© 2015 stryker performance solutions. reproduction or distribution prohibited without the express...

© 2015 Stryker Performance Solutions. Reproduction or distribution prohibited without the express written consent of Stryker Performance Solutions.

I N S E RT C U S TO M E R N A M E

Driving Transformation for Comprehensive Care for Joint Replacement

(CJR)

Understand • Redesign • Align


THE RAPID TRANSITION TO VALUE-BASED CARE

2016

30% OF MEDICAREPAYMENTS

TIED TO ALTERNATIVE PAYMENT MODELS (ACOS/BP)

2018

50% OF MEDICARE PAYMENTS TIED TO ALTERNATIVE PAYMENT MODELS (ACOS/BP)

January 28, 2015

Health Care Transformation Taskforce (group of nation’s largest health systems and insurers) announces 2020 goal of shifting 75% revenue tied to alternative payment models

October 2013 toOctober 2015

Bundled Payment for Care Improvement cohorts went live

January 26, 2015

U.S. Department of Health and Human Services (HHS) sets goals and timeline for Medicare reimbursement shift from volume to value

July 9, 2015

CJR Announced: Mandatory Total Joint episode-based bundled payment model for DRGs 469 & 470

2020

Health Care Transformation Taskforce (75% adherence): CMS setting a trend and entire market is shifting

2009

Acute Care Episode (ACE) demonstration to test the use of a bundled payment for both hospital and physician services for a select set of inpatient episodes of care for orthopedic and cardiovascular procedures

VO

LU

NTA

RY

MA

ND

AT

OR

Y

November 16, 2015

CJR Announced: Final rule posted


CJR OVERVIEW

• Mandatory bundled payment model for Total Joint Replacement and reattachment of the lower extremities (DRGs 469 & 470)

• Separate Target Pricing for elective and Hip Fracture patient population

• 67 metropolitan statistical areas (MSA) / 800+ hospitals

• Begins April 1, 2016 (5-year duration)

• CMS-defined, required quality metrics

• Target price based on blended hospital and regional spending

• Retrospective annual reconciliation

• Excludes episodes covered under an existing Bundled Payments for Care Improvement contract

The Comprehensive Care for Joint Replacement Model

Acute Care Hospital Stay and Post-Acute Care 90 Days Post-Discharge


FINAL CJR PARTICIPATING MSAS


OPTIMIZING THE ORTHOPEDIC VALUE CHAIN

Average DRG 470 90 Day Episode Cost

The Total Joint episode of care represents a significant opportunity to improve quality through reduced variation, resulting in decreased cost.

INPATIENT

PHYSICIAN

OUTPATIENT

READMISSION

HHA

SNF

IP PAC

TOTAL COST* QUALITY

* Cost to Medicare

PA S TF O C U S

C J RF O C U S

Addressing this segment of the episode is going to be a new focus under CJR and potentially a challenge for Hospitals to manage


SAMPLE HOSPITAL CJR OPPORTUNITY

FLORIDA HOSPITAL

FLORIDA HOSPITAL

ZEPHYRHILLS

HELEN ELLIS MEMORIAL HOSPITAL

FLORIDA HOSPITAL

WATERMAN

FLORIDA HOSPITAL CARROLL-

WOOD

FLORIDA HOSPITAL

TAMPA

South Atlantic Benchmark$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Average DRG 470 Episode Cost

Index Admit Professional OP_DME Readmits HHA SNF Other IP PAC

Note - Data includes 9 months of 2013 from the CMS Claims Files. The graph shows all claims data for DRG 470 that is reported under a given CMS ID. Region mappings by state are from CMS (http://innovation.cms.gov/initiatives/cjr/). The Marshall | Steele DCOSP Benchmark represents the weighted average episode cost of all the facilities within the best performing quartile with DCOSP that were launched prior to 2012. The Top Quartile M|S DCOSP Benchmark Index Admission cost is set is equal to the National Average Index Admission cost to normalize for wage index differences. Facility and regional costs reflect actual claims paid and are not adjusted to remove the impact of wage index. Comparisons between facility, region and benchmark reflect differences in wage indices. Final target price for CJR will be based on episodes initiated 1/1/2012-12/31/2014 and will reflect a blend of facility and wage index normalized regional costs.

