PSH Webinar: Developing a Perioperative Surgical Home Program

VHA Southeast, Inc. Confidential information.
July 23, 2015
Mike Schweitzer, MD, MBA
VP Healthcare Delivery System Transformation
Implementation of a Perioperative
Surgical Home (PSH)
OrthoService Line Webinar

1. Explore Comprehensive Care for Joint Replacement (CCJR) and
Medicare Access and CHIP Reauthorization Act (MACRA)
2. How to begin developing a PSH program at your organization
3. Engage Physician Leaders to prepare for MACRA MIPS or Value
Based Payments through PSH
Educational Goals
3 |

VHA Southeast is a member owned cooperative comprised
of not-for-profit healthcare organizations in Alabama, Florida,
Georgia, and the U.S. Virgin Islands. VHASE serves 23
members (75 hospitals and affiliated medical staffs).
Who is VHA Southeast?
4 |
Mission —To accelerate our members’ improvement of clinical
and economic performance and transformation in the healthcare
industry.

Polling Question #1: What do you think of the
Perioperative Surgical Home (PSH) Model?
Please Select:
I don’t know what PSH is.
I am skeptical PSH will work.
I Want to learn more.
I will explore PSH development in my organization
over next 3-6 months.
I already have PSH or similar model in my
organization.

• Pre-op evaluations/care often not effective
• 1 in 7 Surgery Patients readmitted within 30 days nationwide (NEJM online
September 2013)
• Hopkins Frailty Score predictive of a patient experiencing a
postoperative complication (J AM Coll Surg. 2013; 217(4):665-670)
Perioperative Care – Current State
6 |

CMS announces proposed rule for Comprehensive
Care for Joint Replacement (CCJR) bundled payment
model for a 5 year performance period, beginning
January 1, 2016 and ending December 31, 2020.
Requires the participation of hospitals within 75
geographical MSAs that have not voluntarily
participated in BPCI for Total Joints as of July 1, 2015.
Hospitals will bear full financial risk (MS-DRG
469/470) for the episode of care including procedure,
inpatient stay and all related care under Part A & B
within the 90 days including post-acute care and
physician service.
The policies discussed in this presentation are
proposals subject to the notice and comment
rulemaking process.
CMS Further Accelerates Adoption of Alternative
Payment Models with Announcement of CCJR

CCJR Collaborator means one of the following:
• SNF
• Home Health
• LTAC
• Inpatient Rehab Facility
Gainsharing payments, if distributed, must be distributed on an
annual basis
Alignment payments from a CCJR Collaborator to a participant
hospital may be made at any interval that is agreed upon by the
parties
“Notwithstanding any CCJR sharing arrangements between the
participant hospital and CCJR collaborators, the participant hospital
must have ultimate responsibility for adhering to and otherwise fully
complying with all provisions of the CCJR model.”
CCJR Aimed to Drive Collaboration
19
• Physician
• Non-physician practitioner
• Outpatient Therapy provider
• Physician Group Practice

Participant hospitals may assign various
percentages of two-sided risk to collaborators.
 Where that is the case, CMS would continue to make
reconciliation payments and recoupments solely with the
hospital
 The hospital would be responsible for paying/recouping
from its collaborators according to the agreements
between those entities
CMS proposes to limit the hospital’s sharing of
risk to 50% of the total repayment amount to CMS
 The hospital would be required to retain 50% of the
downside risk
 The hospital could not share more than 25% of its
repayment responsibility with any one provider or
supplier.
Financial Arrangements: Risk sharing
8 |

• HHS Secretary Burwell announced in January
that 30% of payments from traditional
Medicare benefits will be tied to alternative
payment models such as bundled payments,
ACOs, medical or specialty homes by end of
2016.
• 50% of Payments will shift from FFS to Value-
base payments by end of 2018.
• Secretary Burwell also outlined a goal for 85%
of all Medicare fee-for-service payments to
be tied to quality or value payment incentives
by 2016, and 90% by 2018.
Value-Based Payment (VBP) Acceleration of Timeline
6 9 |

