Navigating the New Era of Accountable Care Organizations

and ReimbursementDaniel C. DeMarco, MD

Texas Society for Gastroenterology and Endoscopy

September 19, 2015

Disclaimers

• Chairman of the Finance and Contracting Committee for Baylor Scott & White Quality Alliance Accountable Care Organization

• Vice-chairman of the Board of Managers of Baylor Scott & White Quality Alliance Accountable Care Organization

• Governor of the North Texas Region for the American College of Gastroenterology

PPACA

• Passed in 2009• AKA “Obama care”• Healthcare Reform• Insurance Reform• Alternative Payment Models• Meaningful Use• Quality Metrics

6

Population Health: 2 Mandates

Value

Value = Quality (+Access) Cost

The “Triple Aim”

STEEEP Care

“The overarching goal for providers, as well as for every

other stakeholder, must be improving value for patients”

– Michael E. Porter –

Accountable Care Organizations

• Part of and possible because of the PPACA• Physicians and Healthcare Systems become

accountable for expenditures– Stakeholders– Skin in the game– Accept shared savings– Accept up and down side risk

Why ACO’s?

• Right thing to do?– No longer just spending other peoples money– Spenders (physicians and Healthcare Systems)

now held accountable for delivering high value care

• Last chance for Physician’s to have control over their destiny

• Only way to enhance productivity in the near future

9

ACO Components Built

▪ Mission▪ Vision▪ Culture▪ Strategic financial plan and operating budget developed

Strategic Development

▪ Physician-led Board of Managers▪ Five primary committees activated▪ Twenty-five subcommittees

Governance

▪ Network adequacy▪ Credential verification▪ Regional care needs assessment▪ Exceeded budgeted revenue stream through FY14

Network Development

▪ Informatics infrastructure▪ Data analytics implementation▪ Physician dashboard▪ Member website deployment▪ EMR subsidy program

Information Technology

▪ RN Health Coaches▪ Care Coordinators▪ PCMH Design ▪ Population Health

Care Management

▪ BHCS Employee Health Plan

▪ Aetna MA▪ Humana MA▪ Scott & White

Health Plan▪ Shared

Savings Distribution Model

Contracting/ Compensation

Why should PCP’s join an ACO?

• Ensure a continuous flow of patients• Help with compliance with new regulations

– Meaningful use– EHR– PCMH certification

• Care Coordination• Maintain some control (not autonomy)• Additional revenue

Why should a specialist join an ACO?

• Ensure continued referrals• Participate in care protocols• Additional committee work• Minimal if any additional revenue• Minimal negotiation

– Possible bundles of care?

Shared Savings

• Projected PMPM expenditures minus actual expenditures

• Often adjusted for outliers with stop loss insurance

• Savings is distributed amongst stakeholders according to a mutually agreed upon formula

Shared Savings Distribution

• BSWQA• Others

Distribution to Physicians

• “Shared”• 10% shared equally amongst all those meeting clinical

integration criteria• 70% shared amongst PCP’s according to volume and

PCMH level• 20% shared amongst specialist on a pro rata basis

• If clinical integration criteria are not met, there is no participation in any shared savings!

BSWQA Performance Year 2014 Shared Savings

Trent Hadley

Shared Savings Funds Flow – Based Upon Plan Year 2014

Gross Health Plan Savings

$9,925,983

Net Shared Savings Pool

$8,542,704

50% of Net Shared Savings Pool Applied as a Reduction in Funding

to the Trust in Following Year$4,271,352

Recover Costs of Care Coordination Services

$1,383,279

Repayment of Amounts Paid In Advance by BSW NTX Health

Plan

12.5% of Net Shared Savings Pool to Member

Hospitals $1,067,838

12.5% of Net Shared Savings Pool to

Eligible Physicians$1,067,838

50% of Net Shared Savings Pool To BSWQA

$4,271,352

25% of Net Shared Savings Pool Retained

by BSWQA*$2,135,676

*The percentage retained by BSWQA to cover initial capital contributions by Members and operating losses will be reduced to 0% when operational break-even is achieved and all cumulative losses from prior years have been recovered..

Member

BQA

Calculation of savings is based on Allowed health plan related expenses, including employer related costs, employee related costs, plan design changes, and adjusted for high cost claims considered unmanageable.

