Veralon: Call Coverage for Employed vs. Independent Physicians

(The following is an excerpt from “Different Economics, Different Payment: Call Coverage Stipends for Employed vs. Independent Physicians,” Veralon INSIGHTS, September 2017. Dan Grauman, one of our expert presenters, is the Managing Director and CEO of Veralon Healthcare Management Advisors. For the full article, please see the link below.)

 

“Physician employment agreements now commonly include compensation for services beyond basic clinical services; they may also provide compensation for medical directorships, teaching, on-call payments, and so on. We have found that physicians transitioning to hospital employment are generally accepting of clinical compensation models that include a base salary coupled with productivity and quality incentives. However, they may not be as accepting of changes in compensation for emergency department (“ED”) call coverage, a highly sensitive component of physician employment arrangements . . .

 

“Putting aside federal and state regulations (Stark Law, Federal Anti-Kickback Statute, etc.), the economics themselves change fundamentally when an independent physician becomes a hospital employee . . . many physicians, need to be helped to understand this. These compensation changes were required to achieve a compensation package that meets Fair Market Value requirements.

 

“A valuator would explain the two key factors driving the difference in call coverage compensation between independent and hospital-employed physicians . . . “ (click here to read the full article and review the “valuator.”

 

 

A special thank you to Veralon for giving us permission to share this article with you.

 

 

 

Strategic Issues for Boards, iProtean’s latest advanced Mission & Strategy course, now appears in your library. It features speakers on cyber-security and the Medicare Access and CHIP Reauthorization Act of 2015—complex topics that stymie many of us! Martin Liutermoza, Global Head of Information Security at Nasdaq, discusses IT security and risk management as well preparing for and mitigating cyber attacks. Seth Edwards talks about MACRA and MIPS versus the Advanced Alternative Payment model.

 

 

For a complete list of iProtean courses, click here.

 

For more information about iProtean, click here.

Provider Organizations Should Assess Potential for Additional Revenue Under MIPS

Reporting and collecting data for 2017 for the Merit-based Incentive Payment System (MIPS) should be underway in provider organizations. But some may have decided to wait because of what they perceive as high administrative and labor costs. According to experts, these organizations “are well advised to take a closer look at the potential benefits and risks.” (“MIPS: Getting Ready for a New Paradigm in Pay for Performance,” hfm Early Edition, September 7, 2017)

 

MIPS is one of the payment tracks created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). (See Strategic Issues for Boards, iProtean, publication pending.) MIPS is in force now—2017 is the performance year. Its payment adjustments are applied to Medicare Part B payments two years after the performance year, so 2019 will be the first year of penalties/rewards.

 

Beginning this year, MIPS defines four categories of eligible clinician performance, contributing to a final score of up to 100 points.

 

  • Quality: 60 percent
  • Advancing care information (the renamed meaningful use): 25 percent
  • Clinical practice improvement activities: 15 percent
  • Resource use: 0 percent for 2017 (to be weighted for 2018 and beyond)

(“MIPS: Getting Ready for a New Paradigm in Pay for Performance,” hfm Early Edition, September 7, 2017)

 

Incentive payments are not the only area of impact resulting from participation in MIPS. CMS plans to publish annual final scores for each clinician, and consumers will be able to see their clinicians’ rated and compared to their peers.

 

Risk Versus Reward

 

MIPS can result in revenue if implemented appropriately. The outcome is highly dependent on:

 

  • Quality of the clinical documentation
  • Accurate capture of codes to identify the acuity of the patient’s condition
  • Services provided to the highest degree of specificity possible
  • Fastidious tracking of utilization and costs

 

To optimize success, healthcare organizations should find ways to break down departmental silos. This means that clinicians, clinical documentation improvement professionals, the coding team, health information management technology professionals and the billing support team work together, with the support of leadership, to take advantage of the opportunities MIPS provides.

 

MIPS eligibility requirements for participation include whether the provider organization bills more than $30,000 annually to Medicare, and whether care is delivered to more than 100 Medicare beneficiaries per year.

 

Gathering and reporting data for 2017 must begin before October 2, 2017 and the deadline for submission of data is March 31, 2018.

