CHA Hollywood Presbyterian Medical Center was accepted into the first cohort of hospitals to participate in the Centers for Medicare and Medicaid Services’ “Bundled Payments for Care Improvement Advanced” model
In this program, CMS sets a “target price” for an episode of care that includes both the acute inpatient hospitalization plus 90 days after discharge. If the cost of care for Hollywood Presbyterian’s patients is below the target price for the episode, then Hollywood Presbyterian receives payment from CMS for the cost savings in the form of a “reconciliation payment.”
However, if the cost of care for Hollywood Presbyterian’s patients is above the target price for the episode, then Hollywood Presbyterian must pay a penalty back to CMS.
“The problem we faced was that Hollywood Presbyterian had no visibility into how much the cost of care was for its patients after discharge,” said Dr. Jamie Chang, chief clinical operations officer at Hollywood Presbyterian Medical Center. “While we had significant data on the cost of care during the acute inpatient encounter, we did not know what costs were being incurred by Medicare after the patient left the hospital.”
Since Hollywood Presbyterian now was faced with financial liability for these costs after discharge, the provider organization decided it needed to partner with vendor Avant-garde Health to help it understand where these costs were being incurred so it could effectively manage them.
The technology Hollywood Presbyterian uses is Avant-garde Health’s Bundle Management Platform. The technology provides Hollywood Presbyterian with detailed insights into the cost of care for patients after discharge.
“This was critical to inform which clinical episodes to sign up for in the program, as we had to understand how our historical performance compared to the target prices provided by CMS,” Chang explained. “In addition, the technology was essential to help us identify which physicians and post-acute facilities to focus our attention and efforts to align incentives for success in the program.”
After the program started, Hollywood Presbyterian began receiving monthly data from CMS to help it track its performance in the program.
“We have continued to use the technology to ingest the data and provide us with meaningful and actionable insights from this information,” Chang stated. “For example, we generate physician-specific scorecards every month to identify which physicians are succeeding in helping us to reduce post-acute spending, and which physicians are struggling. We also review every month where Hollywood Presbyterian’s patients are incurring the most cost after discharge so we can more effectively manage those areas; for example, skilled nursing facility expenses.”
Separately, CMS is encouraging hospitals to use any reconciliation payments to align incentives with physicians and other partners to help achieve these cost savings. Hollywood Presbyterian uses Avant-garde Health’s technology as an independent third party to quantify the cost savings attributable to a particular physician, which then informs the degree of cost sharing Hollywood Presbyterian can provide to the physician.
There is a variety of value-based care systems on the health IT market today. Some of the vendors of these systems include Arcadia, Change Healthcare, Lumeris, Mingle Health, Optum and Quatris Healthco.
MEETING THE CHALLENGE
Hollywood Presbyterian uses the technology on a monthly basis, after each data refresh provided by CMS in the program.
“We have a ‘Continuing Care Team’ comprised of nurse navigators, case managers, nurse practitioners, pharmacists and others who review the data outputs to inform where the team must prioritize and focus its time, attention and energy to effectively manage the cost of care after discharge,” Chang explained.
In addition, the Continuing Care Team meets every quarter with participating physicians to review performance for the individual physicians, and provide a comparison for how a physician is performing relative to his or her peers. The technology provides a fact base to inform these discussions in a productive way, and helps to promote engagement with the physicians to collaborate with the Continuing Care Team, Chang said.
Among many successes, there are three hard results for which the Continuing Care Team are particularly proud.
Across all patients included in the seven selected bundles, Hollywood Presbyterian improved the 90-day readmission rate from 40% to 31%.
“The technology helped us to achieve this through identification of patients who are historically difficult to manage, so we could focus the Continuing Care Team’s efforts to supporting these patients after discharge,” Chang explained. “Similarly, the technology helped us to better understand the readmission rates associated with our surrounding post-acute facilities, so we could develop a narrow network of high-performing facilities to collaborate with in the program.”
On the cost savings front, for patients admitted with a diagnosis of sepsis, Hollywood Presbyterian has achieved cost reductions 14% below the target price that CMS has set for Hollywood Presbyterian for this population of patients.
“This projects to be a $ 3 million reconciliation payment annually for this bundle alone, to help fund program expenses and also generate incremental net revenue for Hollywood Presbyterian,” Chang said. “The technology helped us to achieve this performance by focusing our efforts on the areas of post-acute spending where there is the greatest opportunity to achieve cost-savings.”
Using Avant-garde Health’s national claims database, Hollywood Presbyterian also was able to see its performance relative to other hospitals in the market, to help it identify the areas where it has further room to improve, and the areas where it already is performing well, Chang added.
And Hollywood Presbyterian has seen improvement in CMS quality star rating measures. By participating in the program, Hollywood Presbyterian has been able to use the anticipated reconciliation payments to fund the services, technology and capability to improve its overall hospital quality.
“Specifically, the reduction in the 30-day readmission rate for CHF (40% to 11%), pneumonia (12% to 9%) and acute MI (28% to 18%) all are due to the efforts of the Continuing Care Team leveraging the intelligence provided by Avant-Garde Health’s Bundle Management Platform to drive these meaningful improvements,” Chang reported.
These three measures directly improve Hollywood Presbyterian’s CMS Star Rating and improve its performance in the CMS Hospital Readmissions Reduction Program.
ADVICE FOR OTHERS
“My advice would be that we are operating during a period of transition from fee-for-service to value-based reimbursement,” Chang said. “As more and more financial risk for the costs of care are shifted to hospital providers, there needs to be increasing attention toward the costs that are incurred not just during the acute hospital encounter, but also the costs of care after discharge.”
This change to value-based reimbursement is inevitable for traditional Medicare – the only decision for hospitals is whether they will adapt to this change before it is forced upon them, he added.
“In order to effectively manage the costs of care after discharge, it is essential for hospitals to have access to the data for where healthcare spending is occurring during the post-acute period,” he said. “This intelligence can help to prioritize and target efforts to the areas where there is the greatest potential for cost savings.”
Further, this information can support performance management efforts to highlight variance between physicians and post-acute facilities, and inform how a hospital should approach selecting the right partners for a narrow post-acute network, and how to best manage the outliers, Chang concluded.