Welcome to TIM Talks: Business Acumen

“Community Based Organizations (CBOs) Developing 

Meaningful Partnerships with Hospitals”

September 27, 2016
Developing Meaningful 

Partnerships with Hospitals

Timothy P. McNeill, RN, MPH

Healthcare Consultant
Hospitals & Payment Reform

Sample Business Case

Steps to Hospital Contracting

Questions

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Hospitals and the Risk Continuum

• Hospitals and Providers will be participating in more riskbased contract models / Alternative Payment Models

• As providers take on more risk, the more likely they are 

to engage in a different care delivery model

• Success with APMs will require a redesign of standard 

care

– There will be a shifting towards the greater utilization of home 

and community-based services

– Prevention of disease and disease-complications are increasingly 

important
Strategy: Community Integrated Health (CIH)

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• Meaningful partnerships with hospitals require the CBO to 

clearly define their role in an overall Community Integrated 

Health Strategy

• Assess the impact of market changes on the hospital and 

incorporate key items into your CIH strategy

– August 2016 Report provides key information about the 

challenges and needs of hospitals.

– Use the report along with market data to develop your strategy 

for establishing your hospital partnership
Evaluation of Bundled Payment Programs

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• Publicly available market research

• CMS Bundled Payment for Care Improvement (BPCI) 

Initiative Models 2 – 4: Year 2 Evaluation & Monitoring 

Annual Report

• Released August 2016

• Available for download:

– https://innovation.cms.gov/Files/reports/bpci-models2-4-

yr2evalrpt.pdf
Bundled Payment for Care Improvement 

(BPCI) Initiative

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• Initiative designed to test linking payments for all providers 

in an episode of care (generally 90 days after admission)

• Voluntary for hospitals to participate

• Program began October 2013

• Model 2

– Includes a triggering hospital stay

– Individual providers are paid on a fee-for-service basis

– Total episode payments are reconciled retrospectively against 

the target price 
Key Takeaways from Evaluation Report

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• 130 participating hospitals

• 60,000 episodes of care

– Primary episode major joint replacement of the lower 

extremity

– Congestive Heart Failure

– COPD

– Pneumonia

• Largest savings occurred in joint replacement episodes

– $864 (3%) reduction in total episode costs

– Few achieved savings for cardiac care models
Challenges for Hospitals

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• Success requires a targeted strategy to reduce OR eliminate 

Institutional Post-Acute Care

– Almost all savings attributed to reducing institutional PAC

• No Model 2 participants used the telehealth or home visit 

waivers

• No statistically significant difference in readmission rates 

and ED visits within 90 days of hospitalization

• Managing patient expectations related to PAC use

• Challenges with establishing relationships with PAC 

providers
Discussion Topics

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• Few BPCI participants reported that they actively managed 

the care for patients after the PAC decision (HH vs SNF)

• Savings was all created by shifting from Institutional PAC 

and expanding Home Health 

• BPCI success requires limiting SNF use

– SNF loss of revenue is contrary to the initiative goals
Steps to hospital contracting

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• Study your customer

• Identify potential points of pain

• Develop a pitch that outlines how your services can impact 

their point of pain

• Brand your intervention (ex. Community Integrated Health 

transition program)

• Outline the ROI for your intervention (Price vs Benefit)

• Practice your pitch

• Meet with hospital decision makers / stakeholders
Step 1: Study Your Customer

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• Assess hospital participation in Alternative Payment Models

– ACOs

– Bundled Payment for Care Improvement

– CJR

– 2017 – SHFFT, Cardiac Care, Oncology Care 

• Value-Based Payment Programs

– MACRA

– Physician Value-Based Payment Modifier

– Length of Stay / Readmissions

• Community Needs Assessment
Step 2: Identify Potential Point(s) of Pain

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• Determine how your services align with their potential 

needs

• Need to Reduce Institutional PAC

– HCBS

– Duals (Waiver, MLTSS, etc.)

• Experience with high-risk populations

• Ability to provide evidence-based interventions

– Diabetes Self-Management Training 

– Fall Prevention

– Depression Risk Interventions (PEARLS)
Step 3: Develop Your Pitch

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• Community Integrated Health Strategy

• Targeted Services

• Target Population / Geographic area

• Capacity

• Price 

• Incorporation of the intervention in the reimbursement 

model (budget neutral)

• Documentation

– Shared Care Plan

– Outcome Reporting
Step 3: Develop Your Pitch (cont.)

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• Presentation

– About Us

– Need

– Why we are best to meet the need

– How we will meet the need

– Cost / ROI

– Next Steps
Step 4: Brand Your Intervention

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• Who will provide the intervention?

– One agency

– Lead agency

– New organization formed by a group of collaborating 

providers

• Name the intervention 

• Develop a presentation and baseline proposal

– Example: Community Integrated Health Transition 

Program
Step 5: Outline the ROI 

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• What is the price?

• What is the financial benefit as compared to the price?

• Can the intervention be incorporated into the reimbursement 

model and be budget neutral?

– TCM

– CCM

– Behavioral Health Integration (BHI)

• How will the intervention address the potential hospital 

points of pain?
Step 6: Practice Your Pitch

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• Meet with key stakeholders and practice your pitch

– Case Managers

– Community Referral Sources

– Board Members

– PAC providers

– Community members that have used hospital services
Step 7: Meet with Key Decision Makers

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• Identify hospital decision makers

– CEO

– CFO

– Population Health Director/Manager

– Director of Case Management

• Schedule a meeting to make a presentation

– You may have to make multiple presentations as you move up 

the hospital chain of command
Step 7 Continued

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• Be prepared to make an oral presentation and leave a 

written proposal

• Discuss next steps at the end of your presentation

– