Skilled Nursing Facility ValueBased Purchasing Greater Los Angeles

Skilled Nursing Facility Value-Based Purchasing Greater Los Angeles Care Coordination Learning and Action Network Lindsay Holland, MHA, Director, Care Transitions Health Services Advisory Group (HSAG) July 14, 2017

Objectives • Describe the skilled nursing facility (SNF) Value-Based Purchasing (VBP) Program • Compare the hospital and skilled nursing facility readmission penalties • Identify how the penalty impacts your facility 2

Hospital Readmission Penalties Section 3025 Affordable Care Act of 2010 • 2017: 139 California hospitals were penalized ALL 5 years for excess readmissions – Congestive heart failure – Coronary artery bypass graft – Acute myocardial infarction – Pneumonia – Chronic obstructive pulmonary disease – Total knee and hip arthroplasty 3

Nursing Home Readmission VBP Program H. R. 4302 Protecting Access to Medicare Act of 2014 • October 2017 – Readmission rates go public on Nursing Home Compare • October 2018 – VBP program for nursing homes begins 4

SNF Readmission Penalty Timeline 2014 Passed 2014 Oct. 2015 All-cause readmission measure defined 5 Oct. 2018 Incentive/ penalty goes live Oct. 2016 “Potentially preventable” adjusted rate Oct. 2016 Oct. 2017 Public reporting of SNF readmissions 40% of SNFs nationally will receive a penalty $2 B Savings/ 10 years October 2018 Oct. 2018 2% withhold of SNF payments begin 50– 70% of the withhold will go to incentive payments to SNFs 30– 50% of the withhold will go to Medicare for savings https: //www. cms. gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP. html

Nursing Home Readmission VBP Program Reduction amount: 2% – Lowest performers may lose 2% of Medicare funding Program is designed to save money for CMS* – Top performers’ incentive payments 50– 70% of the reduction amount (1. 0– 1. 4%) 40% SNFs will be ranked – Bottom 40% will be in the penalty-eligible range CMS provides reports on the measure – So SNFs can review and plan for action – Began 10/1/2016 6 *Centers for Medicare & Medicaid Services

Nursing Home Readmission VBP Program (cont. ) One measure: an all-condition, risk-adjusted, potentially avoidable hospital readmission rate • Payment differentials begin fiscal year (FY) 2019. – Payments on or after 10/1/2018 • Calculation of VBP amount will use the “achievement/improvement” methodology used for hospital VBP. – Rates will be compared to thresholds and benchmarks – SNFs will be awarded points for either achievement or improvement, whichever is higher 7

30 -Day All-Cause SNF Readmission Measure (SNF-RM) FY 2016 SNF Prospective Payment System (PPS) final rule, CMS adopted the SNF-RM as the first measure for the SNF VBP Program. • The measure is the risk-standardized rate of all-cause, unplanned hospital readmissions of Medicare beneficiaries within 30 days of discharge from their prior hospitalization. • Hospital readmissions are identified through Medicare hospital claims (not SNF claims). • Readmission data are not collected from SNFs and there are no additional reporting requirements for the measure. 8

30 -Day All-Cause SNF-RM (cont. ) • Readmissions to a hospital within the 30 -day window are counted if: – The beneficiary is readmitted directly from the SNF, or – After discharge from the SNF • As long as the beneficiary was admitted to the SNF within 1 day of discharge from a hospital stay • Excludes planned readmissions • Is risk-adjusted based on: – – 9 Patient demographics Principal diagnosis from the prior hospitalization Comorbidities Other health status variables that affect probability of readmission

30 -Day SNF Potentially Preventable Readmission (SNF-PPR) Measure July 29, 2016, CMS adopted the SNF-PPR measure for future use in the SNF VBP Program • The SNF-PPR measure assesses: – Risk-standardized rate of unplanned, potentially preventable readmissions – Medicare FFS SNF patients – Within 30 days of discharge from a prior hospitalization 10

