July ACO Call: Colorado Strategies
August 28, 2011
Posted by chcablogadmin in : ACO Update, Healthcare Reform
Notes from July 21, 2011
Presenters:
Bruce A. Harma, FACHE, Director, Managed Care, Children’s Hospital Colorado
Dave Anderson, BDC Advisors
Presentation
Appendix – Medicaid ACC
Value Based Payment Models Grid — UPDATED
CHCA hosts a monthly conference call series highlighting Owner Hospitals’ movements in the evolving post-reform and ACO marketplace. During the July call, Bruce A. Harma, FACHE, Director, Managed Care, Children’s Hospital Colorado, provided background about the state’s Medicaid accountable care collaborative, shared one of his hospital’s accountable care initiatives for the commercial sector, and highlighted several quasi-governmental agencies working on reform initiatives in Colorado. Attached are the handouts from this conference call and the audio recording.
Overview
Colorado is very proactive in the area of health care reform. The political arena around health care is very active and the state is lock-step with federal reform initiatives. (Editor’s Note: this call updates previous information present in ACO Update on Colorado’s Medicaid Accountable Care Collaborative.)
State’s ACO Plan
Colorado’s Accountable Care Collaborative project was created in response to failed attempts at capitated managed care in the state. In addition, 85 percent of Medicaid is in an unmanaged Fee-For-Service (FFS) system. The current economic situation is unprecedented and Medicaid caseload is at an all-time high. The goal of the collaborative is to reduce costs and improve health, not just utilize more services.
There are three program components: statewide data and analytics contractor (SDAC), regional care collaborative organizations (RCCOs) and primary care medical providers.
The SDAC vendor, Treo Solutions, Inc., is responsible for data repository, data analytics and reporting, web Portal and access, and accountability and continuous improvement.
The PCMP provides a medical home with focus on primary care, general practice, internal medicine, pediatrics, geriatrics, or obstetrics and gynecology. Services are provided by a physician, advanced practice nurse or physician assistant. They are also responsible for the appropriate referrals.
The role of the RCCOs is to provide network and regional strategy, provider support, medical management, accountability and care coordination. Currently two RCCOs are up and running—Colorado Access and Rocky Mountain Health Plan. Enrollment for each RCCO will be expanded In July of 2012.
In terms of performance measures, in the initial year the collaborative will calculate monthly utilization measures and quarterly cost savings analyses. In subsequent years, there will be hybrid of utilization and quality outcomes measures.
Payment for the collaborative is collected through stakeholder participation—fee-for-service (FFS) reimbursement to PCMPs for medical services, a per member per month (PMPM) fee to PCMP for medical home services, and a PMPM fee to the RCCOs for PCMP support and care coordination. The collaborative will be eligible for incentives after documented savings.
The initial enrollment goal is 60,000 total Medicaid clients (40,000 adults and 20,000 children). Expansion enrollment goals include the approximately 400K remaining Medicaid FFS clients. Clients for the collaborative are selected from claims history—FFS and primary care patients—dual eligibility and institutionalized patients are excluded.
The access to care is client-centered. The PCMP serves as the medical home and refers to specialists. Referrals are not needed for emergency care, early prevention screening and diagnostic testing, anesthesiology, transportation, family planning, behavioral health, obstetrics and dental and vision care.
Colorado Pediatric Collaborative (CPC) – Children’s Hospital Colorado’s Accountable Care Initiative
The CPC is a three-organization partnership between Children’s Hospital Colorado, Colorado Pediatric Partners (a multi-specialty IPA of over 200 physicians) and Physician Health Partners (multiservice center providing quality improvement, EHR support, clinical reporting, care coordination strategies, contracting, etc.).
The model of the collaborative includes evidence-based guidelines and clinical education, clinical quality improvement, and HIT and data analytics. The CPC’s Triple Aim approach to clinical integration includes population health, patient experience and per capita cost.