Hospital A Hospital B Hospital C Hospital D Hospital E Hospital F Region Benchmark

http://innovation.cms.gov/initiatives/cjr/




THE RISING BAR OF CJR

Y E A R 1 Y E A R 2 Y E A R 3 Y E A R 4 Y E A R 5

Risk ModelUpside potential

onlyUpside only;

Limited downside

Full upside and limited downside

risk

Full upside and downside risk

Full upside and downside risk

Historical HOSPITAL Performance Weighting 66.6% 66.6% 33.3% 0% 0%

Historical REGIONAL Performance Weighting 33.3% 33.3% 66.6% 100% 100%

Range for Discount used for Repayment Amount Reconciliation; Determined by Composite Quality Score

N/A 0.5%–2% 0.5%–2% 1.5%–3% 1.5%–3%

Loss/Gain CapNo loss

5% gain cap5% loss cap5% gain cap

10% loss cap10% gain cap



H I S T O R I C A L H O S P I T A L P E R F O R M A N C E

H I S T O R I C A L R E G I O N A LP E R F O R M A N C E


THE RISING BAR OF CJR

Hospitals will be pressured to improve their baseline episode performance to outpace the rest of their region

Y E A R 1 Y E A R 2 Y E A R 3 Y E A R 4 Y E A R 5H I S T O R I C A L H O S P I T A L P E R F O R M A N C E

H I S T O R I C A L R E G I O N A LP E R F O R M A N C E

Those who can’t compete we expect to see:

• Joint programs marginalized

• Consolidation

• Unprofitability

Regional markets will become increasingly competitive as bundled payment programs, including BPCI, continue to evolve and drive target prices down


CJR COMPLIANCE REQUIREMENTS

General Program Compliance

• Hospital compliance plan that includes CJR• Board level oversight of CJR• Written policies for selection of collaborators with established quality criteria• Hospital oversight of compliance with collaborators

Hospital Beneficiary Notification Compliance

• Patient CJR education upon admission • Patient notification of PAC provider options

Collaborator Beneficiary Notification Requirements

1) CJR Physician: Required to provide written notice of the structure of the CJR model and the existence of the sharing arrangement with the hospital at the time the decision for surgery is made

2) CJR PAC Provider/Supplier: Required to provide written notice of the existence of the CJR sharing arrangement with the hospital at the time the beneficiary first receives services during the episode

Collaborator Compliance PlanCollaborators must have their own compliance plan in place related to CJR

CMS may add 25% to a repayment amount on a participant hospital's reconciliation report if the participant

hospital fails to timely comply with a corrective action plan or is noncompliant with the model's requirements.


CJR COMPLIANCE REQUIREMENTS

• General Program Compliance

• Hospital Beneficiary Notification Compliance

• Collaborator Beneficiary Notification Requirements

• Collaborator Compliance Plan

CMS may add 25% to a repayment amount on a participant hospital's reconciliation report if the participant hospital fails to timely comply with a corrective action plan or is noncompliant with the model's requirements.


CJR CRITICAL SUCCESS FACTORS

Care Redesign Implementation Episode-focused care redesign that improves quality care, reduces variation and decreases cost across the continuum

Episode Data Collection and AnalyticsUnderstand where you are, where

you need to focus and how your results are emerging

Provider Alignment Creating the right

formal/informal agreements to drive

provider alignment through impactful

engagements that improve care and

reduce cost under the bundle

Understand Data

Redesign Care

Align Providers


POWER OF PARTNERSHIP

Your CJR success is what we were built to do:

Performance Intelligence to help you understand, benchmark and make informed decisions

Implementation Programs to drive care redesign

Alignment Strategies to align risk-based incentives

Understand Data

Redesign Care

Align Providers


COMPREHENSIVE EPISODE MANAGEMENT

Understand Data

RedesignCare

AlignProviders

P R E - H O S P I TA L I N PAT I E N T P O S T - A C U T E

Patient-Reported Outcomes (PRO)

Hospital-Reported Outcomes (HRO)

CMS Claims Analysis

Coordinated System of Care

Integration Models

M E D I C A L D I R E C T O R S H I P

G A I N S H A R I N G A G R E E M E N T

C O - M A N A G E M E N T A G R E E M E N T

C L I N I C A L LY I N T E G R AT E D N E T W O R K

PRO


C J R C R I T I C A L S U C C E S S FA C TO R S :

UNDERSTAND YOUR DATA

We have the capability and expertise to...