 

Provider organizations that don’t participate will face a penalty of 4 percent of baseline Medicare revenue. According to the authors of the hfm Early Edition report, “even reporting on one area can negate this adjustment.” They noted that “submitting 90 days of data can result in a neutral or slightly positive payment adjustment; a full year of data can result in a moderately positive payment adjustment.” (“MIPS: Getting Ready for a New Paradigm in Pay for Performance,” hfm Early Edition, September 7, 2017)

 

The size of the adjustment is dependent upon how much data is submitted and the organization’s performance on quality measures. “MIPS payment adjustment is based on evidence-based and practice-specific quality data. Just as the penalty for failure to participate is 4 percent, success on quality could lead to as much as a 4 percent increase in payment in the first year. The amount at stake will gradually rise to 9 percent in 2022 and beyond.” (“MIPS: Getting Ready for a New Paradigm in Pay for Performance,” hfm Early Edition, September 7, 2017)

 

 

 

 

Coming soon to your library: Strategic Issues for Boards featuring speakers on cyber-security and the Medicare Access and CHIP Reauthorization Act of 2015. Martin Liutermoza, Global Head of Information Security at Nasdaq, discusses IT security and risk management as well preparing for and mitigating cyber attacks. Seth Edwards talks about MACRA and MIPS versus the Advanced Alternative Payment model.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Board Assessment for Hospitals & Systems: A Necessary Tool for Performance Improvement

(Originally published in Nasdaq’s MarketInsite, July 18, 2017, and written on behalf of iProtean by Karma Bass, Principal, Via Healthcare Consulting)

 

“I don’t care about having a high-performing board.” It’s hard to imagine any CEO or board leader uttering these words in today’s rapidly changing healthcare industry. The stakes are just too high. Yet, by their failure to engage in regular board assessment, many hospital and health system leaders may inadvertently be conveying that message and putting the continued viability of their mission in jeopardy.

 

Think about it: ‘high-performing’ implies performance that’s been measured and proven to be outstanding. You can’t have a high-performing board if you aren’t measuring performance in some manner. For hospital and health system boards, however, measuring performance is tricky, for several reasons. First, and perhaps most daunting, there’s the issue of appropriateness. Should a board comprised of community volunteers really be graded on its performance? Second, there’s the issue of evaluation. Who should assess the board’s performance? Lastly, there’s the issue of metrics. By which measures will or should the board be evaluated?

 

First, let’s consider the issue of appropriateness. It’s true that most U.S. hospitals and health systems are not-for-profit organizations with boards comprised of community members who provide their service as unpaid volunteers. But while board members may be volunteers, healthcare is simply too complex and important an industry to be governed by amateurs. So, yes, it is appropriate. A board’s performance should be regularly assessed in order to exploit areas of strength and identify areas where improvements can and should be made. As I travel around the country working with hospital and system boards, I find that most board leaders are eager to know how they are performing and how they could get better. As noted by Byron Loflin, CEO for the Center for Board Excellence (CBE), “Thoughtful and hardworking board members have commented to me that mediocrity is never a solution.”

 

Next, there’s the question of who should assess the board’s performance. Since ultimately the task of improving the board’s performance (should it be warranted) will fall to the board members themselves, most organizations begin by having the board assess itself. This makes sense, also, because improving board performance is often an exercise in change management.

 

Step one of Dr. John Kotter’s well-regarded eight-step process from his book, Leading Change (Harvard Business School Press, 1996, updated 2012), for change management is “Create Urgency,” described as “help the team see the need for change…” It’s much easier to convince a group of people of the need for change if they themselves have identified the reasons for it. Also, because boards are usually volunteers, it’s more palatable to ask them to assess their own performance and identify areas for improvement. If our goal is to have the board be continually improving its performance, it makes sense to have them identify the areas for improvement, while drawing on outside expertise for guidance. As Loflin advises, “Board assessment or evaluations should be conducted by a third-party whose focus is corporate governance excellence.”

 

Back to the trickiness of assessing board performance. The last issue was the question of metrics. How do you choose which measures to use in evaluating a board’s performance – high or otherwise? Many fine organizations around the country specialize in promulgating ‘best’ practices for board performance and while many are helpful, all fall short of being universally relevant. The fact of the matter is that excellence in board performance remains more an art than a science.

 

Many boards and leadership use this as a reason to throw their hands up. “If I can’t know what the absolutely, in-all-cases, best board practices are to measure my board against, why should I bother measuring their performance at all?” I reject this defeatist notion and would suggest that each board should begin where it is. Start by identifying the major ‘buckets’ of board work, and ask board members how they believe they’re performing against them.

 

Regardless of a board’s current state, it is important for the board to hold itself to a set of rigorous standards. Some board practices and some boards’ performance are better than others; and it may take some work to determine which best practices it makes sense for your board to follow and which metrics you should use to assess performance. While the details may differ, what all high performing boards have in common is they make a substantial contribution to their hospital’s success.

 

According to Gordon Clark, president and CEO of iProtean, hospital or health system boards’ work generally falls into these four areas: Finance Oversight, Quality Oversight, Mission/Strategy, and Governance. iProtean’s approach to assessment begins with a survey that asks each board member to rate his or knowledge and comfort level with specific board oversight responsibilities within these key areas. The idea is to go beyond asking “how well” the board as a whole is performing in a given area (too often an overly subjective unit of measure) and instead identify where individual board members need more knowledge in order to be effective contributors. Taken in aggregate, the results also show where the board’s strengths and blind spots are. Knowing where the gaps are in board members’ understanding will help guide a robust education plan. It can also assist in developing an action plan for board improvement through which board members will be motivated to participate.

