Implications For Out Patient Physical Therapy Providers

1
Pay For Performance

• Implications For Out Patient Physical Therapy
  Providers

2
What Is IT?

• Paying for results or P4P or Value Purchasing
• Pay for quality
• Common in non health care Its the American Way
  You pay for what you get!
• Now all providers get same pay regardless of
  results, pay based on procedures only
• Based on rewarding providers for delivering a
  service
• with expected outcome
• expected number of visits
• Patient satisfaction

3
What Is It?

• Concept requires providers are accountable for
  the service they provide
• It requires standard measurements available that
  are risk adjusted, consistent, clinically
  relevant,to be used as a benchmark
• It must be for use by all providers
• Providers are rewarded for a level of performance
• Encourages evidence based practice
• Could reduce fraud and abuse/ billing for
  unnecessary care

4
What Is It?

• Could be Structural- IT investment
• Could be Process
• EMR, Providing Information, Patient Satisfaction
• Could be Outcome
• Concept uses a risk adjusted standard or
  benchmark that measure service efficiency and
  effectiveness
• Using these benchmarks allows the payer to
  establish payment scenarios that match provider
  performance to benchmark
• Providers could be paid based on performance
• Payment could be a bonus, paid as billed or
  reduced
• Will be care based on need, payment based on
  results

5
What it Could Look Like

• Pay for Reporting
• Pay For Improvement
• Pay For Results
• Could include all or go through all phases
• Payment could include
• case rate (APGs) plus bonus
• Fee For Service bonus

6
What could it look like?

• Payers Contract with networks that use outcomes
  to manage providers in P4P model
• Network collects data and pays member providers
• Network reports network performance to payer
• Network educates providers
• Both should be staged in to allow provider
  adjustment
• Both should allow reward for clinical improvement

7
Why Is It being considered?

• Institute Of Medicine
• Introduced in a book Crossing the Quality Chasm
• To align incentives
• Payers and employers are tired of health care
  being a Black Hole where they
• Dont know what they paid for
• Dont know the benefit of what they paid for
• Dont know when enough is enough
• Payers reacted with gate-keeper, visit limits,
  limits, administrative hurdles, discounting,
  even visits/ICD-9 screens - none controlled costs

8
Who is Talking About It?

• It is needed to fund the necessary investment in
  IT to make P4P possible
• John Rother, AARP
• We are paying 2X what other nations pay for
  health care in a system not designed to get the
  best outcomes for the lowest cost
• R.I. Congressman P. Kennedy (IT bill sponsor)
• We can no longer simply pay the bills for health
  care without using those payment as an incentive
  to improve the quality of care
• John Rother, AARP

9
Who is Talking About It?

• P4P programs, which link financial incentives to
  a health care providers ability to deliver high
  quality medical care, are changing the way that
  many insurers and providers look at health care
  economics Health Leaders Magazine, 2/2005
• 57 of respondents rated P4P as an extremely or
  effective way to reduce health care costs The
  Commonwealth Fund. 5/2005
• P4P is not going away and it is going to change
  the way we practice, between 100 and 120 P4P
  programs are currently overseen by the federal
  government or private insurers Ron Bassinger,
  MD, Past President of the California Medical
  Association

10
Who is Talking About it?

• PricewaterhouseCoopers report HealthCast
  Tactics A Blueprint for the future identifies
  P4P as the significant trend for health care in
  the next 5 years
• JAMA (5/2005) reports that incentive design
  matters in a study that compares changes in a
  funded California P4P plan (Pacificare) to a
  non-funded quality plan. The California doctors
  achieved a 1.9 improvement compared to .2 in
  Oregon even with 75 of bonuses going to
  previously high performers that did not
  significantly improve.

