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CMS demonstration project offers potential new collaboration model
Hospitals, physicians will work together to improve efficiency, quality
The Centers for Medicare & Medicaid Services (CMS) may be giving hospital quality managers and other leaders a glimpse of the future with its new Acute Care Episode (ACE) demonstration, which it "expects to demonstrate how to better coordinate inpatient care and achieve savings in the delivery of that care that can ultimately be shared between hospitals, physicians, beneficiaries, and Medicare," according to CMS acting administrator Kerry Weems. CMS has just revealed the site selections for the initiative, which was slated to launch in March 2009.
The sites are: Baptist Health System, San Antonio; Oklahoma Heart Hospital LLC, Oklahoma City; Exempla Saint Joseph Hospital, Denver; Hillcrest Medical Center, Tulsa, OK; and Lovelace Health System, Albuquerque, NM.
The hospital-based demonstration, another of CMS' value-based purchasing approaches, will test the use of a bundled payment for both hospital and physician services for a designated group of inpatient episodes of care. "Too often, there are missed opportunities to coordinate care, which can adversely impact Medicare beneficiaries' health. This important demonstration brings hospitals, physicians, and patients together in an innovative cooperative effort to improve the quality of care," said Weems upon announcing the initiative.
ACE will seek to better align the incentives for both hospitals and physicians, leading to better quality and greater efficiency in the care that is delivered. It also will test the effect that transparent price and quality information has on beneficiary choice for select inpatient care.
For purposes of this demonstration, a bundled payment is a single payment for both Part A and Part B Medicare services furnished during an inpatient stay. Currently, CMS generally pays the hospital a single prospectively determined amount under the Inpatient Prospective Payment System (IPPS) for all the care it furnishes to the patient during an inpatient stay. The physicians who care for the patient during the stay are paid separately under the Medicare Physician Fee Schedule for each service they perform.
CMS has included 28 cardiac and nine orthopedic inpatient surgical services and procedures in the bundled payment demonstration, stating that that were selected because volume has historically been high; there is sufficient marketplace competition to ensure interested demonstration applicants; the services are easy to specify; and quality metrics are available for them.
"I think it's terrific," says Janelle Raborn, chief operating officer for Lovelace Women's Hospital. "It brings alignment between all the parties; it's a new approach from CMS that practitioners find intriguing."
How demonstration will work
Shannon Fiser, MACC, vice president of financial operations for Ardent Health Services, the parent company of Hillcrest, explains how ACE will work. "We will submit our normal claim for Part A services to CMS, and any physician who participates in the project agrees to accept payment from our organization," he explains. "But once we submit the Part A claim, it triggers CMS to pay our bundled rate, and it will be the hospital's responsibility to reimburse the physicians for their professional service."
Typically, he continues, the hospital can only bill and collect for the services rendered in the hospital, and the doctor has the responsibility to bill and collect for his or her professional services. "The intent of the project is to foster collaboration between the doctors and the hospitals to create more efficient delivery of care while at the same time monitoring the effect on quality," says Fiser.
"The opportunity in this collaborative model, for example, is that you can sit down with the doctors, scan the site with them, and talk about the products they use in their care," adds Steve Dobbs, CEO of Hillcrest Medical Center. In addition, he says, this model allows for gainsharing incentives for the physicians based on improved efficiencies.
"The doctor can earn up to 125% of the Medicare fee schedule based on savings," says Dobbs, adding that CMS must be informed of the specific gainsharing structures.
Savings, he continues, can be realized in "anything we can come to agreement on, like are we going to buy one implant from one particular vendor so we use all the same implants, and agree to push volume to a specific vendor and get favorable rates?"
How did the physicians react to this model? "We got total support from doctors here in Oklahoma," he says.
Coordination and consistency
When implementing the demonstration across an entire system, coordination is critical, says Raborn. "We worked on that from the 'get-go' — from the application phase," she says. "Each one of the hospitals has unique nuances, but there are some things we do as a division that are similar. This took at lot of coordination and communicating with one another."
