions on formularies
31
Services typically offered by PBMs
1. Claims processing and management reports
2. Community retail pharmacy provider network
3. Home delivery (mail service) prescriptions
4. Specialty pharmacy distribution services
5. Drug formulary development and management
6. Pharmaceutical manufacturer contracting
7. Customized pharmacy benefit design development and administration
8. Clinical pharmacy programs (DUR, MTM, etc)
9. Other customized services requested by plan sponsors
32
Categories of drugs typically excluded on prescription drug plans
1. Experimental (not approved by FDA)
2. FDA-approved drugs when prescribed for unapproved indications (off label use)
3. Drugs used for cosmetic purposes or specific purposes such as smoking cessation or infertility
4. OTC drugs other than insulin
33
Types of drug utilization review programs
1. Prospective - can identify and resolve problems before medication is dispensed
2. Concurrent - performed at point of prescribing, to alert for potential conflicts before product is dispensed
3. Retrospective - after prescription is dispensed; could include review of high-cost outliers
34
Formulary guidelines for Part D plans
1. 146 therapeutic categories
2. If generic is available, must be included
3. If brand is dispensed, must inform patient of cost differential
4. Preferred drug rebates must go to payer to decrease cost of program
5. At least 2 drugs must be included in each category
6. Formulary must include prior auths, step therapy, generic reqs, and preferred brand
7. Substantially all drugs must be included from following classes: HIV/AIDS, antipsychotics, anticonvulsants, antidepressants, anticancer
35
Services provided by MTM programs
1. Performing assessments of patient's health status
2. Formulating med treatment plan
3. Selecting/administering medication therapy
4. Monitoring and evaluating patient's response to therapy
5. Performing a comprehensive medication review to ID/resolve/prevent medication-related problems
6. Documenting care delivered and communicating essential info to patient's other PCPs
7. Providing verbal education and training about appropriate use
8. Providing info, support, and resources to enhance adherence
9. Coordinating MTM services with other care management
36
Metrics for measuring financial performance of pharmacy programs
1. Various cost parameters (copayments, program expenses)
2. Prescription utilization and trends
3. Administrative and claims processing fees
4. Prescription discount or rebate
5. Generic dispensing and conversion rates and missed generic substitution opportunities
6. Drug formulary conformance rate
7. Patient satisfaction and member complaints related to the pharmacy program
8. Number of drug formulary prior authorization exception requests and approvals
9. HEDIS measures related to pharmacy
10. DUR exception reports
37
Key success factors of an ACO
1. Ability to ID population to manage
2. Ability to understand and manage cost
3. Ability to manage quality
4. Ability to integrate care
38
Key success factors of a PCMH
1. Improved quality of care
2. Improved status of comorbid conditions
3. Increased satisfaction of patients
4. Reduction of avoidable comorbid hospitalizations
5. Reduction of acute occurrences
6. Reduction of inpatient admissions
7. Reduction of LTC admissions
39
Types of services delivered by behavioral health care networks
1. Inpatient services - 24 hr care in psych facility, detox unit, etc
2. Residential treatment - severe mental or substance-related disorders
3. Partial hospitalization - provides structured mental health or substance abuse therapeutic services at least 4 hours per day, 3 days per week
4. Intensive outpatient program - at least 2 hours per day, 3 days per week
5. Outpatient treatment
6. Employment assistance programs - short term, problem-focused
40
Types of behavioral health care services delivered by public sector networks
1. Supervised living - includes community-based residential detox programs and rehab
2. Programs for assertive community treatment - multidisciplinary teams deliver services directly in community
3. Peer support - consumers work under supervision of behavioral health provider
4. Continuous treatment teams - provide a range of services to help prevent a child from needing to be removed from home
5. Community case management - workers coordinate care and social services delivered w/i community
41
UM strategies to reduce inpatient behavioral health care costs
1. Addressing psychosocial causes of admissions in order to get early treatment and avert need for admission
2. Increasing ambulatory follow-up to help prevent unnecessary readmissions
3. Reducing readmissions through intensive interventions for at-risk patients
4. Measuring and tracking clinical performance with a focus on outcomes and efficiency
5. Reducing relapse through effective aftercare planning and use of community and social supports
6. Coordinating services among multiple agencies and providers
7. Emphasizing quality of services provided through supervision, analysis of complaints, satisfaction surveys, and staff training
42
Delivery mechanisms for telemental health services
1. Hub-and-spoke networks - link large tertiary centers w/ outlying clinics
2. Health provider-home connections - link providers with single-line phone-video systems for interactive consults
3. Web-based e-health patient service sites - provide direct consumer outreach and services over internet
43
Challenges related to delivering telehealth care