The Health Care Transformation Task Force, whose members
include six of the nation’s top 15 health systems and four of the top
25 health insurers, challenged other providers and payers to join its
commitment to put 75 percent of their business into value-based
arrangements that focus on the Triple Aim of better health, better
care and lower costs by 2020. (www.hcttf.org)
Aetna will rapidly expand beyond its current 30% VBP
United Health Group will increase VBP arrangements to $65 billion by
the end of 2018
Anthem which operates Blue Cross plans in 14 states, recently stated
its value-based contracts are currently worth $38 billion
Cigna affiliated with over 100 ACOs and also many Bundled Payments
Value-Based Payment (VBP) Acceleration of Timeline
http://www.forbes.com/sites/brucejapsen/2015/02/04/aetna-cant-escape-fee-for-service-medicine-fast-enough/
7 10 |

Good Bye SGR….
Providers must choose Pay for Performance or APM options:
Pay for Performance: Merit-Based Incentive Payment System (MIPS)
combines the current pay-for-performance programs into a single payment
system - three prior incentive programs, the Physician Quality Reporting
System (PQRS), the Value Modifier (VM), and Meaningful Use (MU)
programs
Alternative Payment Model: Requires significant share of provider revenue
in APM with two-sided risk and quality measures
Medicare Access and CHIP Reauthorization Act (MACRA)
replaces SGR with a new performance-based payment
system and financial incentives for participation in
alternative payment models.
9

Good Bye SGR…What is Coming in It’s Place?
10
April 1, 2015 July 1, 2015 2016 2017 2018 2019 2020
Track 1:
MIPS
(Default)
Track 2:
APMs
Sunsets penalties for
MU, PQRS, and VBM
Measurement Period
Starts in 2017
0.0% 0.5%
0.5% Increase
Annually

Considers achievement and improvement.
Poor Performers subject to payment reductions while good performers can qualify
for payment increases. Initial “Threshold” will be determined based by Secretary of
HHS using prior period composite scores.
Incentive payments must generally be budget neutral, thus a scaling factor of at
most 3x may apply resulting in up to 27% payment increase.
The Elements of MIPS
13 |
4 Performance Categories:
Quality and Resource Use
must make up 60% of score
(CY 2019, 2020, 2021, and beyond)
Resource
Use
30%
Clinical
Practice
Improvement
Activities
Meaningful
Use of EHR
25%
Quality
30%
15%
PQRS & QCDR Measures
Cost
Measures &
Patient
Attribution
Care
Coordination,
Patient
Satisfaction,
Access
Measures
Meaningful Use
Measures

MIPS System has Bigger Penalties
14
Courtesy Dr. Stan Stead

Risk-based contracts with Medicare Advantage plans count toward the all-payer requirement category
5% incentive payment to participate in APMs
To achieve full bonus, physicians must earn 25% of their Medicare income in 2019 from APMs
and meet, yet to be defined, quality metrics.
Elements of APMs
15

• BUT physicians and others are eligible for incentive payments under
a new Merit-Based Incentive Payment System (MIPS), and poor
performers incur payment reductions.
• Health professionals participating in certain alternative payment
models (APMs) are NOT subject to MIPS and could qualify for bonus
payments.  Think PSH
• After 2025, there would be TWO conversion factors and the annual
updates would be 0.75% for qualifying APM participants and 0.25%
for others.
Key SGR reform-related provisions of Medicare Access
and CHIP Reauthorization Act (MACRA)
16 |
• An annual 0.5% update factor applies for July
through December 2015 and for 2016 through 2019.
• The physician fee schedule conversion factor is then
frozen for the next 6 years (2020 through 2025).

