Blog, The Hospital Finance Podcast®

Live from HFMA Region 3 2016 [PODCAST]

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In this episode, Jim Hoffman and Maria Miranda of BESLER Consulting reflect on topics and trends discussed at the Healthcare Financial Management Associations’s Region 3 event.

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Michael Passanante:   Hi, this is Mike Passanante. And welcome back to The Hospital Finance Podcast. Glad you could be with us.

Today, we’re coming to you live from HFMA’s Region III Inaugural Event. And I’m joined by Jim Hoffman, our Chief Operating Officer at BESLER Consulting, as well as Maria Miranda who is our Director of Reimbursement Services.

Hello to both of you.

Jim Hoffman: Hello.

Maria Miranda: Hello.

Mike: Jim and Maria actually just gave a presentation around CJR risks and opportunities. And if you listened to the podcast in the past, you know we’ve covered CJR in various topics and to different extents. And today, Jim and Maria are going to give us a few thoughts from their presentation. They’re going to cover a couple of questions that came from the audience and give you some flavor as to how CJR is beginning to pan out.

So Jim, let me go to you first. You mentioned at the beginning of your presentation that CMS in a way is using CJR to telegraph their intentions around bundled payments. Could you expand on that for us?

Jim: Sure! CMS is really using all the power that they have within a concept of a center for Medicare and Medicaid innovation that came about as part of the Affordable Care Act. And under that concept, CMS has the ability to test new reimbursement mechanisms and quality improvement programs and to determine whether they are successful—and if so, to implement them across a larger group, or across the entire group of Medicare hospitals if it chooses to.

My point was that CMS decided to “test” CJR across 800 hospitals approximately, which is a pretty confident start to a wider bundled payment program. I think it’s born out simply by the fact that about a month ago, at this point, CMS proposed an expanded bundled payment program for cardiac and additional hip and knee surgeries that follows pretty much the same structure as CJR does with a few exceptions.

But it seems clear to me that this is really the future as far as CMS is concerned for how they’re going to start implementing a wider set of bundled payment programs.

Mike: I think that’s probably some sage advice. We’re definitely seeing bundled payments talked about. And lots of different—as you mentioned—micro bundle payment programs being tested as well in different, smaller subsets.

Jim: Right! There are about 20 or so programs right now, various types that are in either testing or implementation. Many, I haven’t even heard of until the CJR final rule came out. They were mentioned in the context of how different claims interact depending on which program they might be a part of.

But I really do think this is the future. I mean even for hospitals that aren’t part of CJR or don’t become part of the newly proposed bundled payment program, it will affect them at some point. They should start paying attention to it now and learning as much as they can about how they might be affected by these going forward.

Mike: Let’s dig into CJR specifically. It’s interesting, hospitals aren’t necessarily financially on the hook in year one, as we know, in terms of either reconciliation payments or maybe on the gain sharing side.

And really, for those hospitals that aren’t necessarily digging into this yet, they have just one notification that’s required, just one thing that they have to do. And what is that that you mentioned in your presentation?

Jim: They have to notify their patients who are CJR-qualified patients that they are part of this program. Technically, they have to let these patients know that the program exists, that it may impact the way they receive certain communications from the hospitals and other providers who they may come across in the course of their treatment for a hip or knee replacement.

But it does let them know that they can’t opt out of the program because CMS decided not to have any impact on the out of pocket expense for hospitals.

I’m going to let Maria talk about a little more about the fact that this would not be our recommendation to take this approach.

Maria: Sure, absolutely. As we know, with CJR, it’s a five year program. And as the region—you’re being compared to the region. And as the region gets better, and as the program progresses, your target price is really going to be more dependent on how the region is doing as opposed to how you’re doing.

So, there are a couple things that we think are really important that you should be doing right now. And one is really just getting acquainted with the data that you’re getting from CMS. CMS is providing data to the hospitals on a quarterly basis. And while the files are really fragmented and not easy to work with, you want to at least know what information is available.