1. Technology infrastructure - technologies available are constantly expanding
2. Cost - capital investment required for telehealth infrastructure can be prohibitive for some organizations and communities
3. State licensing and regulation - professionals who use telemedicine technology across state lines must apply for separate license in each state
4. Payment - # of payers have recently started covering telehealth and "web visits" for their members
44
Institute of Medicine definition of quality care
Definition - degree to which health services increase likelihood of desired health outcomes and are consistent with current professional knowledge
Properties of high-quality care
1. Safe
2. Effective
3. Patient-centered
4. Timely
5. Efficient
6. Equitable
45
Data sources for behavioral health care performance metrics
1. Administrative data - claims, eligibility info, etc
2. Treatment records
3. Survey data - from providers and consumers
4. Access data - from reviews of provider appointment availability
5. Clinical assessments - involve consumer self-report and provider and caretaker observations
6. UM data
7. Risk management data - include adverse events and medication errors
8. Predictive modeling data - derived from utilization data and population risk adjustment formulas
46
Considerations in contracting for bundled payments
1. Defining the episode - trigger date, end date, services included
2. Evaluating catastrophic risk - outlier risk analysis
3. Financial stability for low case loads - random fluctuation
4. Determining provider allocation of funds - consider financial incentives for physicians
5. Distinguishing cost severity - could limit risk by removing higher-severity patients from bundled payment approach
6. Quality outcome requirements - minimum quality thresholds may be needed as providers reduce services
7. Administrative complexity of supporting the contract
8. Risk-sharing alternatives - contracts that share financial risk between provider and payer
9. Potential for increased utilization - contracts should not incentivize increased utilization to get larger share of bundled rate
47
Definition of ACOs
1. Created as part of Medicare Shared Savings Program through ACA
2. Definition - legal entity composed of certified Medicare providers or suppliers, who work together to coordinate care for defined pop of Medicare FFS beneficiaries
3. ACOs that meet specified quality performance standards are eligible to receive payments for shared savings if they can reduce spending growth below target amounts
4. Medicare beneficiaries will be assigned to ACOs based on where they receive certain primary care in most recent 12 months
48
Eligibility requirements for ACOs to participate in Medicare Shared Savings Program
1. Must be an eligible type of provider
2. Must be capable of receiving and distributing shared savings, repaying shared losses, ensuring all providers comply with program requirements, and performing other required functions
3. Governing body must be composed primarily (at least 75%) of participating providers and beneficiaries
4. Must exhibit strong patient-centeredness element
5. Must have sufficient number of beneficiaries (> 5k) and PCPs
6. Must have compliance plan, lead compliance official, and mechanisms for identifying compliance problems
49
Providers eligible to participate in an ACO
1. Professionals in group practice arrangements
2. Networks of individual practices
3. Joint venture arrangements between hospitals and professionals
4. Hospitals employing professionals
5. Critical access hospitals that are paid by Medicare in a way that supports the collection of data needed to assign patients to providers
6. Rural health clinics
7. FQHCs
50
Ways ACOs must demonstrate patient-centeredness
1. Beneficiary care experience survey
2. Patient involvement in ACO governance by representation in governing body
3. Process for evaluating health needs of population
4. Systems in place to identify high-risk individuals
5. Mechanism in place for coordination of care
6. Process in place for communicating clinical knowledge to beneficiaries in an understandable way
7. Process to allow beneficiaries to access their medical records
8. Processes for measuring clinical or service performance and using results to improve care
51
Uses of quality and efficiency measurements
1. Professional standards
2. Government oversight
3. Professional accreditation
4. Quality improvement
5. Network development
6. Pay-for-performance programs
7. Public reporting
8. Consumer health education
9. Financial management
10. Purchaser decision making
52
6 priorities of HHS national strategy for quality improvement
1. Making care safer
2. Ensuring that each person/family is engaged as partners in their care
3. Promoting effective communication and coordination of care
4. Promoting most effective prevention and treatment practices for leading mortality causes
5. Working with communities to promote best practices
6. Making quality care more affordable through new delivery models
53
Advantages to providers and payors for using bundled payments
Providers
1. Attract more business
2. Engage physicians, including those who could split their admissions among several hospitals
3. Gain cooperation of physicians to reduce hospital cost
Payors
1. Reduce payments
2. Encourage patients to use lower cost or higher quality providers
Help align financial and quality of care incentives
GH Advanced
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