We are collaborating with payers to move several initiatives forward. One of our current clinical initiatives is Pediatric Respiratory Care (ABC program) treating asthma, bronchiolitis (home oxygen program) and croup. There is strong evidence that our initiative is driving some savings in addition to reducing length of stay and admissions. Two other projects are focused on immunizations and an obesity pilot. Taking these types of quality initiatives straight to payers can be powerful. We’ve seen lots of interest from payers in our discussions.
There are myriad reimbursement models we’re discussing for the collaborative. We’re not closing any doors on possibilities. Some of the options include shared savings, PMPM case management fees with or without shared savings and global risk sharing/episodes of care bundling. One out-of-the-box financing idea is at-risk deductible capture or direct monthly member pre-pay.
Center for Improving Value in Health Care
CIVHC is one of the quasi-governmental state agencies providing state directed reform initiatives. This Colorado managed care collaborative has been up and running for some time and offers macro integration with long-term goals. CIVHC’s unique role includes identifying and supporting initiatives to break down silos and scale up solutions. It also provides data to allow the market to measure and purchase services based on value. The group is getting some traction in helping to channel resources to support transformation and our hospital has a participating work group. The organization’s long-term goals include specific targets in four focus areas—consumer-centered experience, improved population health, bending he cost curve and increased transparency. For more information, visit www.civhc.org.
Colorado Regional Health Information Organization (CORHIO)
Sponsored by the government and private sector, CORHIO is designated by the state to facilitate HIE. The organization collaborates with health care stakeholders including physicians, hospitals, clinics, mental health, public health, long-term care, laboratories, imaging centers, health plans and patients. The goals are to have HIE deployed in every CO community by 2015 and establishing 85 percent of all primary care and safety net care providers as well as all providers statewide are meaningful users of HER by 2015. For more information, visit www.corhio.org.
CO Health Insurance Exchange
Colorado is one of the states moving on this federal initiative. The Exchange has a nine-member oversight board appointed by the governor of Colorado and in now active. They have had their first meeting and operational leadership is in place. Public interest has been overwhelming. The Exchange has four main work groups: date analysis, simulations, and demographics; small Employers Focus; IT solutions, and marketing, education and outreach. The deadline for federal certification is Jan. 1, 2013.
Q&A
Dave Anderson asked Bruce some follow up questions.
Q: There is good work going on in Colorado but several groups are in slightly different stages. It is obvious that some kind of managed care is needed to manage Medicaid costs. Will RCCOs manage entire populations including children? Will it be more difficult for them to access children’s hospitals and does this make force you to contract with large, integrated adult systems?
A: We decided early on what our role would be. We didn’t want to tie ourselves to any single RCCO. We will work with and collaborate with all of them via our specialists. We’re working closely with the state and it’s our best approach. We have good relationships with RCCOs in our service area. We have to focus on pediatric care as much and possible and try to change the mindset.
Q: Are different RCCOs treating you differently?
A: We have seen some RCCO patients in our facility. We currently have good relationships and communications with them. We might be able to contract more in the future.
Q: How are you approaching value based payment models or incentives around traditional FFS savings?
A: The data repository and analytics are different for pediatrics. You will want to have an impact on contractors doing this work and potentially engage a pediatric subcontractor. Case management for children is different as well. We’re facing this battle on several fronts. We’re collaborating with commercial payers to measure us on a playing field for pediatrics.
Q: How much will the CO Health Insurance Exchange affect you?
A: The underlying notion is reimbursement from participants will be low. Colorado Medicaid reimbursement is one of the lowest in the country. Exchange reimbursement is expected to be in aggregate closer to Medicaid reimbursement that that of commercial payers. Of course, our concern is that it will drive down revenue stream.
Q: Do you how many patients will come from the Exchange and how much it is like to affect children?
