FINAL EXAMINATION DUE: 11:59 PM, MAY 24 HSA 312 - 01: MANAGED HEALTH CARE · PAYING PROVIDERS. · UTILIZATION MANAGEMENT ¨ ¨ ¨ ¨ ¨ ¨ QUESTIONS TO BE AN

The Maryland P4P Experience Norbert Goldfield, MD, Medical Director, Clinical and Economic Research, 3M Health Information Systems Carol Everhart, RN, MS Director of Quality Initiative s, Western Maryland Health System (Cumberland, MD) 1© 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M. 3M Health Information Systems Pay for Performance:

Aligning quality outcomes with financial performance ƒUltimate goal is to improve patient care, improve population health, imp\ rove patient experience, and reduce costs ƒ Align interest of patient, provider, payer and purchaser ƒ Identify cost reduction opportunities on a continuous basis ƒ Determine gain-sharing opportunities for providers based on quality of c\ are provided, a performance scorecard © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

2 3M Health Information Systems Transforming the inpatient hospital payment system 3© 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M. Pay for Outcomes Outcomes Adjust payments to hospitals based on their complication and readmission rate Hospital Incentive Improve quality outcomes Best Practice Identify the hospitals with lowest complication and readmission rates Pay Adjust payments to hospitals to reflect their complication and readmission rate compared to best practice Impact Revised payments to hospitals result in a net savings of X% Benefits:

Immediate savings Short- and long-term incentives to improve quality 3M Health Information Systems Maryland’s outcomes, quality-based payment hospital acquired conditions program ƒMaryland HSCRC sets hospital rates for all payers ƒ In 2009, MD HSCRC began adjusting individual hospital inpatient rates based on hospital’s risk-adjusted 3M Potentially Preventable Complica\ tion (PPC) performance ƒ Incentivizes hospitals to reduce potentially preventable complications \ ƒ MD measures hospital performance using 49 of the 3M PPCs-a much more comprehensive list than the CMS HACs ƒ In two years following implementation, statewide rate of PPCs dropped by 20% removing over $105 MM of inpatient costs from the system ƒ Considerable variation among hospitals in PPC performance © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

4 3M Health Information Systems Potentially preventable complications (PPCs) Harmful events (accidental laceration during a procedure) or negative \ outcomes (hospital acquired pneumonia) that may result from the proces\ s of care and treatment rather than from a natural progression of underlyi\ ng disease © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

5 3M Health Information Systems Assumptions ƒNot all inpatient complications are preventable ƒ Even with optimal care inpatient complications will occur ƒ Patients who have had a problem with the quality of care will be more likely to have an inpatient complication ƒ Hospitals with quality of care problems will have higher rates of inpati\ ent complications ƒ A patient’s risk of an inpatient complication is related to the patie\ nt’s reason for admission and severity of illness at the time of admission © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

6 3M Health Information Systems Key themes ƒFocus on high impact outcomes ƒ Methodology that is:

ƒ clinically based ƒ transparent ƒ actionable (i.e. drill down) ƒ Incentives based on severity-adjusted relative performance and best practice ƒ Patient-based risk adjustment (i.e. multip ly interacting co-morbid conditions) ƒ Flexible payment options ƒ shadow system ƒ built in savings upfront © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

7 3M Health Information Systems Determining PPCs: A general rule If a hospital or other health care facility has a statistically signific\ antly higher rate of a complication (or group of complications) than comparable hospitals and facilities, reasonable clinicians would be concerned that \ a potential quality of care problem exists, and would suggest further investigation in order to account for the difference. © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

8 3M Health Information Systems Maryland’s focus: PPCs ƒComplications unlikely to be a consequence of the natural progression of\ underlying illness ƒ Not present when patient first admitted ƒ Associated with care during hospitalization ƒ Examples: UTI, Septicemia, Iatrogenic pneumothorax, encephalopathy ƒ Maryland hospital acquired conditions (HACs) ƒ Set of 49 ƒ Expansion beyond the Medicare HACs © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

9 3M Health Information Systems Top 15 PCCs by cost (multiple states and payer data) 10 © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M. Description FreqCost of PPC % Pat Cost Post-Operative Respiratory Failure with Tracheostomy 164 $118,841 50.78% Renal Failure with Dialysis 620 $47,888 38.53% Decubitus Ulcer 1,668 $28,272 31.16% Post-Operative Wound Infection & D eep Wound Disruption with Procedure 200 $27,814 29.67% Acute Pulmonary Edema and Respiratory Failure with Ventilation 2,725 $27,134 30.08% Gastrointestinal Ostomy Complications 732 $25,882 31.33% Clostridium Difficile Colitis 2,478 $25,401 31.11% Extreme CNS Complications 675 $23,526 24.02% Septicemia & Severe Infections 7,018 $23,451 26.59% Infection, Inflammation and Clotting complications of Peripheral Vascular Catheters and Infusions 3,399 $22,747 26.32% Major Gastrointestinal Complications with Transfusion or Significant Bleeding 530 $21,923 29.86% Reopening Surgical Site 408 $19,442 29.16% Other Gastrointestinal Complications without Transfusion or Significant Bleeding 910 $17,886 26.17% Pneumonia & Other Lung Infections 10,781 $16,901 24.89% Pulmonary Embolism 1,057 $16,331 25.44% 3M Health Information Systems Achieved results ƒMaryland All Payer ƒ PPC used for payment adjustment ƒ First year: ƒ 11.9% reduction in PPCs ƒ $ 62.5 million in averted costs to state and providers ƒSecond year: ƒ additional 8% reduction over first year ƒ $ 43 million in additional averted cost © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

