Bundle Payments Healthcare Systems & Services Presenters: Larry Litman, Tyler Litman
To determine the average cost of the SNF portion of a bundle through the analysis of our client data-base. Our Objective:
BPCI Bundled Payment for Care Improvement Initiative January 31, 2013 CMS selected organizations to participate Goal of BPCI Organizations will enter into payment arrangements that include financial and performance accountability for episodes of care. These models may lead to higher quality, more coordinated care at a lower cost to Medicare. CMS.Gov Four Models exist, 2 of which affect Skilled Nursing Facilities Model 2 Episode begins at admission to hospital Model 3 Episode begins at admission to SNF Bundle - Risk History
BPCI Three year demonstration Program Completely Voluntary Terms are created and agreed upon by provider Number of episodes and which ones Target price of Bundle Number of days in the episode Payments continue as FFS Medicare Settling up after episode No plan to expand the demonstration nationally or make mandatory BCPI
Arizona Participants Episode Begins at Admission to Hospital and Banner Del Webb 1 can end either 30, 60, 90 days after hospital Banner Desert Medical 1 Banner Good Sam 1 discharge. Participants can select up to 48 Mountain Vista 1 different clinical conditions. Dignity Health St. Josephs 46 Dignity Health Mercy Gilbert 48 - Share a bundle with PAC Dignity Health Chandler 48 Scottsdale Cardiovascular 48 Desert Institute for Spine Care 48 Northwest Cardiology 48 Heart & Vascular Center of AZ 48 Anthony T Yeung MD 48 Orthopedic Specialists 15 The Orthopedic Clinic Association, P.C. 15 Tucson Orthopaedic Institute, Pc 15 Banner Estrella Medical Center 1 Banner Heart Hospital 1 Banner Thunderbird Medical Center 2 St. Luke's Medical Center 1 Mountain Vista Medical Center 1 Model 2 SNF s may be asked to participate
Episode Begins at Admission to First PAC Provider and must begin within 30 days of discharge from the inpatient stay and will end either 30, 60, or 90 days after the initiation of the episode. Participants can select up to 48 different clinical conditions. Arizona Participants Amedisys Home Health 48 Anthony T Yeung MD PC 48 Chris Ridge Premier 48 Desert Institute For Spine Care 48 Estrella Care And Rehabilitation 48 Good Sam Prescott Valley 8 Good Sam Prescott Village 8 Heart & Vascular Ctr of AZ 48 - OWN Bundle Model 3 SNF s Control the Bundle
Major joint upper extremity Amputation Urinary tract infection Stroke Chronic obstructive pulmonary disease, bronchitis/asthmae Coronary artery bypass graft surgery Major joint replacement of the lower extremity Percutaneous coronary intervention Pacemaker Cardiac defibrillator Pacemaker Device replacement or revision Automatic implantable cardiac defibrillator generator or lead Congestive heart failure Acute myocardial infarction Cardiac arrhythmia Cardiac valve Other vascular surgery Major cardiovascular procedure Gastrointestinal hemorrhage Major bowel Fractures femur and hip/pelvis Medical non-infectious orthopedic Double joint replacement of the lower extremity Revision of the hip or knee Spinal fusion (non-cervical) Hip and femur procedures except major joint Cervical spinal fusion Other knee procedures Complex non-cervical spinal fusion Combined anterior posterior spinal fusion Back and neck except spinal fusion Lower extremity and humerus procedure except hip, foot, femur Removal of orthopedic devices Sepsis Diabetes Simple pneumonia and respiratory infections Other respiratory Chest pain Medical peripheral vascular disorders Atherosclerosis Gastrointestinal obstruction Syncope and collapse Renal failure Nutritional and metabolic disorders Cellulitis Red blood cell disorders Transient ischemia Esophagitis, gastroenteritis and other digestive disorders Clinical Conditions ( 48 Bundles)
Each Bundle Relates to certain DRG s Amputation: 239 Amputation for circulatory system disorder except upper limb and toe with major complication or comorbidity 240 Amputation for circulatory system disorder except upper limb and toe with complication or comorbidity 241 Amputation for circulatory system disorder except upper limb and toe without complication or comorbidity or major complication or comorbidity 255 Upper limb and toe amputation for circulatory system disorder with major complication or comorbidity 256 Upper limb and toe amputation for circulatory system disorder with complication or comorbidity 257 Upper limb and toe amputation for circulatory system disorder without complication or comorbidity or major complication or comorbidity 474 Amputation for musculoskeletal system and connective tissue disease with major complication or comorbidity 475 Amputation for musculoskeletal system and connective tissue disease with complication or comorbidity 476 Amputation for musculoskeletal system and connective tissue disease without complication or comorbidity or major complication or comorbidity 616 Amputation of lower limb for endocrine,nutritional,and metabolic disease with major complication or comorbidity 617 Amputation of lower limb for endocrine,nutritional,and metabolic disease withcomplication or comorbidity 618 Amputation of lower limb for endocrine,nutritional,and metabolic disease without complication or comorbidity or major complication or comorbidity DRG (Diagnostic Related Groups) Approximately 500
ICD 9 DRG Procedure coding used by SNF to identify patient episode of care. Approximately 13,000 codes. Hospital system to classify cases into one of approximately 500 groups. ICD 10 Procedure coding used by SNF to identify patient episode of care. Approximately 68,000 codes. DRG / ICD 9 / ICD 10
