1. Alternative Payment Opportunity
Case Study: Massachusetts
Children’s High-risk Asthma
Bundled Payment Pilot
Katharine London
Center for Health Law and Economics
June 13, 2013

2. Overview
• What are alternative payment methods?
• How can alternative payment methods
support preventive care?
• Case Study: Massachusetts Children’s
High-risk Asthma Bundled Payment
(CHABP) demonstration
June 13, 2013
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3. WHAT ARE ALTERNATIVE
PAYMENT METHODS?
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4. Relevant ACA Provisions
S.2704: Demonstration project to evaluate integrated
care around hospitalization. Bundled payments for
hospitals and physicians under Medicaid.
S.3023: National pilot program on payment bundling.
Bundled payment models under Medicare.
S.2706: Pediatric Accountable Care Organization
demonstration project. ACOs that meet quality targets
and reduce costs share savings with the Medicaid
program.
S.3022: Medicare Shared Savings Program. ACOs
that meet quality targets and reduce costs share
savings with the Medicare program.
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5. What are Accountable Care
Organizations (ACOs)?
CMS definition:
“Accountable Care Organizations (ACOs) are groups of doctors,
hospitals, and other health care providers, who come together
voluntarily to give coordinated high quality care to their Medicare
patients.
“The goal of coordinated care is to ensure that patients, especially
the chronically ill, get the right care at the right time, while avoiding
unnecessary duplication of services and preventing medical errors.”
Examples:
• Medicare Shared Savings Program
• Advance Payment ACO Model
• Pioneer ACO Model
Source:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect=/aco/
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6. Payment Methods
• Fee-for-Service: A payment approach in which
health care providers receive a separate fee for each
service they deliver. (Traditional payment method)
• Shared Savings: A payment approach whereby a
provider or provider organization shares in the savings
that accrue to a payer when actual spending for a defined
population is less than a target amount. (Example:
Medicare demonstration)
Source: Adapted from “Payment Reform: Bundled Episodes vs. Global
Payments: A debate between Francois de Brantes and Robert Berenson.”
Timely Analysis of Immediate Health Policy Issues, September 2012.
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7. Payment Methods
• Bundled Payment: A single payment to cover the cost of
services delivered by multiple providers over a defined
period of time to treat a given episode of care (e.g., a knee
replacement surgery, or a year’s worth of diabetes care).
(Example: MassHealth Primary Care Payment Reform
Initiative)
• Global Payment: A fixed-dollar payment (“capitation”) for
the care that patients may receive in a given time period,
such as a month or year. Global payments place providers
at financial risk for both the occurrence of medical
conditions as well as the management of those conditions.
(Example: Blue Cross Blue Shield of MA Alternative
Quality Contract)
Source: Adapted from “Payment Reform: Bundled Episodes vs. Global
Payments: A debate between Francois de Brantes and Robert Berenson.”
Timely Analysis of Immediate Health Policy Issues, September 2012.
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8. Key Terms
• Financial risk: Assuming liability for the financial loss that
could occur if actual costs exceed expected costs.
• Risk adjustment: A process of adjusting payments to
providers to reflect patient characteristics, especially health
status, age, sex, and other demographic characteristics.
• Risk corridor: A provision that limits a provider’s financial
losses or profits to a specified percentage above and below
its break-even point, to prevent the provider from
experiencing excessive profits or catastrophic losses.
Source: Adapted from “Payment Reform: Bundled Episodes vs. Global
Payments: A debate between Francois de Brantes and Robert Berenson.”
Timely Analysis of Immediate Health Policy Issues, September 2012.
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9. HOW CAN ALTERNATIVE
PAYMENT METHODS
SUPPORT PREVENTIVE
CARE?
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10. Opportunity
Alternative payment methods:
•Aim to reward providers for outcomes rather
than volume of service provided
•Give providers flexibility to provide care that
best meets patients’ needs
•Support preventive care that is cost-neutral or
helps to contain total health care costs
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11. What is “cost-neutral”?
Hypothetical example:
Hospital discharge cost:
Emergency visit cost:
Preventive treatment:
$6,000.
$800.
$60.
$60 < $6,000.
$60 < $800.
Is that all you need to know?
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12. Example 1: Analysis
Hospital discharge
ED visit
Total
Number of
patients
50
400
Cost each
$6,000
$800
Savings if we prevent 60%
Preventive treatment
Total cost
$300,000
$320,000
$620,000
($372,000)
40,000
Net cost (savings) from
intervention
$60
$2,400,000
$2,028,000
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13. Example 2: Analysis
Hospital discharge
ED visit
Total
Number of
units
50
400
Cost each
$6,000
$800
Savings if we prevent 50%
Total cost
$300,000
$320,000
$620,000
($310,000)
Preventive treatment
500
Net cost (savings) from
intervention
$600
$300,000
($10,000)
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14. CASE STUDY:
MASSACHUSETTS
CHILDREN’S HIGH-RISK
ASTHMA BUNDLED PAYMENT
(CHABP) DEMONSTRATION
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15. Statutory Mandate – Key Provisions
FY11 Budget outside section (St. 2010, C.131, S.154)
•
Provides for EOHHS to develop a global or bundled payment
system for high-risk pediatric asthma patients enrolled in the
MassHealth program
•
Goal is to prevent unnecessary hospital admissions and emergency
room utilization.