• Use your internal hospital data to measure historical, current and ongoing performance within your facility

• Process your external CMS claims data to understand CJR program, opportunities, risks and impact

• Capture patient reported outcomes (clinical and functional) and satisfaction to improve quality composite score

• Validate your CMS data for accuracy and discrepancies

• Analyze reconciliation data to inform gainsharing models

Our Performance Intelligence solution is more than data collection, it’s your action plan for care transformation and provider alignment.

UnderstandData


CJR requires achievement of certain levels of performance in a composite quality score in order to receive any annual cost savings

Dashboards that track and benchmark hospital performance• Patient clinical, functional and satisfaction outcomes• CJR composite quality score (complications and

patient satisfaction) • Maximize key opportunities for CMS payments • Gainsharing metric reviews

• Especially useful when gainsharing on internal cost savings, normally complicated and contentious calculations

Performance analyst quarterly data reviews• Review key metrics that impact internal costs and quality• Build/adjust care redesign program using expert data analysis



Internal Data Collection and AnalyticsHospital Reported OutcomesUnderstand

Data




External Claims DataBundled Payment Analytics

CJR requires achievement of certain levels of performance in a composite quality score in order to receive any annual cost savings

Detailed financial and actuarial analysis on CMS claims data • Manipulate, validate and interpret your data for variation and

opportunity assessment• Reconcile your CMS claims data to ensure you’re maximizing payment• Validate your target prices • Benchmark your performance vs. your history, your region and best practice

CJR dashboard and reporting• Volume and episode cost analysis• Post-acute analysis• Readmissions • Preliminary estimated NPRA

Gainsharing structuring and calculations• Use CMS claims and quality data to help you structure and drive your program

UnderstandData


Your financial outcomes will be directly impacted by your quality performance

Each quality measure is weighted to impact the overall composite score

Total composite score determines:

1. Eligibility to receive positive Net Payment Reconciliation Amounts (NPRA)

2. Target price discount rate for reconciliation payment and repayment

Quality Measure Weight Contributed to Composite Score

THA/TKA Complications 50%

HCAHPS 40%

PRO 10%



Composite Quality ScoringUnderstand

Data


Quality hurdle for reconciliation eligibility: participant must have a hospital composite score of 4 or greater to qualify and receive positive NPRA

Performance Year

Composite Quality Score Quality Category

Eligible for Reconciliation

Payment

Eligible for Quality Incentive

Payment

Discount for Reconciliation

Payment

Discount for Repayment

Amount

1 <4.0 Below Acceptable No No 3.00% Not applicable

≥4.0 and <6.0 Acceptable Yes No 3.00% Not applicable

≥6.0 and ≤13.2 Good Yes Yes 2.00% Not applicable

>13.2 Excellent Yes Yes 1.50% Not applicable

2-3 <4.0 Below Acceptable No No 3.00% 2.00%

≥4.0 and <6.0 Acceptable Yes No 3.00% 2.00%

≥6.0 and ≤13.2 Good Yes Yes 2.00% 1.00%

>13.2 Excellent Yes Yes 1.50% 0.50%

4-5 <4.0 Below Acceptable No No 3.00% 3.00%

≥4.0 and <6.0 Acceptable Yes No 3.00% 3.00%

≥6.0 and ≤13.2 Good Yes Yes 2.00% 2.00%

>13.2 Excellent Yes Yes 1.50% 1.50%

Composite Quality Score: Payment and Repayment



UnderstandData


VOLUNTARY PATIENT REPORTED OUTCOMES

• The percent of eligible procedures to be reported ramps up by performance year from 50% in year 1 to 80% in year 5

• Reporting of PRO adds to the overall composite score which reduces the discount on target prices

• Timing of collection for post-op data elements is between 270-365 days

Final PRO Elements

Date of birth

Race

Ethnicity

Date of admission

Date of procedure

HIC#

Body mass index

Total painful joint count

Chronic narcotic use

Quantified spinal pain

SILS2 questionnaire

VR-12 OR PROMIS-Global

KOOS

HOOS



UnderstandData


RedesignCare


REDESIGN YOUR CARE

We have a dedicated clinical implementation team committed to…

• Leveraging your episode data to redesign care to drive success under CJR.