11 3M Health Information Systems Why the Maryland approach works ƒTarget is clear, attainable (peers are already doing it) and achieves \ good patient care (not pay for reporting) ƒ The financial return on PPCs within a DRG system is such that the hospitals gain additional profit (reduced cost) in excess of reduced p\ ayment (i.e reduced case mix). Natural gain sharing environment.

ƒ The program is not going away – effort and time spent today will be rewarded tomorrow ƒ After initial opposition the hospitals embraced the change – they have a positive story to tell as a result © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

12 3M Health Information Systems The next frontier: Potentially preventable events ƒMaryland focus:

ƒ PPCs ƒ 1-2% of inpatient hospital ex penditures (Maryland’s focus) ƒCMS focus:

ƒ Potentially preventable readmissions ƒ 2-5% of inpatient hospital expenditures ƒPotentially preventable initial admissions ƒ Potentially preventable ancillary services ƒ Potentially preventable ED visits © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

13 3M Health Information Systems Potentially preventable events A population based (not disease specific) measure of the vast majority of what is potentially preventable in a health system © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

14 Potentially Preventable Readmissions (PPR) Potentially Preventable Complications (PPC) Potentially Preventable Initial Admissions (PPIA) Potentially Preventable Visits (PPV) Potentially Preventable Services (PPS) 3M Health Information Systems Achievable savings on Day 1 ƒPotentially preventable readmissions ƒ 2-5% of inpatient hospital expenditures ƒ Potentially preventable complications ƒ 1-2% of inpatient hospital expenditures ƒ Potentially preventable initial admissions ƒ 4-8% of inpatient hospital expenditures ƒ Potentially preventable ER visits ƒ 1-2% total expenditures ƒ Potentially preventable outpatient ancillaries/ procedures ƒ 2-3 % total expenditures © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

15 3M Health Information Systems Western Maryland Regional Medical Center Western Maryland Health System • Cumberland, Maryland 3M Health Information Systems WMHS overview ƒRegional provider of healthcare services creat ed by the affiliation of Memorial Hospital and Sacred Heart Hospital in April 1996 ƒ New replacement hospital opened in November 2009 ƒ Replaced two aging hospitals with 289 beds ƒ Capacity ƒ 275 licensed beds ƒ248 acute care beds ƒ 16 psychiatric beds ƒ 13 rehabilitation beds ƒ 88 long-term care beds ƒ Statistics – FY2011 ƒ Admissions – 15,521 ƒ Average daily census – 195.8 ƒ Emergency department visits – 55,183 ƒ Region’s largest employer – 2300 employees ƒ Over 250 physicians and advanced practice professionals on staff © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

17 3M Health Information Systems WMHS specialty centers ƒDesignated area-wide trauma center, stroke center and cardiac interventional center by the Maryland Institute of Emergency Medical System Services ƒ WMHS Heart Institute, which includes cardiac surgery ƒ Schwab Family Regional Cancer Center ƒ Surgical specialties include thoracic surgery and spine surgery ƒ Frostburg Nursing and Rehabilitation Center © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

18 3M Health Information Systems Service area ƒWMHS leads the market with a 74% market share in its primary service area © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

19 3M Health Information Systems Value based purchasing (VBP) ƒAuthorized program under Patient Protection and Accountable Care Act 2010 ƒ Gives CMS the power to base a portion of hospital reimbursement on how well hospitals perform in 25 core measures ƒ CMS flex muscle and move from passive bystander to active buyer of higher-quality healthcare © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

20 3M Health Information Systems Score to beat “Anyone above that threshold is in the money. If you didn’t make i\ t, no harm, no foul” -Trent Haywood, MD, JD, chief medical officer of Irving, Texas ƒ Well not exactly – there are winners and losers ƒ VBP – not a collaborative but a competition © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

21 3M Health Information Systems Quality-based reimbursement ƒState of Maryland –implemented in July 2009 ƒ Payment adjustments to hospital rates based on performance of identified measures in calendar year 2008 ƒ Rewards for hospitals performing the best ƒ 0.5% of overall inpatient hospital budget © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