And perhaps there is information from outside—publicly available data—that you can bring in and utilize as well.

We’ve mentioned in the past with CJR that your quality scores are very important, and will impact your discount with CJR. It will impact whether or not you qualify for a reconciliation payment. And all of that data is available out on the hospital compare website.

You can download your information. You can download everyone’s scores basically, and figure out where you are on that spectrum.

So, working with that data, try and figure out where you stand. In other words, what is your risk? It’s probably something that you’d want to do now—better sooner than later. Do you qualify for reconciliation? Or are you going to have to make a payment back to CMS?

The other thing is as the program progresses, even if you’re not at risk right now, do you want to start identifying those collaborators? Do you want to start figuring out who you want to work with, who you want to get involved to help you manage these cases, track these cases as you go through the program itself?

Jim, do you want to touch on some of the collaboration requirements that are necessary?

Jim: Sure. In our presentation today, there was a slide about collaborators that have probably close to 15 bullet points that we used just to show a subset of what the requirements are.

Of course I wouldn’t go through them point by point, but the takeaway is that the process of creating a collaboration agreement, putting that document in place, is going to require an attorney for hospitals. It’s probably going to take a long time to get it right.

This is something brand new that hospitals have to deal with that they haven’t dealt with before. And so we would recommend that if you are in the CJR program, and you’re thinking about putting in place these arrangements for the second year that starts on January 1st, that you should be well under way at this point hopefully, and just be ready for the amount of time and effort that it’s going to take to put in this place. And that already assumes that you’ve identified who the most appropriate providers would be to collaborate with.

Maria: And it’s not just identifying the collaborations. If you’re dealing with more than one type of provider, just thinking about what type of agreements you want to have in place. How much part of the pie are you willing to share? And what are you going to make part of that collaborater agreement.

It’s going to take a lot of thought before you even get to that point.

Jim:  Right. There’s no requirement from CMS that you use the same collaboration agreement with different providers and different types of providers. So, it would be very unlikely that you’d have a standard template that you’d be able to use multiple times.

And in fact, physician practices that CMS fully expects will be a big part of the collaboration requirement to be successful at CJR. They have their own set of requirements above and beyond what other types of providers have.

So, it’s not going to be a one-size-fits-all kind of a thing. And again, this is brand new, so everybody has to spend some time figuring it out.

Mike: Well, one of the areas I wanted to touch on with you—I’ll go to you first, Maria—is the lag in the data. We had a question at the end of the presentation because we’ve talked offline about how important it is to understand the data, right? You can’t really analyze and begin to solve this problem until you’ve looked at the data. And the data isn’t necessarily easy to work with.

But one of the things that’s endemic with data is it’s got a lag. And one of the questions that came in from the audience is, “How do we manage that? Our hospital has been doing well for the first couple of quarters”—and I think they were BPCI hospital—“And now we get another quarter worth of data, and we’re not doing so well.”

How do we begin to really understand that and deal with that in a more real time way?

Maria: Sure. And I think that it goes back to whether or not you decide to collaborate with other providers. If you want real time data, you really only have access to your own information at the moment until CMS gives you the data that includes all the other providers.

If you’re looking at real time, and you’re pulling your own information, you only have the acute side. And we know that more than 50% of the total expense of the procedure is post-acute.

So, if you’re collaborating—and you can put terms into your contract—in terms of how you share data, what type of data, so that you’re getting that real time, and so that you’re actually managing those patients while they’re still in the hospital, not after the fact.

Mike:  Excellent! There’s so much more to know and learn about the CJR program. We have many resources on our website. So I invite you to continue the conversation with us up there.

Certainly feel free to drop us a line on our website if you have any questions. If you want to understand more about the position of your hospital as it relates to the CJR program or interested in future planning.

Jim and Maria, thanks so much for spending some time with us today and for your talk this afternoon.

Jim: Thank you very much.

Maria: Thank you.



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