• Building alignment between the hospital, providers and staff.

• Standardizing clinical protocols and care pathways.

• Reducing variation to improve quality and patient satisfaction.

• Care coordination across the entire continuum.

• Streamlining post-acute utilization and optimization.

Care Redesign solutions are everywhere but only an Implementation Program is going to help reduce variation and drive transformation in care delivery across your entire Total Joint episode.


Redesign care across the Total Joint episode to:

• Deliver care to differentiate your hospital from those in your region

• Standardize care delivery process/protocols

• Align/engage administration, staff and providers

• Reduce cost drivers and improve quality metrics and patient satisfaction through outcomes management

• Focus on post-acute utilization/efficiency to control episode spend and readmissions

• Maximize CJR composite quality score to ensure gainsharing goals and success


REDESIGN YOUR CARE

Redesign Your Total Joint EpisodeDestination Centers of Superior Performance®Redesign

Care



REDESIGN YOUR CARE

Comprehensive Episode ManagementWhat We Do:Redesign

Care


AlignProviders


ALIGN YOUR PROVIDERS

We are able to help drive provider engagement that…

• Fully complies with CJR compliance regulations

• Fosters collaboration with select, proven-value providers (surgeons and post-acute providers)

• Incentivizes providers to change practice patterns

• Utilizes data and targets to drive fair and compliant gainsharing

Care Coordination is critical, but designing an Alignment Strategy that incentivizes provider engagement will drive success under CJR.

NOTE: All gainsharing structures must be independently evaluated by the client and their legal counsel for compliance with legal and regulatory gainsharing requirements. Stryker Performance Solutions does not provide legal advice.


Collaborator Agreements

The content of the collaborator agreement outlined in the final rule resembles items that are required by CMS for BPCI in the form of an implementation protocol.

Likely elements include:

• Information about planned care redesign and care coordination

• A description of how success will be measured

• Management and staffing information

• Required to ensure that the collaborator is in good standing with Medicare and has a valid TIN or NPI

• Collaborator must have a CJR compliance program

• Methodology for accruing and calculating internal cost savings

• Describe quality criteria for the collaborator

Note: Collaborator must meet hospital defined quality criteria in order to receive a gainsharing payment.



AlignProviders


• Strategic selection of provider partners

• Gainsharing structures to maximize results for patients, providers, physicians and payors

• Metrics and targets to incentivize episode-focused quality improvement and cost reduction

• Internal cost saving calculations using Hospital Reported Outcomes



We help you design, implement and manage alignment structures through:

NOTE: All gainsharing structures must be independently evaluated by the client and their legal counsel for compliance with legal and regulatory gainsharing requirements. Stryker Performance Solutions does not provide legal advice in the development of a gainsharing structure. Data was taken from the Original Reconciliation of Quarter 2 2014. The results are for illustrative purposes only of what can be achieved. The results are not a guarantee of what will be realized. The physicians shown may have a different gainsharing arrangement than one being implemented. Physicians A and B met their capped limit.

AlignProviders



Your CJR success is what we were built to do:




Understand Data

Redesign Care

Align Providers

Partnering with SPS empowers you to be successful in CJR


P O W E R O F PA RT N E R S H I P :

BUNDLED PAYMENT EPISODE COST REDUCTION

Baseline includes claims data from July 2009 through June 2012. 2014 includes the full year of claims data.

