Case management’s role in the new proposed bundled payment program
April 1, 2016
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By Toni Cesta, PhD, RN, FAAN
As we have discussed in prior editions of Case Management Insider, the 2010 Affordable Care Act (ACA) was a game changer for the healthcare system. The payment reforms it introduced began the process of requiring health systems to communicate across the continuum of care and to reduce and/or eliminate existing silos. This across-the-continuum integration required sharing of accountability for cost and quality of care among providers.
On July 9, 2015, as one of several follow-ups to the ACA, the Centers for Medicare & Medicaid Services (CMS) announced a new program that would mandate a 90-day bundled payment model for patients undergoing lower extremity joint replacement. The program is based on the Comprehensive Care for Joint Replacement (CCJR) initiative that began in 2011 and the Acute Care Episode (ACE) demonstration project that ran from 2008 through 2010. The program’s goals are to improve cost efficiencies, patient outcomes, and enhance collaboration among providers for an episode of care. These goals are not foreign to case managers as they have been part of our lexicon for decades. The biggest change in this program is that the bundle will require the entire acute care team to think beyond the walls of the hospital in ways that have been quite limited up until now.
THE BPCI PROGRAM
Titled the Bundled Payments for Care Improvement initiative (BPCI), this program introduced four payment models. It was CMS’ first attempt at understanding how bundled payments might work and was initiated as a voluntary program. Hospitals volunteering to participate could choose one of four payment models, each with different levels of financial risk. The following are the four payment models:
Model 1: Retrospective Acute Care Hospital Stay Only
- Episode of care defined as acute hospital inpatient.
- Medicare paid hospital a discounted amount based on payment rates established under the Inpatient Prospective Payment System (IPPS) in the original Medicare program.
- Medicare continued to pay physicians separately for services under Medicare Physician Fee Schedule.
- Under certain circumstances, hospitals and physicians were permitted to share gains arising from providers’ care redesign efforts.
- Participation extended no later than January 2014 and included most Medicare fee-for-service discharges for the participating hospitals.
Model 2: Retrospective Acute Care Hospital Stay Plus Post-Acute Care
- Episode of care included hospital inpatient stay and all related services during the episode.
- Episode ended 30, 60, or 90 days after hospital discharge.
- Participants selected up to 48 different clinical condition episodes.
Model 3: Retrospective Post-Acute Care Only
- Episode of care was triggered by an acute care hospital stay.
- Began with initiation of post-acute care services with participating skilled nursing facility (SNF), inpatient rehabilitation facility, long-term care hospital or home health agency.
- Post-acute care services included in the episode had to begin within 30 days of discharge from the inpatient stay and ended with a minimum of 30, 60, or 90 days after initiation of episode.
- Participants could select up to 48 different clinical condition episodes.
Model 4: Acute Care Hospital Stay Only
- Encompassed all services furnished during the inpatient stay by the hospital, physicians, and other practitioners.
- Physicians and other practitioners submit “no-pay” claims to Medicare are paid by the hospital out of bundled payment.
- Related readmissions for 30 days after hospital discharge included in bundled payment amount.
- Participants selected up to 48 different clinical condition episodes.
THE COMPREHENSIVE CARE FOR JOINT REPLACEMENT (CCJR) MODEL
Each of the BPCI models was tested in order to determine which might be the better arrangement for providers as well as CMS. However, CMS did not wait until the results were in and released the new rules for the bundled payment program on July 9, 2015. The CCJR was proposed to be mandatory for 75 geographic metropolitan service areas. It included approximately 800 hospitals in the 75 geographic areas with some exclusions, including hospitals with low volume for these procedures. In its final rules, CMS reduced the number of geographic areas to 67, excluding eight areas with low volume. Excluded hospitals include non-IPPS hospitals (critical access and Maryland hospitals), and hospitals actively participating in BPCI. Colorado Springs, Richmond, VA and Las Vegas are also excluded. Those participating in models 1 and 3 went active as of July 1, 2015. Those in models 2 and 4 went into risk-bearing phase as of July 1, 2015.
THE ELEMENTS OF THE MANDATORY BUNDLED PAYMENTS
The program applies to traditional Medicare patients only. An “episode” begins with admission to the hospital for surgery and ends 90 days later. Patients must be enrolled in Medicare Part A and Part B throughout the duration of the episode and Medicare must be the primary payer.
Certain patients are also excluded from the program. If the patient is on Medicare due to end-stage renal disease (ESRD) or if they are in a Medicare Advantage Plan, they are excluded. Patients are also excluded if they are covered under a United Mine Workers of America health plan.