"We wanted to create an environment where the physicians were able to choose which hospitals they wanted to use for these procedures but still be part of the program, so we set it up so they could practice where they had been practicing or where they would feel comfortable moving between facilities," adds Fiser.
Despite the uniqueness of the different hospitals, for the sake of quality "one of the things we wanted to do was have consistency, because we certainly wanted to have similar quality outcomes," notes Raborn.
"Our goal is to prevent readmissions and returns to our ORs," she continues. "But within those goals, practitioners may have different perspectives on how they can best achieve that — and it may be specific at each site. That gives us the opportunity to apply best practices across the board but allow nuances to be recognized."
How does that play out? "For example, at our women's hospital we initiated a 'pre-hab' program for joint replacement patients," Raborn explains. "Before the procedure, the patient comes to the hospital and sees the physical therapist and case manager. They review the course of care and receive education designed to produce good outcomes."
This is offered to all the "orthopods" who practice there, says Raborn, and they all like the concept and see the benefits. "But they have specific things the want to do, so the teaching sheets may vary." The plan is to roll this program out at each of the system's acute care hospitals. "Women's had done it as a trial program and it proved to be beneficial," she reports.
Raborn says she agrees with the concept of aligning incentives for quality and efficient care. "The communication we have with our practitioners is very much focused on that," she says. "Sometimes CMS may have an initiative that is focused on hospitals and others on practitioners, but this is one CMS program that says to both parties that patients reap big benefits from having the hospital and practitioners aligned under a single approach. That tweaks the interest of the practitioner and gives us the opportunity to have conversations with them about quality and have it aligned in philosophy with CMS."
CMS will be watching
The hospitals and CMS will maintain regular communication during the three-year demonstration, Dobbs explains. "As part of this project, we will focus on the collaborative model with physician order sets and measure outcomes, and CMS has the right to come in at any time and stop the program if it is not collaborative and/or has not demonstrated quality outcomes," he says, adding that "we continue to learn about the program." (This article was written prior to the formal launch, and participating facilities were given only two months between being notified they were selected and the formal launch of ACE.)
For example, he says, there is a third component that allows hospitals to incentivize patients to receive services at a specific facility. "Here we have had co-insurance and co-pays up to the Part B premium," Raborn explains, "But the patients can get a refund back from CMS; CMS will share half the savings with the beneficiary up to the Part B payment — around $1,100 a year."
"This way, all three parties come together to demonstrate the focus on the patient so that hopefully it will cause CMS to choose us as a value-based provider," says Dobbs. "Then, subject to CMS approval, we can promote that through advertising."
Before the formal launch, says Fiser, the system will be creating infrastructures to pay physician claims, record quality outcomes, and show what it is accomplishing in real-time — and reporting data back to CMS in a quarterly summary report. "There will also be a comprehensive wrap-up report at the end of three years," he adds.
"We're very excited about the potential from the project," he continues. "Any time you are aligning the goals of the physician and the hospital, hopefully this will lead to more efficiency — and quality metrics should improve."
So could this be the wave of the future? "CMS chose a demonstration project in just four states to pilot ACE," Dobbs notes. "I think in the future they may take this to other cities later on and based on how that goes make their decision."
[For more information, contact:
Steve Dobbs, CEO, Hillcrest Medical Center, 1120 South Utica, Tulsa, OK 74104. Phone: (918) 579-1000.
Shannon Fiser, MACC, Vice President of Financial Operations, Ardent Health Services. One Burton Hills Boulevard, Suite 250, Nashville, TN 37215. Phone: (615) 296-3000
Janelle Raborn, Chief Operating Officer, Lovelace Women's Hospital, 4701 Montgomery Boulevard, NE, Albuquerque, NM 87109. Phone: (505) 727-7800.]