 

It (hopefully) goes without saying that having a ‘high-performing’ board – however one chooses to measure and define it – is more of a journey than a destination. The boards that are truly ‘high-performing’ credibly and constructively challenge their own performance. They are always seeking ways to enhance their effectiveness, gain mission alignment with management and improve their ability to govern. It starts and ends, if you will, with the assessment.

 

Nasdaq’s Board and Leadership Solutions have a unique collaboration with iProtean, an e-learning company that provides online governance education and information to hospital directors. Bringing over 50 years of combined experience in healthcare governance information and education, the iProtean leadership team understands the specific needs of hospital and health system board members. The company is committed to helping directors make a meaningful difference in their communities.

 

 

Nasdaq Corporate Solutions helps organizations manage and master the two-way flow of information with their audiences. Around the globe, market leaders rely upon our unmatched suite of advanced technology, analytics and consultative services to maximize the value of their work—from investor relations and corporate governance to public relations and communications.

 

 

 

Check your library for the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards. In this course, Marian and Seth discuss the financial risks of ACOs and bundled payments, the strategic risks of not participating in an alternative payment model, clear trends and the characteristics of organizations that have successfully implemented one or more alternative payment models.

 

Coming soon: Strategic Issues for Boards featuring speakers on cyber-security and the Medicare Access and CHIP Reauthorization Act of 2015.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

OIG Reports on ACO Cost Savings and Quality Gains

Over the first three years of the Medicare Shared Savings Program (2013-2015), 428 Accountable Care Organizations (ACOs) served 9.7 million beneficiaries. Most of these participating ACOs reduced Medicare spending compared to their benchmarks, resulting in a net spending reduction of nearly $1 billion, according to an August report from the Office of the Inspector General (OIG).

 

Under the Medicare Shared Savings Program, healthcare providers form ACOs and agree to be accountable for the total cost of care for assigned Medicare beneficiaries, with the potential to share in Medicare savings or losses. In the first three years of the program, ACOs reported data on 33 quality measures to CMS.

 

Some of the key findings in the study include:

  • One-third of ACOs reduced spending enough to receive a portion of the savings. These 154 ACOs earned $1.3 billion, roughly $4.8 million on average for every year they earned shared savings.
  • Of the $3.4 billion in reduced spending over the three years of the program, about half, or $1.7 billion, was generated by 36 ACOs.
  • ACOs participating in the program longer were more likely to reduce spending and by greater amounts than other ACOs, suggesting that more established ACOs are learning how to achieve greater cost savings over time.
  • ACOs generally improved the quality of care they provided, based on CMS data on quality measures.

 

With respect to quality, OIG found that:

  • ACOs improved their performance on 82 percent of the individual quality measures.
  • ACOs outperformed fee-for-service providers on 81 percent of the quality measures.

 

With respect to cost, OIG found that:

  • A small subset of ACOs showed substantial reductions in Medicare spending—an average of $673 per beneficiary for key Medicare services—while providing high quality care including inpatient hospital and skilled nursing facility care.
  • ACOs had a high use of primary care services, reducing utilization and costs of other care.
  • In contrast, fee-for-service providers experienced an increase in beneficiary spending for key Medicare services.

 

The report highlighted a number of features that set “high-performing” ACOs apart, including providing the highest number of primary care visits compared to other ACOs and serving a larger number of beneficiaries, many of whom had more health conditions and other risk factors associated with higher spending. High-performing ACOs also were more likely to include only physicians, OIG added.

 

In its summary, OIG noted that with any payment reform, it will take time for organizations to integrate changes into operations in order to improve quality and lower costs. “While policy changes may be warranted, ACOs show promise in reducing spending and improving quality.” It called for additional information about high-performing ACOs to help the future direction of the Shared Savings Program and other alternative payment models.

 

 

(Sources: “ACOs Show Promise in Generating Savings, Quality Gains for Medicare, OIG Says,” AHLA Weekly, September 1, 2017; OIG report “Medicare Shared Savings Program Accountable Care Organizations Have Shown Potential for Reducing Spending and Improving Quality,” August 2017. Read the full report here.)

 

 

 

 

Check your library for the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards. In this course, Marian and Seth discuss the financial risks of ACOs and bundled payments, the strategic risks of not participating in an alternative payment model, clear trends and the characteristics of organizations that have successfully implemented one or more alternative payment models.

 

Coming soon: Strategic Issues for Boards featuring speakers on cyber-security and the Medicare Access and CHIP Reauthorization Act of 2015.

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.