The payment timeline is as follows:
There is a five-year testing period from January 1, 2016 to December 31, 2021. The only applicable DRGs are 469 and 470. The episode starts with admission to the hospital and ends 90 days after discharge.
Once the episode begins, it continues until the patient no longer meets inclusion criteria, and then it is cancelled. For example, the patient is readmitted to the hospital after a discharge from one of the eligible DRGs, MS-DRG 469 or 470. The readmission cancels the episode and a new one begins.
Another example would be death during the initial hospitalization. The anchoring hospitalization is the one that triggered the procedure. It is also known as the index hospitalization for the readmission program. Charges incurred for up to three days prior to the hospitalization are still included in the DRG charges only for services performed by the hospital or an entity wholly owned and operated by the hospital where the anchoring hospitalization occurred.
Payments are retrospective each year and are based on claims submitted by March 1, following the end of a performance year. Retrospective calculation of the hospital’s actual performance compared to the target price results in the raw net payment reconciliation amount (NPRA).The target price is calculated based on three years of historical Medicare payment data grouped into episodes of care. The data are updated every other performance year.
Major joint replacement or reattachment of lower extremity (DRG 470) currently ranks No. 1 in Medicare patient discharges. It replaced health failure and shock several years ago, which ranked No. 1 for at least 20 years. For this DRG, the greatest number of resources is consumed during the hospital portion of the episode. The next greatest amount of resources is consumed during the post-acute period and the least amount applies to the physician and other outpatient services. The procedure is also more clearly and easily defined and is relatively routine and predictable. It typically has a clear beginning, middle, and end point.
Services included in the CCJR bundle include:
- inpatient rehab,
- home health,
- skilled nursing facility, and
The following are services excluded from the bundle:
- unrelated services,
- unrelated hospital admissions, as identified by MS-DRG,
- unrelated Part B services based on ICD-9-CM/ICD-10-CM code,
- drugs paid outside MS-DRG (such as hemophilia clotting factors), and
- IPPS new technology payments.
Medicare is projecting the following results for the CCJR program:
- Decreased used of inpatient rehab and SNFs.
- Increased use of low-cost options, such as home care.
- Reduction in referrals to one-star and two-star SNFs.
- Closure of 25% of SNFs.
- One- and two-star facilities.
- No IT integration with hospitals.
- Suboptimal physical therapy programs.
- No clinical protocols.
- Poor physician collaboration and alignment.
- No effective medical director (rounding on patients daily).
- SNFs with strong medical direction and processes will flourish.
- Hospitals will de-emphasize the poorly performing SNFs when choice is provided.
The Five-Star Nursing Facility Rating System
As discharge planners, case managers are required to give our patients a “choice list” of facilities that meet their clinical needs, are within their geographically desired area, and are covered by their insurance. The notion of including quality or rating information was not part of this process. With this new approach, the skilled nursing facility’s star rating becomes part of the equation. Patients are informed of the star rating of the facilities they are choosing from, and while in the CCJR program they must pick a facility with a three- or four-star rating. The ratings are based on the following factors:
- Health inspections: Three most recent comprehensive annual inspections, and inspections due to complaints in the last three years.
- Staffing: Registered nurse (RN) hours per resident per day; and total staffing hours per resident per day.
- Quality measures: Values on 11 quality measures (QMs — a subset of the 18 QMs listed on Nursing Home Compare) to create the QM rating.
All skilled nursing facility ratings can be found at: https://www.medicare.gov/nursinghomecompare/search.html.
Be sure to include this information on your hospital’s choice lists.
The post-acute providers must comply with the following requirements:
- achieve quality and efficiency improvements,
- furnish services in the CCJR beneficiary episodes,
- payment must be proportionally related to CCJR beneficiary care,
- follow BPCI Model 2,
- document retention requirement, and
- maintain all books and records for 10 years.
There are a number of risks associated with the bundled payment models that, if not well managed, can have a negative financial effect on your hospital. These include the following:
- excess cost for poor management of episodes,
- hospital-acquired infections,
- paying others out of the bundle, as many billing systems are not set up to administer bundled payment contracts,
- medical device,
- hospital, and
- quality metrics accompanying payment are not met.
The CCJRs must maintain quality metrics to be eligible for reconciliation payments in the following ways. They must meet or exceed the following payment thresholds for all three measures:
- at or above 30th percentile each year for years 1-3, and
- at or above 40th percentile each year for years 4-5.
The three quality metrics are:
- Thirty-day readmission rate.
Complications: infections and PE within 90 days of hospitalization.
- a. Already decrease in complications from 3.4% to 3.1% in two years.
- HCAHPS survey: Sampling of all patients; already a decrease in readmission from 5.4% to 4.8% in two years.