MIPS:
• Currently only 1% of eligible physicians received bonus in VBP in 2014
http://www.bakerhealthlawupdate.com/2015/04/five-things-to-know-about-the-medicare-sgr-fix/
• Total Penalty is up to 11% or Bonus of up to 27%
• Metrics and Qualification thresholds yet to be determined
• After 2026 increase in conversion factors is only 0.25%
APMs:
• 5% annual bonus
• Metrics and Qualification thresholds yet to be determined
• After 2026 increase in conversion factors is 0.75%
MIPS or APM?
17 |
Track 1:
MIPS
(Default)
Track 2:
APMs

Catch the Wave by January 1, 2017
The “Party Wave”
18 |

Economic Accountability is Compelling Action
Historical distinction between payors and providers is
becoming increasingly blurred.
Payors Providers
Penalties for
readmissions
Value-based
purchasing
Bundled payments
or PSH
Development
of ACOs
Better
manage
sickest
patients
19 |

How can health care organizations adopt and implement
Alternative Payment Models such as Co-management,
PSH, CIN, or ACO?
• It Requires Physicians Learning New Skills and Tools:
 Project Management
 Change Management
 Team Leadership
Physician Champions Must Learn to Lead
John Kotter: “Our Iceberg is
Melting”
20 |

Hospital Value-Based Purchasing (VBP) Domains
1.00% 1.25% 1.50% 1.75% 2.00%
Percent of Medicare Reimbursement at Risk
21 |

$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
4 3 17 2 76 81 213 24 65 388 256 83 145 136 342 66 131 72 166 213 91 288 280 195 289 235 206 245 241 26 783 357 108 71 336 126 236 184 3
IC6 CA3 IC3 AA5 RA1 IC2 IC1 FC1 IC5 IA1 ZA1 AA3 YA2 XA1 QA2 BC1 AA4 GA3 PA1 CA1 GA2MA1FA1 AC1 GA1 BA1 EC1 NA1 EA1 CC1 KA1 UA1AA2 KA2 YA1 GA4NA2 BA2 NA3
HCO, Cases
Average of Price-Standardized Episode Payments
Hospice Pmts
HHA Pmts
DME Pmts
SNF Pmts
Phys Pmts
OP Pmts
IP Pmts
Major joint replacement, lower extremity
Data Source: Member-submitted MSPB Hospital-Specific Data Files
Inpatient Discharges 1/1/13-12/31/13

HCO ‘x’ Average Price-Standardized Episode Payment
Variance from VHASE by Claim Type
Major joint replacement, lower extremity
Data Source: Member-submitted MSPB Hospital-Specific Data Files
Inpatient Discharges 1/1/13-12/31/13
23 |
($500) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000
Inpatient
Outpatient
Physician
Skilled Nursing
DME
Home Health
Hospice
Total
Average Medicare Payment Variance

Creates a strong focus on quality and
clinical outcomes. Access to
sophisticated IT systems.
Legal basis to contract as single
entity with multiple health plans.
Opportunity to access better
compensation for achievement of
quality and efficiency goals.
Closer alignment with Hospital.
Creation of brand name identity in
marketplace.
Importance of PSH to the Physicians
24 |

Creates long term business
relationship with all participating
physicians.
Encourages physicians to focus
on shared objectives regarding
quality, cost and patient safety.
Strengthens physician
integration.
Positions hospital for APM or CIN
initiatives.
Importance of PSH to the Hospital
25 |

The measurement and
transparency of performance and
results.
Stable and consistent network of
providers.
Demonstration of efficiencies.
Focus on quality and clinical
outcomes.
Forum for working with providers
to generate improvement in care.
Importance of PSH to the Payer Community
26 |