22 3M Health Information Systems Baseline scores are SET ƒJuly 2010 – June 2011 (baseline period) ƒ July 2011 – March 2012 (performance period) ƒ Oct 1, 2012 payment phase ƒ CMS will withhold 1% of base DRG reimbursement ƒ Earn money back based on how well hospital scores on performance measures during evaluation period © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

23 3M Health Information Systems So, what are the measures? ƒ17 core Clinical Process of Care measures ƒ 8 measures based on HCAHPS surveys ƒ Hospital Consumer Assessment of Healthcare Providers and Systems ƒ 20 potential measures are waiting in the wings ƒ Hospital acquired conditions ƒ Patient safety ƒ Inpatient quality ƒ Mortality ƒ Likely to be introduced in FY 2014 © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

24 3M Health Information Systems What are “core measures?” ƒDeveloped to assess the gap between recommended best medical practice and actual applied care ƒ Studies show:

ƒ 29% of failed core measures cases actually received best medical practice care but failed documentation requirements Early, GL, et al. Mo Med. 2011 May-Jun;108(3):179-81 © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

25 3M Health Information Systems PPC examples ƒPPC 1: Stroke and intracranial hemorrhage, identified when a subarachnoi\ d hemorrhage is a secondary diagnosis and not POA ƒ PPC 05: Pneumonia, identified if pneumonia is a secondary diagnosis not \ POA, but only if the LOS > 2 days ƒ PPC 18: Major GI complications with significant bleeding, requires secondary diagnosis not POA, for example, esophageal hemorrhage AND a transfusion procedure 4 or more days after major surgery © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

26 3M Health Information Systems Western Maryland Health System standings 3M Health Information Systems Summary 3M Health Information Systems WMHS PPC dashboard © 3M 2011. All rights reserved 3M Confidential Not For Distribution Potentially Preventable  Condition s Actual Expe c te d Monthly  $$  Impact   YTD $$  Impact September PPC  31 Pressure  Ul ce r 6.00 1.47  per month 99,515.04 $               298,545.12 $           Key  Dr iP resen t  on  Ad m i t  ‐Documentation  miss i 1.00 Hospital  Acquired  Developed  after  day   2 5.00 PPC  1 4Ve ntri c ul a r  Fibrillation/Cardiac  Arr e s t 8.00 2.78  per month 93,584.16 $               298,680.48 $           Key  Dr iMET  Tea m  Calls 0. 00 PPC  4 7Encephalopathy 8.00 1.05  per month 92,462.80 $               290,692.40 $           Key  Dr iP resen t  on  Ad m i t  ‐DocumentationMissing Documented  days  after  admission PPC  4 Ac u t e  Pulmonary  Ed e m a  and  Res p   Fa il ure  with  Ve nti l a t i on   10.00 2.45 per month 166,892.75 $            235,418.25 $        Key  Dr iEa r l y  intervention  (ventilator  support  prior  to  day  3) PPC  2Extreme  CNS  Complica tions 0.00 .47  per  month 0.00 ‐ $                    Th i s  PPC  moved  fro m  under  the  exp ec t ed  range  to  over  the  exp ec t ed  in  3rd  Q  FY  11 ‐  no occurences  noted  in  July PPC  1   Stroke  &  Intracranial  Hemmorrhage 10.00 1.64  per month 42,514.08 $               140,195.24 $           3M Health Information Systems Conclusions ƒDocument, document, document ƒ Coders cannot make assumptions ƒ Diagnosis codes cannot be assigned for abnormal lab values ƒExample: ABG 7.23/56/178 ƒ Diagnosis listed as pathology and radiology reports cannot be coded in t\ he inpatient setting unless the attending physician documents such diagnosis in the record ƒ Be careful, precise and consistent in usin g seemingly similar words that for coding purposes are not interchangeable ƒ “Urosepsis” is to be coded as a urinary trac t infection only unless stated as “sepsis due to urinary tract infection” ƒ Codes can be assigned for “presumed,” “possible” or “probable” condition ƒ DOCUMENT present on admit (POA) conditions ƒ Example: pressure ulcers © 3M 2012. All rights reserved. For conference presentation only. Further use or disclosure requires prior approval from 3M.

30 3M Health Information Systems Why is all this important? ƒComplete, accurate documentation and code assignment have far-reaching benefits ƒ Severity of illness (SOI) ƒ Risk of mortality (ROM) ƒ Accurate codes support your level of billing, assist in accurate reimbursement, and provide meaningful data in outcomes assessment and other quality indicators ƒ Specificity in code assignment provides the full picture of treatment rendered to the patient and can impact reimbursement 3M Health Information Systems Strategies for success ƒStart with high dollar, high volume PPCs ƒ Review cases, service lines, DRGs where you do well and where you have opportunity to improve ƒ Does diagnosis code reflect what was really happening? UTI or asymptomatic bacteriuria ƒ Does POA coding reflect what’s documented or what was POA?

ƒ Codes that increase SOI may also affect PPCs ƒ Quality, finance, clinical, and HIM leadership working together to understand issues and practices