THE ROLE OF CASE MANAGEMENT
The first step in managing the CCJR program is for your hospital to develop a steering or oversight committee. Many hospitals have already done this. Ensure that the appropriate key stakeholders are present, committed, and engaged in the process. Collect data and identify savings opportunities. Based on these identified opportunities, plan to make improvements in those that will provide the largest return on investment. Develop a dashboard or report card so that you can track and trend the data. Review the results monthly and modify your plan accordingly. It is critical that you implement your strategies quickly as the clock has already started ticking.
If you are a case management leader, you must realize that you are now part of the value-revenue cycle. Know whether you are in one of the geographic areas under the program. Take the time to evaluate your case management model, your staff’s roles, and their functions. In addition, you need to know and understand your cost-per-case for the DRGs that are included in the CCJR program. Determine your case management opportunities for cost per case, LOS, resource management (things ordered that have nothing to do with the procedure), and physician effect regarding practice patterns and resource utilization.
The effective and responsive case management department needs to ensure that they are performing the functions listed below. If not, incorporate these things as soon as possible:
Provide optimal care coordination, including the following:
- know the star ratings of all SNFs in your service area,
- know outcomes of SNFs, including readmissions and reasons for readmissions,
- plan for a barrage of home health agencies wanting to partner,
- know the outcomes of home health agencies, including readmissions and reasons for readmissions, and
- be prepared for next level of care providers to be confused about this initiative.
Manage your patient choice lists:
- ensure choice for SNF is a part of the discharge planning process,
- evaluate choice list to determine how to highlight SNFs based on star rating,
- consider limiting your choice list, and
- develop scripting for discharge discussions with patients.
Discharge planning requirements include the following:
- Provide beneficiary with complete list of available post-acute care options in service area consistent with need.
- The list should include beneficiary cost sharing and quality information where available and applicable.
- These requirements supplement discharge planning requirements under Conditions of Participation.
Other factors to consider include:
- Understand total joint certification by accrediting bodies.
- Partner with the person responsible for total joint accreditation in your hospital.
- Understand the total joint dashboard.
- Educate your staff.
- Review the “back to the basics” case management processes.
- Learn the bundled payment process.
- Plan to mentor your novice case management staff.
- Be aware that staff who work in other hospitals who may not be under this rule will need more focused oversight.
- Ensure adequate staffing to respond to this change.
- Review your readmissions for these DRGs and the source of the readmission.
- Understand root causes of previous readmissions.
- Collaborate with a hospitalwide plan to address LEJR readmissions.
- Look for patterns and trends associated with physicians and post-acute providers.
The depth of the changes you may have to make will depend on the volume of cases you discharge with the two DRGs included. If your hospital is a small player, you may not need to consider huge changes to staffing or processes. However, if your hospital is a larger player concerning joint replacements, it is prudent to enact as many corrective actions as are necessary.
CASE MANAGEMENT TEAM LEADS FOR CCJR EPISODES
As your patients transition to other levels of care, it is important to be sure the team transitions as well. Each level of care should identify the lead team member who will ensure that cost and quality indicators are being met for these patients. Below are suggested team leads for each level of care listed:
- Inpatient hospital: RN case manager supported by social worker.
- Outpatient: RN case manager or physical therapist.
- Physician office: RN case manager, physician assistant or nurse practitioner.
- Inpatient Rehab: Physical therapist supported by social worker or RN case manager.
- Skilled nursing facility: Physical therapist supported by social worker.
- Home health: Physical therapist supported by RN case manager.
As a case manager caring for patients in the CCJR program, there are many things you can do to assist the patient and the hospital in performing well under this program. Optimize your role in the categories listed here:
- Utilization management: You are now your own UM case manager.
- Discharge planning: Involve the social worker early, if needed; provide preoperative discharge planning; collaborate with perioperative case manager.
- Care coordination: Decrease all avoidable/delay days.
- Resource management: No procedures/treatments unrelated to reason for admission.
As a social worker in the CCJR program, you can optimize your role in the following ways:
- Discharge planning: Timely response to all referrals; timely self-referrals when appropriate; participate in preoperative discharge planning as needed; collaborate with perioperative case manager.
- Care coordination: Decrease all avoidable/delay days.
The CCJR program is a complex one. It is important that case managers, social workers, and case management leaders educate themselves on the program and what they can do to be successful partners in this process. Use total joints as a pilot to prepare for future bundles. They are on the way!
As we have discussed in prior editions of Case Management Insider, the 2010 Affordable Care Act was a game changer for the healthcare system. The payment reforms it introduced began the process of requiring health systems to communicate across the continuum of care and to reduce and/or eliminate existing silos. This across-the-continuum integration required sharing of accountability for cost and quality of care among providers.
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