LEGEND: HDST = Healthcare Delivery System Transformation, DSP = Delivery System Performance, CCCM = Care Coordination & Cost Management, MSPB =
Medicare Spend Per Beneficiary, APMs = Alternative Payment Models, APAT = Academy for Physician Advancement and Transformation
Alternative Payment Model Infrastructure
Core
Competencies
Required
Capabilities
Capabilities Description
VHA Southeast
Services
Episode
Management
Governance and
Infra-Structure
Develop infrastructure required for physician and
payer partnerships. Transform culture with both
formal committees & physician champions. (Legal &
FMV help required)
HDST: Physician Advisory
Council Development,
Governance & Management
Structures
Episode
Re-engineering
Define and re-engineer bundled definition and
process including service inclusions and exclusions,
payments, and optimizing strategies
• HDST: APMs
• DSP: CCCM w/ MSPB
Cost Management
Identify and implement total cost of care reduction in
safe and appropriate manner.
• HDST: APMs
• DSP: CCCM w/ MSPB
• Rev. & Cost Man.:
Supply Chain Services
• VHASE IBI Portal
Targeted Analytics &
Technology
Understand current state and measure, monitor &
evaluate future performance (internal trends/external
benchmarks) across continuum.
VHASE IBI Portal
Across
Continuum
Clinical Care
Delivery
Continuum of Care
Management
Assess & re-engineer care across the episode
continuum & execute continuous process
improvement.
DSP: CCCM w/MSPB, Care
Continuum Management
Model
Post-Acute Network
Identify optimal PAC partners, manage utilization
appropriately & partner to improve transitions of care
across the continuum.
HDST: Strategy Services,
Network & Strategy
Management
Provider
Engagement
Provider Alignment
Develop culture of transparency & collaboration with
physicians & key providers. Grow the network of
participating providers and use gainsharing
methodologies.
HDST: APAT, Physician-
Hospital Integration, APMs

Bundled Payment Care Initiative (BPCI) Participants
2014-2015

BPCI vs CCJR
3 |
Program Structure BPCI CCJR
Participation
Voluntary – Only entities that
have elected to participate
Mandatory – Entities that have not
chosen to voluntarily participate
Episode Initiators
Acute Care hospitals or Physician
Group Practices
Acute Care Hospitals Only
Program Term
3 years – July 2015
(Model 2 &3)
5 years – Jan 2016
Target Price Cost
Efficiencies
Reconciliation payment if below
target price
Reconciliation payment if below
target price and meet all 3 quality
measures
Target Price
Calculation Basis
3 year historical hospital spend by
CMS
Blended 3 year historical hospital
CMS with increasing % based on
regional pricing
CMS Reconciliation
Frequency
Quarterly Annually
High Episode Risk
Adjustment
1/99th percentile
5/95th percentile
5/75th percentile
Actual episode payments capped at
2 standard deviations above regional
mean episode payments

Perioperative Surgical Home (PSH)
The PSH model is a patient-centered, physician-led interdisciplinary,
and team-based system of coordinated care for the procedural and
surgical patient.
PSH spans the entire surgical experience from decision for the need for
surgery to 30-90 days post discharge from a medical facility.
PSH aim is to reduce variability in the perioperative care process.
The goal of the PSH is to enhance value and help achieve the Triple Aim:
What is a Perioperative Surgical Home? AAOS June 2014
http://www.aaos.org/news/aaosnow/jun14/advocacy7.asp
Better Patient Experience
Lower CostsBetter Healthcare
Perioperative Surgical Home

PSH Overview Stakeholders

Post-
Discharge
Phase
Preoperative
Phase
Operative
Phase
Postoperative
Phase
There will very likely be
multiple future variations
of the surgical home concept
that may work effectively,
depending on institutional
infrastructure, [priorities] and
yet to be identified external
forces..”
An Analysis of Methodologies that Can be Used to Validate if a
Perioperative Surgical Home Improves the Patient-Centeredness,
Evidence-Based Practice, Quality, Safety, and Value of Patient Care.
Vetter TR, Ivankova NV, Goeddel LA, McGwin G Jr, Pittet JF.
Anesthesiology. 2013 Dec;119(6):1261-74.
PSH Can be Built in Modules

Perioperative Care Clinic (PCC)
Pre-op Clinics can expand to Post-Discharge Transitional Care
Clinics
Using Project RED, Project Boost, and/or LACE Tool
Preoperative
• Patient engagement
• Assessment & triage
• Optimization
• Evidence based
protocols
• Education
• Transitional care plan
Long Term Recovery
• Coordination of
discharge plans
• Education of patients
and caregivers
• Transition to appropriate
level of care
• Rehabilitation and return
to function
• Reduced variation
PCC

34
Variation in Post Acute Care (PAC) Cost
Source: AHA Issue Brief ‘Moving Towards Bundled Payment’ Jan 2013
The source of the cost variation for each condition will
help identify where efforts should be targeted.