A: There hasn’t been any analysis or numbers we’ve seen.
add a commentWEBCAST UPDATE: J.P. Morgan Economic Outlook – Debt Crisis 2011
August 14, 2011
Posted by chcablogadmin in : Financial Viability, Healthcare Reform, Industry Trends, Leadership
We thought we’d give you a brief synopsis and another chance to hear a timely webcast from last Thursday–several of you were on the call. Bob Muller of J.P. Morgan outlines the current ecomonic situation and recent events in D.C. including the downgrading of our U.S. credit rating with S&P. No doubt, you are all following these events closely as they dramatically unfold. Bob offers great takeways and action items for children’s hospitals at the end of the recap. – JR
INTRO:
Given the current goings-on in Washington and concern over the impact on CHCA Owner Hospitals’ VRDBs, we thought it would be very timely to hear from Bob Muller, Managing Director – J.P. Morgan Chase & Company. During the webcast, Bob shared his take on the U.S. debt crisis and the potential impact on the bond market and children’s hospitals. (You may access the webcast and PowerPoint or PowerPoint only below.)
NOTES:
The last few weeks in the financial industry and in Washington have been stunning to say the least. There is a new normal over the last few days with bouts of intense volatility in the market. What does it mean for you going forward?
There is a possibility of real reform but also the possibility of increased gridlock on the political front.
Although the S&P could have waited to make the decision to downgrade our credit rating, there are justifications and S&P has explained their position very clearly. They would not accept the U.S. continuing to take on more debt to reach Italy’s level of net debt to GDP in the next 10 years. The Budget Control Act didn’t bend the cost curve significantly enough through cuts and budget adjustments.
This is a meaningful event that will have a ripple impact for decades to come. It is the most important credit action I’ve seen in my 30 years as an economist. Eventually, every credit area including your own rating will be impacted.
The debt ceiling agreement opens the possibility of real reform, or could be the continuation of unsustainable policies.
If the President and Congress reach an agreement on spending cuts and revenue increases that avoids sequestration and deals with entitlements, Moody’s may keep our rating at “AAA” and S&P could stabilize at “AA+.” An S&P increase to “AAA” won’t happen anytime soon. We need to not only stop the debt load increase but show true reversal of the trend. If this scenario plays out, health care payments to providers will be curtailed but benefits won’t be eliminated.
If the “super committee” fails to approve a deal or a compromise is rejected by Congress or the President, automatic sequestration kicks-in. This will result in losing our Moody’s “AAA” rating and the S&P will further downgrade us. Sequestration results in mal-distributed cuts which would have to come from discretionary budget funds. This is what the government does for us: workers, Social Security check processing, federal research grants, the EPA, energy subsidies, etc. Mandatory spending would be walled off—food stamps, Medicare, Social Security, etc.—but Medicaid would be cut by two percent.
The deal improves the debt-to-GDP trajectory, but with few immediate cuts, much of the implementation is left for future congresses.
The actual FY budget cuts kick in with $900 billion to deal with including NIH funding which picks up momentum in ’13 and ’14.
By walling off entitlements, discretionary spending will be hard hit (especially if the automatic sequester kicks in).
If the “super committee” can’t reach consensus which it may not with its makeup of “super liberals” and “super conservatives,” sequestration will further affect discretionary cuts. Health and Human Services would be greatly reduced which in turn would have some impact on every American. If the Defense budget is threatened push back on sequestration might lead the committee to look at revenue increasing measures including limiting tax deductions.
Defense spending is the other prime area targeted for savings. However, health care spending will be the major driver of spending growth. Health care costs are the single biggest issue dwarfing the costs of Social Security. Calculations show the majority of increases in Medicare and Medicaid—mainly in rising nursing home cost projections.
Revenue increases are also needed, but solely taxing the rich is insufficient.
To bend the curve back and reinstate the triple rating, a Pew analysis shows a multi-pronged approach is needed to reduce debt. The required permanent spending cut and tax hike would be about 12 percent beginning in 2016.
The S&P downgrade drew headlines, but broad underlying economic weakness caused the significant fall in rates and equities.
We’ve only seen the market gain and lose these percentages in the same day seven times over history. However, we’ve received recent good news on unemployment rates and decreased energy prices. Consumer confidence is shaken and if stock prices continue to drop and stay declined, higher income consumers won’t spend.