* In the first performance year

SPS Client Average DRG 470 Episode Cost Baseline vs. 2014

On average, our BP clients have reduced their

episode cost by

10%*

Are you considering a partner who is…• Taking full downside risk in Bundled Payments for Care Improvement program exclusively for the Total

Joint episode of care

• Proven in Care Redesign solutions that help align providers and hospitals

• Worked on over 30 bundles across 25 organizations, with a focus on Total Joint Bundles

• Providing actionable dashboard information using internal data and also reconciling it with CMS claims data

• Conducting CMS data audits and reporting discrepancy in results and corrections to NPRA reconciliations worth thousands of dollars



Denotes CJR quality composite score metrics: complications and patient satisfaction

We’ve helped over 250 clients transform and redesign care

1 Year Post Launch

Joint Replacement Before Launch SPS 50th Percentile SPS 75th Percentile SPS 90th Percentile

Metric Average Result Annual Impact Result Annual

Impact Result Annual Impact

Annual Volume (First Year) 395 435 40 480 85 581 186

Reimbursement $5.0 M $8.2 M $750,000 $9 M $1.6 M $10.9 M $3.5 M

Length of Stay 3.25 2.95 $65,250 2.67 $139,200 2.47 $226,590

Discharge Home 67% 79% $339,300 85% $561,600 89% $830,830

Complications 2.4% 1.6% -0.8% 0.6% -1.8% 0.5% -1.9%

Readmissions 2.7% 2.4% -0.3% 1.7% -1.0% 1.2% -1.5%

Blood Transfusion 20% 13% $26,970 8% $56,640 4% $90,636

Patient Satisfaction N/A 97% 98% 100%

Example provided for illustration purposes only and should not be construed as a guarantee of future results



Denotes CJR quality metrics: complications, readmissions and patient satisfaction

Our database contains over 400K patient records from over 250 clients


WHY SPS?

• Specialist, not Generalist

• Comprehensive approach with Data Analytics, Care Redesign and Provider Alignment

• Proven Care Redesign solutions, since 2005 (250+ implemented programs nationwide)

• Experience with all CMS Bundled Payment programs

• Experts in risk-based payment programs with proven results

• Our orthopedic registry includes 250+ hospitals with 500,000 patient records and 1,500 surgeons

• We have helped our clients reduce their episode cost by 10% on average

• CMS claims data analytics, reconciliation, and discrepancy reporting

• A dedicated team assigned to you that includes: • CJR Project Manager• Data Performance Analyst• Care Redesign Program Manager (RN/PT)

• Shared Risk agreements plan options

• Experienced implementation team of Orthopedic Surgeons, Administrators, Actuaries, Financial/Data Analysts, Clinical Managers, Lawyers



This is what you need to do:

Understand Redesign Align

This is what we are built

to do:




Understand Data

Redesign Care

Align Providers


Y O U R C J R PA RT N E R

Questions?The Power of Partnership


SAVE THE DATE

9th Annual Orthopedic and Spine Summit:Optimizing Patient Care throughout the Continuum

• Reducing Variation within the Joint Replacement Episode to Drive Care Transformation (Including Outpatient Joint Care)

• Developing a Standardized Process for Geriatric Fracture Care• Navigating the Care Pathway for the Spine Patient• Achieving Operational Excellence through Surgical Service Optimization• Using Data to Understand, Build and Maintain Care Pathways• Keeping Physicians & Practice Models Relevant, Profitable and Efficient

Physician and Hospital Executive Leadership CoursePreparing for Fundamental Payment Reform

• Improving Quality and Cost through Value Based Contracts• Medicare’s Comprehensive Care for Joint Replacement (CJR)

Is it in Everyone’s Future?• Engaging Physicians to Drive Patient Centric Change Under CJR and Bundled

Payment for Care Improvement (BPCI) Initiative• Gainsharing Metric Development Workshop

C C J R V S . C J R


PROPOSED CJR VS. F INAL CJR

Proposed Comprehensive Care for Joint Replacement (CJR)

FINAL Comprehensive Care for Joint Replacement (CJR)

Participation Type Mandatory for all Acute Care Hospitals in 75 MSAs; 90 day post-discharge duration only.

Mandatory for all Acute Care Hospitals in 67 MSAs; 90 day post-discharge duration only.

Quality Metrics Fixed Metrics (hospital) - Minimum thresholds must be achieved for Complication Rate, Readmission Rate, & HCAHPS to receive NPRA.

