Senior executives from major health systems recently gathered with HealthLeaders Media and Bank of America Merrill Lynch to discuss their experiences in managing risk-based reimbursement contracts. Topics ranged from reorienting physician expectations to identifying the right reimbursement models. Excerpts from their discussion highlight key strategies, challenges and successes.
HOW TO BUNDLE ORTHOPEDIC PAYMENTS
"In the world of orthopedics, most of the successful bundling of payments has involved learning how to manage the episode of care...We have convinced our doctors that they are the care managers and no longer just orthopedic surgeons. That's a reorientation in thought process because there is no training program in the United States that does anything other than train doctors in orthopedics to be surgeons and operate. Surgery represents 1% of the entire episode of care. So they are spending five years learning how to manage 1% of the episode. … We know the post-acute care world is where the best gains can be made, so we spend a lot of time in that area with our 175 doctors."
Louis Levitt, MD
Vice President and Physician
Centers for Advanced Orthopedics
MANAGING HIGH-RISK PATIENT CARE
"You have to do risk stratification for care management, particularly in the Medicare space. About 10% to 20% of the Medicare population are in need of care management…For example, in geriatrics, one of the worst risks is the risk of having to go to a nursing home. The risk factors for that are completely different than the risk factors for going into the hospital. If you have Alzheimer's disease, that is the risk factor for going into the nursing home. Alzheimer's probably affects the hospitalization risk, but not as much as heart failure or coronary artery disease."
Alan Lazaroff, MD
Co-Founder and Coding Medical Director
Physician Health Partners
MEDICARE ADVANTAGE CONTRACTING
"In our view, Medicare Advantage is a much more satisfying contract than the Next Generation or Medicare Shared Savings Program ACO models. It's a couple of factors. One is the payment mechanism. We have a percent of premium, which is very reliable, so you know your revenues. But, even more importantly, is the issue of choice. When someone joins Medicare Advantage, they agree to pick a primary care provider, and they agree to manage care within a referral circle. On the ACO side, whichever Medicare ACO you pick, the Centers for Medicare & Medicaid Services have been very clear that beneficiaries have all the choice and all the options as fee-for-service Medicare beneficiaries. When we have looked at the patients who have been attributed to us in the Medicare ACO world, typically they do get 90% of their care from us and it works out okay, but we don't have the ability to fully manage it."
Rick Lopez, MD
Senior Vice President of Population Health
How can providers avoid pitfalls?
"My sense is that most providers are struggling with data—having congruent access to data with the payers, so you have all that claims data in a way that you can consume it. You need data analysts who can merge claims data with EHR data and any other data sources related to socioeconomic issues that can help predict risk in patient populations. You need clarity about the composition of the population, how you are going to measure success, and the spending benchmarks. Another problem is that every provider is dealing with multiple payer contracts, and the rules are different for each one. So, how do you create one process and one set of business rules that work for all of the different payment arrangements that you are under?"
Credit Products Executive
Bank of America Merrill Lynch