Tax-exempt rates follow UST yields lower over the week; volatility is expected to continue on the back of S&P downgrade of the U.S.
Municipal bond funds experienced heavy outflows of $232 million last week.
Tax-exempt rates are below historical averages.
They are at the lowest rate in 20 years. It is a good time for a high-rate borrower to fund projects.
Although forecasting is difficult, interest rates are generally expected to increase in 2011.
Q&A
Q: Forecasts might indicate a recession. Are we in one?
A: No, I don’t think so. Our jobless claim numbers have improved which belies a recession. At J.P. Morgan, we estimated odds of another recession as three-to-one. However, there is concern about Europe—they could be sliding toward a recession.
Q: If Defense spending is cut, won’t that have a significant impact on unemployment?
A: Yes, it could keep us from a further reducing unemployment or even raise the numbers. Sequestration would have a huge impact. States affected would have to make other cuts. Maryland, Missouri, Connecticut and other states with large procurements along with the Sunbelt states with most of the military bases would be hardest hit.
Q: What are your thoughts about the makeup of the “super committee?”
A: On a simple macro level, the members reflect the current divisive ideology in D.C. However, there might be members willing to compromise. Republican members Rob Portman of Ohio and Pat Toomey of Pennsylvania seem to be reasonable.
Even the best outcome by the “super committee” won’t end with the best solution. The best case scenario has to address an increase in revenue and reduction of tax deductions, maybe even those for non-profits. This would have a direct impact on your endowments and fund-raising ability.
Q: Is there a call-to-action or do you have advice for our children’s hospitals?
A: 1.) It is a free-for-all in D.C. right now and will be for the rest of the year, not just with the “super committee” but with specific areas of reduction. NIH will be hit hard. As you protect your interests, they may push back. So, you need to have a strong lobbying strategy and a presence like never before. Children’s hospitals will need to fight the Defense and the non-discretionary items to keep Medicaid payments and other funding.
2.) S&P changed the economic landscape with our downgraded rating. Rating agencies have not mentioned health care yet but they will start figuring out the context of a reduction in entitlement program payments and impact on your financial picture. You need strategies for protecting your credit ratings. As the sovereign rating is downgraded, your rating will ultimately be affected. Children’s hospitals’ dependence on government revenue means you will be required to be more transparent in your interactions with the government and rating agencies will ask for much more information.
3). Be aware that your investments are threatened. If the volatility of the market continues and prices and values drop and won’t rally on a sustained basis, then your portfolios will be affected.
4.) Interest rates are very low—historically low. If you need to finance or refinance it is an attractive time for fixed rates.
Observation Patient Trends and Management Strategies
August 14, 2011
Posted by chcablogadmin in : Financial Viability, Industry Trends, Manpower & Workforce
Operational and financial challenges exist when children’s hospitals use the “observation status” patient category. To understand observation patient trends for children entering hospitals through Emergency Departments, a group of physicians, operational leaders and CHCA staff members analyzed PHIS data from 16 CHCA hospitals. To prevent costly delays in throughput for patients entering the ED, the group offered several successful strategies. They include monitoring entry points to identify appropriate patient status early in the stay, educating staff on observation guidance (medical necessity) based on Medicaid, Milliman© and/or InterQual® criteria, developing order sets and/or pathways to avoid delays in treatment, and forming relationships with payer groups to facilitate prevention and timely resolution of denials. Learn more about the groups’ findings and additional strategies. If you have questions, please contact Carla Hronek (carla.hronek@chca.com or 913-981-4165).
Your Artwork Brightens St. Louis E.D.
August 14, 2011
Posted by chcablogadmin in : Leadership
You may remember the paint-by-numbers group art project from last February’s Executive Dialogue. The winner of the raffle for the completed masterpiece was St. Louis Children’s Hospital.
The print brings color and fun to our Emergency Department patient waiting room for all to enjoy. — Lee Fetter, President, St. Louis Children’s Hospital
Thanks to all for your particpation!
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