Medical Records lists the ICD codes in sequential order of importance. In most cases in a SNF this means a V Code, therapy as the admitting diagnosis. The primary reason a patient is being admitted. Inconsistent ICD coding in SNF AHCA Medical Records Consultant As for the diagnosis; if the facility is using proper coding procedure the Rehab code V57.89 would be the first listed diagnosis as this is the reason the resident is receiving skilled services in the SNF setting (most of the time at least). The primary medical should always be listed second and then the therapy treatment codes. The primary medical should be the same as the hospital diagnosis; Creating the link DRG to ICD
There is currently no way to link the DRG Coding in the Hospital to the ICD Coding in the SNF. A project is underway to develop the link from ICD 10 s with the DRG s in a Hospital Broken Link
Hospital Patient Admitted to Acute Setting for hip replacement, then moved to a SNF for rehabilitation. Patient scores DRG of 470 After care following joint replacement SNF Agrees to Hospital Rate Hospital provides the SNF DRG 470 so Bundle can be determined. ICD is v54.81 (link) SNF cannot readily determine DRG without Hospital involvement at this time. Patient falls within averages and receives what is needed Model 2
Hospital Admits patient for hip replacement surgery Patient has diabetes Patient has kidney infection SNF SNF agrees to rate Patient has multiple costly medications Patient has costly tests Rate is not enough to cover cost SNF begins to cherry pick patients More likely
SNF accepts patient with agreed upon bundle SNF Manages patient costs internally and discharges home Home Health begins service on patient Patient becomes sick and goes back to the Hospital SNF assumes risk and ALL these costs affect their bundle Model 3 Assume 60 Day Episode
We are dealing with people with multiple variables Difficult to find enough episodes in one bundle to make a complete analysis. Creating a National program with so many variables and no ability to limit risk is not conducive to a successful financial outcome Averages are very misleading without large populations and risk mitigations for high cost outliers. Small Populations
Track cost and reimbursement of all patients in our data. Track ancillary cost Track admitting diagnosis Track primary diagnosis Then added: Looking at each patients medical record ICD s to find the clinical reason to tie patient to Bundle We found ourselves guessing and realized that we cannot find the link Realized that one question led to another and we were not able to achieve what we set out to do with the current CMS model We cursed a lot! Our Data Approach
Confirmation that the link is very difficult if as the program is currently written. Difficult to create bundle costs CMS seems to recognize the problems Many other with BPCI issues outside of what we intended to discuss No outlier payments High Risk No way to establish national rates Model 3 with high reliance on Acute Cherry Picking to limit loss Contacted National AHCA For Help!
AHCA White Paper Focus on 4 broad episodes to cover 60% of all SNF patients Easily Identified upon Admission to SNF Use of averages but with outliers to limit loss, avoid cherry picking Establish a price on historic national mean Morgan Group Came up with the following averages including the cost of those patients readmitted to acute from SNF, or SNF Home Health etc * Orthopedic surgery lower $21,675 Major organ failure $24,504 RT Condition $23,226 Sept and Infect $25,502 What do we do now?
SNF results only using AHCA Approach
Major Organ Failure Major Organ Failure Frequency Mean 6,610.82 Standard Deviation 3,120.37 Range 11,652.50 Minimum 1,752.17 Maximum 13,404.67 Average LOS 18.17 Average Cost PPD 363.83 Min Cost PPD 96.43 Max Cost PPD 737.74 Range 641.30 1,752 4,665 7,578 10,492 More Dollars
Septicemia and Other Infections Septicemia and Other Infections Frequency Mean 7,912.89 Standard Deviation 3,411.64 Range 13,699.67 Minimum 2,682.16 Maximum 16,381.83 Average LOS 19.26 Average Cost PPD 410.85 Min Cost PPD 139.26 Max Cost PPD 850.56 Range 711.30 2,682 6,107 9,532 12,957 More Dollars
Orthopedic Surgery Lower Extremity Orthopedic Surgery Lower Extremity Frequency Mean 7,910.55 Standard Deviation 5,428.84 Range 22,886.75 Minimum 413.56 Maximum 23,300.31 Average LOS 21.80 Average Cost PPD 362.87 Min Cost PPD 18.97 Max Cost PPD 1,068.82 Range 1,049.85 414 4,991 9,568 14,146 18,723 More Dollars
Respiratory Conditions Respiratory Conditions Frequency Mean 7,034.34 Standard Deviation 4,923.69 Range 21,144.74 Minimum 432.86 Maximum 21,577.60 Average LOS 18.02 Average Cost PPD 390.36 Min Cost PPD 24.02 Max Cost PPD 1,197.43 Range 1,173.40 433 4,662 8,891 13,120 17,349 More Dollars
MODEL 2 SNF is only responsible for care in SNF May be useful with Model 2 If Outliers can be identified If Risk can be mitigated MODEL 3 SNF on the hook for care after discharge Shared Risk Relationships Possible ownership of other PAC Risk must be limited Our Data Usefulness
LOS Changes Service Reduction and Better Outcome Beth Israel Hospital Even more focus on Ancillary Cost Control Possible Cherry Picking Gain sharing or ownership of other PAC Limit exposure % of Stay PAC SNF 52% HH 15% IRF.2% LTCH.3% CMNTY 32% Possible Impact to SNF
Congress may pass it because it is an easy concept to understand. One payment covers all. They just don t understand the intricacies and the inability to link between provider types If it does pass AHCA believes they will have a larger role in establishing this program that will work for the SNF Will this demonstration be made a reality?
Understand your internal costs Know you risk factors Don t enter into a relationship on the possibility of losing market share If this Bundle Payment becomes a reality, we need to be prepared At the moment the cost variations in these bundles are dramatic Stay tuned Summary