For the periods 01/01/2014 thru 12/31/2014

Baylor Scott & White Quality Alliance2014 Shared Savings Calculation – Medicare Advantage

25% Distributed to Member Hospitals (other op. income)

$332,150

25% Distributedto Participating

Physicians$332,150

50% Distribution To BSWQA$1,328,602

50% retained by BSWQA to cover losses*

$664,301

Member

BSWQA

For the periods 01/01/2014 thru 12/31/2014

*The percentage retained by BSWQA to cover initial capital contributions by Members and operating losses will be reduced to 0% when operational break-even is achieved and all cumulative losses from prior years have been recovered..

Baylor Scott & White Quality Alliance2014 Shared Savings Physician Distributions

• Total Shared Savings Distributions to Member Physicians• $1.4 Million – 1,061 Member Physicians Met Clinical Integration Criteria

• Primary Care Physician Pool – 294 Member PCPs Met Clinical Integration Criteria• Average Distribution to PCP - $3,500• Highest Earner - $14,000

• Specialty Pool – 767 Member Specialists Met Clinical Integration Criteria• Average Distribution to Specialist - $500

Baylor Scott & White Quality Alliance2014 Shared Savings Member Hospital Distributions

• Member Hospital Criteria Based on FY2015 AIP Goals• Readmission Performance Goal – 40%• VBP Care Bundle Performance Goal – 28%• Hospital Acquired Conditions Goal – 32%

Member Hospital Shared Savings Distribution

BSW NTx Aetna MA Humana MA SW MA Total

Baylor University Medical Center 14.2% 151,645.72$ 23,173.68$ 13,189.21$ 10,806.43$ 198,815.04$ Baylor Scott & White Medical Center Waxahachie 16.2% 173,002.48 26,437.31 15,046.69 12,328.34 226,814.81 Baylor Regional Medical Center Grapevine 10.8% 115,237.52 17,609.98 10,022.65 8,211.95 151,082.10 Baylor Medical Center Carrollton 16.2% 173,002.48 26,437.31 15,046.69 12,328.34 226,814.81 Baylor Regional Medical Center Plano 3.8% 40,234.61 6,148.44 3,499.36 2,867.16 52,749.57 Baylor Medical Center Garland 16.2% 173,002.48 26,437.31 15,046.69 12,328.34 226,814.81 Baylor Medical Center Irving 6.4% 68,710.29 10,499.94 5,976.00 4,896.37 90,082.60 Baylor All Saints Medical Center 16.2% 173,002.48 26,437.31 15,046.69 12,328.34 226,814.81

100.0% 1,067,838.06$ 163,181.25$ 92,874.00$ 76,095.25$ 1,399,988.56$

Total Distribution %

Clinical Integration Criteria

• Necessary to participate in shared savings and negotiations

• Seemingly onerous and a “waste of time”• Absolutely necessary to receive funds

– If not clinically integrated, What are you being paid for?

– You have already been paid fee for service• Many feel FFS is all one deserves to get!

ACO’s

• Not an Insurance Company– Currently administered through a traditional entity– BSWQA works with:

• Aetna• Humana• United• SWHP• Medicare (MSSP)• Negotiating with the Blues

Reimbursement• Joel Brill, MD, FACP, AGAF, FASGE Faculty and Presenter at GO

2015“The Future of GI Reimbursement: A Shifting Landscape” • “CMS has proposed to reduce payment for diagnostic

colonoscopy, 45378, from 3.69 to 3.29. This 0.40 reduction in RVW represents a cut of approximately 11% across all colonoscopy procedures, which may be magnified by other adjustments to endoscopic reimbursement. In addition, Medicare has laid the groundwork for removing moderate sedation from endoscopic procedures, and revaluing anesthesia for endoscopic procedures, effective in 2017. Along with Medicare’s proposal to reduce ASC facility reimbursement for colonoscopy procedures by almost 3%, Gastroenterology is facing significant and unprecedented threats to our profession.”

Reimbursement

• Cuts to procedures– Proposed 10-20%– Effective Jan 2016

• Separation of sedation component of G-code procedures– Moderate sedation for endoscopic procedures

surveyed with very short notice last July– Transparency????

More on Reimbursement

• Cuts were coming• Actually, we were lucky in that they were

delayed a year• Your societies (ACG, AGA and ASGE) have

people working full time to preserve your revenue stream and ensure the survival of your practice

• Many challenges

Why Bundled Colonoscopy?

• Decreasing Reimbursement• Defined episode of care with a defined

beginning and end.• Extreme variation in charges.• High demand and costs.• It is the only procedure that everybody gets.• Competition with other colon cancer

screening modalities.

Summary

• Join an ACO or two• Consider APM’s• Consider bundles• Expect declines in FFS• Get paid for value, not procedures