•
The global or bundled payments are to reimburse expenses
necessary to manage pediatric asthma, including, but not limited to,
patient education, environmental assessments, mitigation of
asthma triggers and purchase of necessary durable medical
equipment.
•
The global or bundled payments shall be designed to ensure a
financial return on investment through the reduction of costs related
to hospital and emergency room visits and admissions
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16. Expenditure Authority
•
On December 20, 2011 CMS approved Massachusetts Medicaid’s
request to extend its 1115 Demonstration Waiver through June 30,
2014
•
Waiver allows MassHealth to make “Expenditures related to a pilot
program … focused on pediatric asthma that will provide a payment
such as a per member/per month (PMPM) payment to participating
providers for asthma-related services.”
•
“The pilot may include multiple phases and may include nontraditional services, supplies, and community supports for
environmental home mitigation associated with pediatric asthma.”
• “The authority for this pilot program to receive FFP is not
effective until CMS approval of the [required] protocols.”
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17. Goal and Objectives
• Goal: To evaluate the degree to which a bundled payment
and flexible use of funds enhances the effects of delivery
system transformation, as demonstrated by improved health
outcomes at the same or lower cost.
• Objectives:
• To develop a bundled payment system for MassHealth members to support
a comprehensive chronic disease management approach to asthma;
• To demonstrate whether a financial return on investment can be achieved
through the reduction of costs related to hospital admissions and
emergency department visits;
• To help pediatric providers begin developing the skills and infrastructure
that they will need to manage global payments; and
• To help children and their families learn practical and actionable methods
for managing asthma in the context of their lives and for optimally
controlling asthma symptoms to minimize asthma’s impact on their health,
well-being and quality of life.
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18. Patient Enrollment Criteria
Patients must meet all criteria to be enrolled in the CHABP:
1. Age 2-18 at CHABP Enrollment
2. Current MassHealth Member enrolled in PCC Panel and Participating
Practice site panel
3. Clinical diagnosis of Asthma
4. High-risk asthma: In 12 months prior to enrollment have at least one:
a. Inpatient admission for asthma,
b. Hospital observation stay for asthma,
c. Hospital emergency department visit for asthma, or
d. Oral systemic corticosteroid prescription for asthma
5. Poorly controlled asthma: Asthma Control Test (ACT) score of 19 or
lower twice within a 2 month period in 12 months prior to enrollment
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19. Payment
Bundled payment = $50.00 per member
per month
Adjusted in certain circumstances to avoid duplication
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20. Participating Practice Staffing
A Participating Practice must designate:
1. Financial/Operational Project Leader
2. Clinical Project Leader
3. Health care professionals to participate in Interdisciplinary
Care Team
4. Community Health Worker (CHW)
5. Clinical Supervisor for CHW
6. Care Coordinator: may be CHW, case manager or
clinician
7. Licensed Clinician to provide clinical care management
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21. Clinical Services
1. Traditional MassHealth Covered Services
•
Practice must continue to provide all medically necessary MassHealthcovered services to assess, monitor & manage asthma
•
Continue to bill as usual (mostly fee for service)
1. Required Services
•
At least once per month, review all CHABP Enrollees to identify need
for follow-up or review by Interdisciplinary Care Team
•
Make best effort to contact families at specified times to offer services
1. Optional Services
•
Practice shall prioritize use of CHABP funds to best meet CHABP
Enrollees’ needs. Services may include, but are not limited to:
• CHW home visits, environmental assessment, care coordination,
additional family contacts and assistance
• Environmental supplies to mitigate asthma: mattress & pillow
covers, vacuum, HEPA filter, pest management supplies, etc.
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22. Reporting & Communications
Participating Practices will:
• Participate in monthly Learning Collaboratives
• Submit Required Reports
1. Enrollment Report, monthly
2. Utilization Report, quarterly
• Maintain record of home visits, telephone contacts, inoffice education, and supplies provided
• Notify EOHHS of significant changes in the Practice
• Participate in Evaluation activities, including pre- and postintervention interviews
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23. Current Status
■ MassHealth issued a Request for Responses (RFR) to
procure pediatric practices to participate in the Pilot
■ Responses due June 7, 2013
■ Goal is to enroll 100-200 high-risk pediatric asthma
patients at 2-6 pediatric practice sites
■ Expect to generate savings by preventing expensive
inpatient hospitalizations and emergency department
visits
■ Positive return on investment expected within 3 years
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24. For more information
Katharine London
Principal Associate
Center for Health Law and Economics
University of Massachusetts Medical School
katharine.london@umassmed.edu
Detailed requirements for the Massachusetts Children’s
High-risk Asthma Bundled Payment demonstration are
available on the state procurement website,
www.Comm-PASS.com, under “closed procurements.”
Document number: 13LCEHSCHILDRENSHIGHRISKASTHMARFR
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