11
Who is Considering it?

• Medicare Payment Advisory Commission proposes P4P
  in Medicare
• Senate and House have submitted legislation on
  P4P concept for Medicare
• National Quality Forum Recommends P4P as central
  piece of a modernized health care system
• National Business Coalition on Health emphasize
  use of value purchasing in health insurance
  contracts
• CMS is considering P4P expansion for Medicare
  reimbursement
• Many Private payers- 1/3 already have P4P in place

12
Who is Considering it?

• National Quality Forum sponsored value
  purchasing workshop requested by CMS
• It is likely that within a relatively short
  time, pay for performance programs will become
  the norm for healthcare reimbursement.
• Incentive rewards for
• IT investment
• Disease management Diabetes, Heart attack,
  etc.
• Following Evidence based practice
• They must be based on standardized measures of
  quality and agreed-upon principles and
  guidelines.
• Kenneth Kizer of National Quality Forum

13
Who is Doing it?

• History proves that reimbursement shapes practice
• Capitation in all segments of health care
• PPS (DRG) in hospitals
• PPS in Skilled Care - SNF
• PPS in home health
• These focus on efficiency
• Medicare has 2 programs that pay hospitals an
  additional 40 basis points (.4) for reporting 10
  quality indicators
• Over 2700 hospitals have signed up to report on
  quality measures
• 1/3 of all Health Care Plans have some form of
  P4P in place now- based on process quality, not
  yet outcomes

14
Who is Doing it?

• Pacificare, a California health plan
• reduced costs 20 with their Quality Index and
  Value Network program and improved quality scores
  20
• Aetna
• has its Aexcel Network of Specialists that
  demonstrate higher effectiveness. Lower
  co-payments drives up volume.
• Cigna HealthCare (CA.)
• rewards top 50 of MDs, with increased PMPM rate,
  based on clinical and satisfaction metrics. Paid
  out 4M in the 1st year.
• Health Net (CT.)
• has partnered with the state medical societies
  Individual Practice Association in enhancing
  payment in a P4Q program
• Central Florida Health Coalition
• will give rewards to Health providers who meet
  clinical, financial and patient satisfaction
  standards

15
Who is Doing it?

• HealthPartners (MN.)
• has implemented, in 1997, an Outcomes Recognition
  Program and has paid nearly 4M to groups meeting
  performance standards.
• Highmark Blue Cross Blue Shield
• has adopted a Quality Incentive Payment System
  that rewards improvement in key measures. In the
  10th year paid out over 12M.
• Independent Health
• is paying bonuses to MDs who exceed performance
  targets on key issues
• WellPoint has several P4P Programs
• Anthem BCBSs Coronary service centers (IN, KY,
  OH)
• Anthem BCBS (VA) QHIP system paid 16 hospitals
  and additional 6M in 2004
• BCBS (CA) paid 57M in quality bonus payments to
  134 medical groups

16
Who is Doing it in PT?

• Medicare CMS grant to FOTO for a small
  feasibility study to assess ability to use
  outcome model in P4P, report due in June of 2006
• PHP in New Mexico is in first step of moving to
  P4P in OP rehab
• CSC old AdvanceMed has been engaged to conduct
  an Outpatient Alternative Payment Study by CMS

17
Why We Should Embrace It

• Providers will adapt to the challenge by
• becoming better stewards of patient care
• Providers will have a common language to
  communicate with payers, consumers and policy
  makers, employers
• PT will have a stronger position because PT can
  prove our value
• PT will be driven to evidence based care, raising
  the standard for all providers
• Consumers will be given information with which to
  choose providers

18
Why We Should Embrace It

• Payers will publish your results
• Already begun for hospitals and SNF
• This moves market share, along with payer
  incentives to use high quality providers
• Help consumers select plans, providers or
  treatment
• Do the right thing for your patients Advance the
  profession
• Easier to ride the horse in the direction it is
  going

19
Essential For Rehab

• Reliable, valid, responsive measures with
  published psychometrics
• Patient reported and clinician reported data
• Risk adjusted patient by patient
• Centralized aggregated database that can be risk
  adjusted
• Data collection concurrent with the episode of
  care
• Measure patient by patient/paid patient by
  patient
• No undue burden involved in data collection
• System must foster better clinical decision
  making
• Help providers to improve quality of care