PAC Spend as Percent of Total Cost of Care
Source: Dobson DaVanzo Medicare Payment Bundling: Insights from Claims Data and Policy
Implications,at http://www.aha.org/research/reports/12bundling.shtml
40.0% 42.0% 44.0% 46.0% 48.0% 50.0% 52.0% 54.0% 56.0%
30 Day
60 Day
90 Day
46.0%
51.2%
54.5%
Fixed-length Episode Following Discharge From Index Hospital Admission
%ofMedicareFee-for-serviceExpenditures

CEO
CFO
CMO
Physician champions
PI department
Polling Question #2 – Who are first three stakeholders you
would contact to start your APM? (multiple answer)
36 |

VHA Southeast, Inc. Confidential information.37
PSH Learning Collaborative Members

The Patient Journey
Navigating the Episode of Care
Comprehensive Journey Map of all the patient-provider actions
along the entire continuum of care
Identify all the areas where non-adherence or deviation from plan
or decision points can be challenging or a source of risk
Courtesy Wellbe
38

Become Increasingly Analytic
Guided
CarePath™
CareGuide™
Collecting ‘real-time’ patient-generated
data during the episode of care
Claims
Data
Clinical
Data
Patient-generated
Data
Courtesy Wellbe
39

Kaiser Baldwin Park, CA TKA over two years
• Reduced LOS (1.9±0.6 days)
• POD#1 discharge (43%)
• 94% SNF bypass rate
• Potential savings > $1 million in 1 year
St. Francis Community Hospital Roslyn, NY Total Joints in first 3 Q
• Complications decreased from 4.2% to 1.7%
• Blood transfusions decreased from 10.4% to 4.8%
• Patient Satisfaction with Physician increased from 77 to 86%
• Readmissions within 30 days decreased from 7.4% to 1.8%
PSH Outcomes Examples PSH Summit June 2015
40 |

Be an Indispensable Partner for Change
Physician Champions
Leading Change
41 |

VHA Southeast, Inc. Confidential information.42 |
Top Lessons Learned in PSH
Use quality as the “Change Agent”
Identify physician champions
Better collaboration among health care providers
Understand your costs
Be transparent
Choose Bundle - High Volume with High Variability
Information systems barriers
Use data to drive the process
Shift towards evidence-based practice
Labor-intensive to administer program
Improve the organization and coordination of care

CCJR
MACRA
BPCI
PSH
Still Clueless!
Polling Question #3 – Please select the models where you
feel you have increased understanding (multiple answer):
43 |

 Create a sense of urgency — “The Burning Platform”
 Ownership and commitment to new expectations — patient-
centered, value-based, high quality, and cost-effective care
 Creating the infrastructure to support Value Based Payments
 Cultural transformation — Coordinated Care
 If you are not involved, you do not share in the benefits
PSH Steps Forward
44 |





THANK YOU !

Contact Dr. Mike Schweitzer, Vice President of
Healthcare Delivery System Transformation at
mschweitzer@vhasoutheast.com for more information.
Visit us online at www.vhasoutheast.com
45 |

46
Streamlining Orthopedic Episodes of Care
www.wellbe.me

47
Upcoming Live Event
Musculoskeletal Leadership Summit
Sept 10-11, 2015 – Las Vegas, NV
http://www.orthoserviceline.com/summit
Speakers include:
• Jane Keller, CEO of OrthoIndy
• Bill Munley, VP of Professional Services and Orthopedics at Bon Secours St. Francis Health System
• Maureen Geary, Program Director for the Connecticut Joint Replacement Institute
• Dr. Corey Lieber, Orthopedic Surgeon at Newport Orthopedic Institute/Hoag Hospital
• Kimberly Meyers, Executive Director of Neurosciences and Spine at University of Colorado Hospital
• Kevin Cullinan, Executive Director, Orthopedics at Catholic Healthcare Initiatives St. Vincent’s – Little Rock
• …and more!

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PSH Webinar: Developing a Perioperative Surgical Home Program