Today we are in a tsunami of change in how healthcare providers are paid. No matter what it is called: The Affordable Care Act (2010), The Medicare Spending per Beneficiary Initiative (October 2014), the Better, Smarter, Healthier Act (January 2015), bundled payments, or the Medicare Shared Savings Program, the traditional fee-for-service business environment, which rewarded volume over quality, has forever changed.
Shifts in Regulatory Policy
The U.S. healthcare system is currently in a state of disruption as the major players (providers, insurers and patients) adapt to the new policies, summarized below:
Hospital Readmission Reduction Program
The Hospital Readmission Reduction Program, passed as part of the Affordable Care Act, requires the federal government to reduce payments to hospitals with too many readmissions. The program began October 1, 2012.
Implications: Hospitals are under increasing pressure to keep patients from being readmitted, especially those with Heart Failure
Almost six million people in the United States are living with Heart Failure; each year, approximately 1 million of them are hospitalized. According to The National Institutes of Health, Heart Failure is the top reason older adults are hospitalized. Of those who are hospitalized, more than one in five will be readmitted to the hospital within 30 days; more than half will be readmitted within 180 days. Most patients (even those who are very sick) who attend CareConnext are able to remain hospital-free for up to seven months.
Medicare Spending Per Beneficiary (MSPB)
The Medicare Spending per Beneficiary initiative launched October 2014 and is designed to measure and evaluate hospitals’ efficiency, as reflected by Medicare payments made during an MSPB episode, relative to the efficiency of the median hospital. An MSPB episode includes all Medicare Part A and Part B claims paid during the period from 3 days prior to a hospital admission (i.e., index admission) through 30 days after discharge from the hospital. A hospital’s MSPB Measure is calculated as the hospital’s average MSPB Amount divided by the median MSPB.
Implications: Hospitals are under pressure to discharge HF patients to high quality, low cost programs
The MSPB initiative rewards healthcare providers who discharge patients to their homes or home health, rather than expensive skilled nursing facilities. This program also requires hospitals to evaluate outcomes of the referring organizations as the total spending includes spending 30-days after discharge. CareConnext is the lowest-cost option for heart failure patients being discharged from the hospital; in addition, CareConnext represents a new source of revenue for providers themselves.
Better, Smarter, Healthier ACT, January 2015
A new framework under the Affordable Care Act was announced to move our healthcare system away from fee-for-service toward rewarding quality. The goal is to tie 30 percent of payments to quality and value through alternative payment models by 2016; that increases to 50 percent by 2018.
Implications: Moving our healthcare system away from fee-for-payment towards pay-for-performance has been accelerated making it increasingly important for healthcare providers to both measure and improve patient outcomes.
This is a pilot program that began in 2013 to give one lump sum for a course of treatment rather than the traditional fee-for-service payments. An episode of care will begin three days prior to a hospital admission and last 30 days past discharge.
Implications: CareConnext offers organizations a way to lower their financial risk when caring for Heart Failure patients under a bundled payment option.
Medicare Shared Savings Program (MSSP) allows for the establishment of Accountable Care Organizations, or ACOs. Qualified ACOs will be able to share in any savings their practices generate for Medicare. The ACO is both a system of delivering care to patients and of receiving payment from insurers. The goal of an ACO is to create “shared savings” for both the health care system and for the government. These savings will ideally accrue from improving the health of individuals and the population as a whole, and from decreased health care costs.
Implications: Accountable Care Organizations benefit from offering CareConnext to those member practices with high rates of heart failure readmissions or non-compliance.