30 -Day SNF-PPR Measure (cont. ) • The key difference between the SNF-RM and SNF-PPR measures: SNF-RM All-Cause Readmissions SNF-PPR Potentially Preventable Readmissions • CMS will replace the SNF-RM with the SNF-PPR “as soon as practicable. ” 11

Performance Scoring CMS has adopted these scoring methodologies to measure SNF performance that include levels of achievement and improvement: • Achievement scoring – Compares an individual SNF’s performance rate in a performance period against all SNFs’ performance during the baseline period • Improvement scoring – Compares a SNF’s performance during the performance period against its own prior performance during the baseline period 12

Definitions for SNF VBP Program Term Achievement Threshold Proposed Definition The 25 th percentile of national SNF performance on the quality measure during calendar year (CY) 2015 Benchmark Improvement Threshold The mean of the best decile of national SNF performance on the quality measure during CY 2015 The specific SNF’s performance on the measure Performance Period Baseline Period CY 2017 CY 2015 13

Performance Standards Like mortality rates, the lower the readmissions rate, the better. As with the Hospital VBP Program, mortality rates are inverted to a “survivability” rate so that higher is better (1 – mortality rate). Since a lower readmissions rate is better, every SNF’s readmissions rate is inverted using (1 – readmissions rate) for the purposes of the performance standards (i. e. , benchmark and threshold) and performance scoring. Standard 25 th Percentile Threshold Mean of the Best Decile 2013 20. 8% 79. 2% 16. 76% 2014 20. 54% 79. 46% 16. 6% 2015 20. 41% 79. 59% 16. 4% Benchmark 83. 24% 83. 6% 14

Calculating SNF Performance for SNF VBP • Performance scores will be calculated under the SNF VBP Program by first inverting SNF-RM rates using the following calculation: • SNF-RM Inverted Rate = 1 – Facility’s SNF-RM Rate • Example: SNF readmissions rate of 20. 449% • SNF-RM Inverted Rate = 1 – 0. 20449 • SNF-RM Inverted Rate = 0. 79551 15

SNF VBP Scoring Methodology Achievement Scoring Achievement Score: For FY 2019, points awarded by comparing the facility’s rate during the performance period (CY 2017) with the performance of all facilities nationally during the baseline period (CY 2015) CY 2015 CY 2017 Baseline Period Performance Period Time 100 Rate better or equal points to benchmark 16 0 Rate worse than points achievement threshold 1– 99 Rate between the two points (formula in final rule) https: //www. cms. gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP. html

SNF VBP Scoring Methodology Improvement Scoring Improvement Score: Points awarded by comparing the facility’s rate during the performance period (CY 2017) with its previous performance during the baseline period (CY 2015) CY 2015 CY 2017 Baseline Period Performance Period Me! Time 1– 89 Awarded according to the formula points described in the final rule 17 https: //www. cms. gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Other-VBPs/SNF-VBP. html

Accessing Your SNF VBP Report CMS QIES* Systems Welcome Page 18 *Quality Improvement and Evaluation System (QIES)

CASPER* Login Page 19 *Certification and Survey Provider Enhanced Reports

CASPER Topics Page 20

CASPER Reports Page 21

Additional Information • For more information about the SNF VBP Program: – https: //www. cms. gov/Medicare/Quality-Initiatives. Patient-Assessment-Instruments/Value-Based. Programs/Other-VBPs/SNF-VBP. html – Refer to: FY 2016 SNF-PPS final rule and FY 2017 SNF-PPS final rule • For additional questions, email: SNFVBPinquiries@cms. hhs. gov 22

Thank you! Lindsay Holland Director, Care Transistions, HSAG Lholland@hsag. com

This material was prepared by Health Services Advisory Group, the Medicare Quality Improvement Organization for California, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U. S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Publication No. CA-11 SOW-C. 3 -07132017 -01