Fixed Metrics (hospital) – a composite score for Complication Rate, HCAHPS & PRO that provides financial incentive for performance and improvement. Hospital chooses quality metric(s) for collaborator gainsharing.

Basis for Target Price Blended hospital-specific and regional spending with increasing emphasis on regional spending, from rolling 3 year baselines. Prospectively developed trend factors.

Blended hospital-specific and regional spending with increasing emphasis on regional spending, from rolling 3 year baselines. Prospectively developed trend factors. Now includes risk stratification for hip fracture.

Target Price Discount Discount 2% of target price reduced by 0.3% if entity complies with voluntary reporting

Discount 1.5 to 3% of target price based on achievement with quality metrics. Discounts for the purpose of deficit calculations are reduced by 1% in year 2.

Positive & Negative NPRA Caps & Exclusions

Same as BPCI. Hospital cannot receive more than 20% of the target price. Maximum savings achieved by entity set at 20% of the target price. Physician and non-physician gainsharing capped at 50% of their fees.

Upside and downside caps scaled by year increasing from 5% in year 1 (no downside risk in year 1), 10% in years 2-3,and 20% in years 4-5 of the target price. Physician and non-physician gainsharing capped at 50% of their fees.

Stop-Loss Limit Awardee cannot lose more than 20% of dollars at risk (target price times the number of episodes)

Maximum deficits charged to entity set at 0 for year 1. Scaled by year increasing from 5% in year 2, 10% in year 3, and 20% in years 4-5 of the target price

Readmissions Inclusions/Exclusions

Exceptions for specific exclusions around Trauma/Oncology

Unclear how much it differs from BPCI. Includes hospice services, which are excluded under BPCI.

Compliance Very few compliance requirements Significant complex compliance requirements

This new proposal does not affect the ongoing Bundled Payment for Care Improvement (BPCI) pilot upon which it is modeled. For those organizations currently enrolled in BPCI, the program will continue to operate under its existing parameters for the full three year contracts unless CMS issues specific rule changes that indicate otherwise.

S P S O F F E R I N G


CJR PORTFOLIO OFFERING

Opportunity Assessment

Episode Analytic

s

Episode Management

Episode Cost Analysis• Analysis of 100% claims data, prior to CMS data release • Volume and episode financial impact vs. benchmarks • Readmit rates, post acute variability and outliers

Service Line Assessment• On-site interviews, observation and data analysis vs. benchmarks• Care Continuum Delivery Model gap assessment and best practices• Care redesign readiness, recommendations and priorities

CJR Analytics and Support• Intake, validation, manipulation and storage of CMS quarterly claims data• Target price verification, reconciliation analysis and estimated NPRA• Gainsharing structure, metrics and calculation support• Dedicated CJR Program Manager to drive care management process• CJR Education and Implementation Toolkit

Joint Replacement Care Redesign• Implementation of Marshall Steele Destination Center for Total Joint• Standardized care delivery process and clinical protocols • Post-acute utilization and efficiency to reduce spend and readmissions• Hospital & Patient Reported Outcomes quarterly review process


OPPORTUNITY ASSESSMENT

Episode Cost Analysis• Analysis of 100% claims data, prior to CMS data release

• Volume and episode financial impact vs. benchmarks

• Readmit rates, post acute variability and outliers

Service Line Assessment• On-site interviews, observation and data analysis vs. benchmarks

• Care Continuum Delivery Model gap assessment and best practices

• Care redesign readiness, recommendations and priorities


EPISODE ANALYTICS







CJR Analytics and Support• Intake, validation, manipulation and storage of CMS quarterly claims data

• Target price verification, reconciliation analysis and estimated NPRA

• Gainsharing structure, metrics and calculation support

• Dedicated CJR Program Manager to drive care management process


EPISODE ANALYTICS

CJR Education and Implementation Toolkit• Patient notification requirements • Beneficiary protections – review of beneficiary protections under CJR• Gainsharing parameters - clarification of gainsharing requirements, • Collaborator Agreement Guide• Program Waivers • Quality Metrics definition and measurement • Basic CJR Education Materials (suitable for Leadership, Physicians, and Staff)• CJR Exclusion Logic and Rules• How CJR, BPCI and ACOs Work Together• Mock Reconciliation Explanation and Walk-through• Facilitate Hospital Data Request per CMS requirements• Compliance Requirements/Plans for gainsharers and hospitals