20
Possible Methods For Rehab

• Based on predicted efficacy and efficiency from
  risk adjusted database
• Payers mandate outcomes system
• Patient fills out questionnaires at admission and
  discharge
• The predicted visits and outcomes for the patient
  is compared with actual, and values are submitted
  to payer
• Payer applies payment algorithm based on
  efficiency and effectiveness
• Payer may provide incentives and
• reduce administrative rules authorization in
  exchange for provider collecting outcomes
• institute Preferred providers that receive higher
  compensation
• This outcome system is available now

21
The Importance Of Risk Adjustment

• Risk adjustment allows for adjustment in
  reimbursement based on co-morbidities, acuity,
  age, DX, surgery history, severity
• Risk adjustment is only way to fairly administer
• Payment algorithm will be based on efficiency and
  effectiveness of these risk adjusted data
• Payment algorithm can only be implemented if
  there is a large database

22
FOTO Value Purchasing Payment Algorithm

• Possible Payment algorithm based on effectiveness
  and efficiency
• Bonus for
• Greater than predicted outcomes (effectiveness)
  and efficiency (visits)
• Penalty for
• Worse than predicted outcomes (effectiveness) and
  efficiency (visits)

23
Predicted
13.4
Predicted
Functional Change
Visits
9
24
Predicted
Greater Effectiveness
Greater Effectiveness
Greater Efficiency
Less Efficiency
13.4
Predicted
Expected Effectiveness
Functional Change
Expected Efficiency
Greater Efficiency
Less Efficiency
Less Effectiveness
Less Effectiveness
Visits
9
25
Predicted
Greater Effectiveness
Greater Effectiveness
Greater Efficiency
Less Efficiency
Paid Projected Visits Bonus
1
Paid Projected Visits Bonus
Paid Projected Visits Bonus ??
Paid Projected Visits Bonus
Paid Projected Visits Penalty
Paid Projected Visits
13.4
Predicted
Functional Change
Expected Effectiveness
Paid actual Visits Penalty
actual Visits Penalty
Paid Projected Visits Penalty
Expected Efficiency
Greater Efficiency
Less Efficiency
Less Effectiveness
Less Effectiveness
Visits
9
26
Concerns

• Data validity is essential
• Valid attribution of cause of outcome
• Interoperability
• Risk of multiple health care plans using
  different benchmarks, forcing providers to use
  many benchmarks
• need is for an industry wide homogenous system
• Administrative burden to collect/report data
  Incentives must be sufficient to move behavior
• Lack of unified and informed leadership of
  stakeholders

27
Preparing for it

• Start using a national benchmarked outcome
  process that is risk adjusted for each patient
• Manage patient care now with risk adjusted
  predictor reports generated for each patient-
  train staff to become internal case managers
• Start using evidence based treatment to improve
  outcomes
• EvidenceinMotion.com
• Become Hooked on Evidence
• See APTA Web site
• Those with incentive programs, include outcomes
  as central component effectiveness, efficiency
  and satisfaction
• Added benefit of marketing, practice management

28
Preparing for it

• Physical Therapy Profession
• Emphasis on Research and Science basis for PT
  has resulted in
• scientists are producing better measures of
  outcome- i.e. CAT
• scientists are producing better patient
  classification systems and clinical prediction
  rules which lead to evidence based practice,
  getting better outcomes
• Society demands better, so providers will be
  incentivized to use the evidence for care, then
  P4P can be applied
• P4P modifies clinical behavior where better
  clinicians get better pay

29
Preparing for it

• Payers, society, employers and government want to
  get a handle on health care costs and improve
  quality
• All stakeholders are willing to pay for quality
  IF they can measure it
• Now, in Out Patient PT/OT it is possible to
  measure, report and benchmark efficiency, and
  results of care
• The trend is toward value purchasing so this is
  chance for PT to take the lead and dialogue with
  all stakeholders to shape it

30
Pay For PerformanceValue Purchasing in PT

• Questions?