EPISODE MANAGEMENT







CJR Analytics and Support• Intake, validation, manipulation and storage of CMS quarterly claims data

• Target price verification, reconciliation analysis and estimated NPRA

• Gainsharing structure, metrics and calculation support

• Dedicated CJR Program Manager to drive care management process

• CJR Education and Implementation Toolkit

Joint Replacement Care Redesign• Implementation of Marshall Steele Destination Center for Total Joint

• Standardized care delivery process and clinical protocols

• Post-acute utilization and efficiency to reduce spend and readmissions

• Hospital & Patient Reported Outcomes quarterly review process


EPISODE MANAGEMENT

Implementation Tool Kit Delivered with Education• Patient notification requirements • Beneficiary protections – review of beneficiary protections under CJR• Gainsharing parameters - clarification of gainsharing requirements, • Collaborator Agreement Guide• Program Waivers • Quality Metrics definition and measurement • Basic CJR Education Materials (suitable for Leadership, Physicians, and Staff)• CJR Exclusion Logic and Rules• How CJR, BPCI and ACOs Work Together• Mock Reconciliation Explanation and Walk-through• Facilitate Hospital Data Request per CMS requirements• Compliance Requirements/Plans for gainsharers and hospitals

D ATA A N A LY T I C S D E TA I L S


CJR DATA ANALYTICS TIMELINE

* Pending CMS data delivery timeline and content

OCT NOV DEC2016JAN FEB MAR APR MAY JUN JUL AUG

SEPT OCT NOV DEC

2017JAN FEB MAR APR MAY JUN JUL

Episode Cost Opportunity Analysis

Target Price Analysis with Detailed Baseline Financial Analysis

Ongoing Quarterly Reporting and Analysis

Annual Reconciliation Analysis

*


EPISODE COST OPPORTUNITY ANALYSIS

• Development of estimated target prices and potential financial opportunity relative to benchmarks

• Analysis of key metrics across facility, system (if applicable), region and benchmarks:

- Average episode costs by type of service- 90 day readmission rates- Assessment of high cost outlier cases- Volumes

Stryker Performance Solutions will provide the information your organization needs to understand the opportunities, risks and potential financial impact of CJR

Our CJR Episode Cost Analysis is a financial and actuarial analysis of the potential financial opportunity


TARGET PRICE ANALYSIS WITH DETAILED BASELINE FINANCIAL ANALYSIS

• Volumes and Mix by DRG and hip fracture status in baseline and trends over time

• Verification of target prices- Including blended facility and regional costs, hip fracture stratification,

national trends factors, proration, discount and other CJR specifications

• Episode cost trends by year comparing facility, system and region• Post acute usage trends

- Drivers of cost (type of service, LOS, provider)- Top providers by type of claim (SNF, HH, IRF)- Usage and mix by category

• Financial opportunity- Reflecting most recent actual average episode costs, baseline target

prices and benchmarking comparisons- Comparison to best practice and national benchmarks

• Readmission trends to drill into types of readmissions, frequency and leakage

• Outlier impact to determine magnitude of cases above thresholds by DRG and hip fracture status

Stryker Performance Solutions will validate the target prices and provide recommendations for next steps under CJR

Our detailed analysis validates the target prices set by CMS and identifies areas of opportunity and focus


ONGOING QUARTERLY REPORTING AND ANALYSIS

• Episode cost analysis

- Relative to target prices, baseline and trends over time

- Cost trends by year comparing facility, region and national costs

- Analysis of cost variation by first site of service post discharge

• Post acute analysis relative to baseline and trends

- Drivers of cost (by type of service, LOS, provider)

- Usage rates and mix of services

• Readmission analysis relative to baseline and trends

- Frequency, location and type of readmission

• Outlier impact analysis

• Volume analysis by DRG and hip fracture status and mix changes over time

Stryker Performance Solutions will provide actionable information to compare emerging results to expectations and drivers of variance

Our Quarterly Reporting and Analysis monitors results relative to expectations


ANNUAL RECONCILIATION ANALYSIS

• Review of results- Review of results relative to quarterly reporting and

internal documentation

- Validation of results relative to CMS detailed files

- Training on optional internal audit process to validate episode volumes and support discrepancy reporting to CMS

• Analysis- By DRG and hip fracture status and episode initiator

- Operating physician comparison

- Post acute usage analysis

• Gainsharing- Financial modeling of results

- Summary of distribution by gainsharing entity

Stryker Performance Solutions will provide analysis of reconciliation results and gainsharing distributions

Our Reconciliation Analysis verifies CMS results, identifies drivers and determines gainsharing allocations

S A M P L E B U N D L E D PAY M E N T A N A LY T I C S R E P O R T S


HOSPITAL Q2 2014-Q1 2015 AVERAGE EPISODE COST AND VOLUME BY PHYSICIAN

$0

$10,000

$20,000

$30,000

$40,000

$50,000

0

10

20

30

40

50

60

70

13

4

33

32 35

58

37

33

Average episode cost by Operating PhysicianDRG 470 (w/o hip fractures) 2014

Avg - Index Admit Avg - Professional Avg - OP_DME Avg - Readmit Avg - HHAAvg - SNF Avg - Other IP PAC Episodes - Index Admit

Ep

iso

de

Vo

lum

e

Physician A Physician B Physician C Physician D Physician E Physician F Physician G Physician H

All physicians should look to reduce IP PAC costs when clinically appropriate. Hospitals’ IP PAC costs and utilization for Total Joint Replacements of the Lower Extremity are unusually high compared to what is seen around the rest of the country.

Average costs are untrimmed for outliers. During actual reconciliations episodes will be trimmed at 2 standard deviations above the regional mean.

EXAMPLE ONLY


HOME HH SNF OTHER IP PAC$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

Average Episode Cost by First Site of Service 2014

Index Admit OP_DME Professional Readmit Post Acute

DRG 470 EPISODE COST BY FIRST SITE OF SERVICE (W/O HIP FRACTURES)

Patients discharged home or with home health have far lower episode costs than SNF and IP PAC discharges.

EXAMPLE ONLY


DRG 470 DISTRIBUTION BY FIRST SITE OF SERVICE (W/O HIP FRACTURES)

Baseline 2014Q2 2014Q3 2014Q4 2015Q10%

25%

50%

75%

100%

FSS Distribution Q2 2014-Q1 2015

HOME HH SNF OTHER IP PAC

Distribution by discharge disposition has not changed much since the baseline although overall post acute care costs per episode have increased dramatically. Opportunities exist to reduce the use of IP PAC and reevaluate the HHAs and SNFs to which patients are discharged.

EXAMPLE ONLY


2014 DRG 470 AVERAGE SNF COST BY PROVIDER (W/O HIP FRACTURES)

SNF J| 2 Stars

SNF I| 3 Stars

SNF H| 5 Stars

SNF G| 3 Stars

SNF F| 4 Stars

SNF E| 3 Stars

SNF D| 2 Stars

SNF C| 4 Stars

SNF B| 5 Stars

SNF A| 3 Stars

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000

0 5 10 15 20 25 30

2

2

21

2

6

5

6

24

2

3

2014 DRG 470 SNF Providers by Cost per Service

Episode count Avg Trended Final Pmt

• The majority of episodes discharged to SNFs are going to SNF C and SNF H; however, average costs at SNF C exceed average costs at SNF H by $7,000

• Costs reflect average episode cost for SNF services on episodes that have those services; costs are not trimmed for outliers• Providers listed reflect the top 75% of the total volumes of SNF providers

EXAMPLE ONLY


90 DAY READMISSION RATES—DRG 470 (W/O HIP FRACTURES)

Baseline 2014Q1 2014Q2 2014Q3 2014Q40%

5%

10%

15%

20%

• In Q4 2014, readmission rates are down from the baseline at both hospitals• Readmits represent 90 day readmits to any facility for DRGs that are considered related for the BPCI family according to CMS methodology; some DRGs

are excluded• Readmit rates and counts reflect patients who are readmitted during an episode of care, not the number of times they are readmitted

EXAMPLE ONLYHospital AHospital B

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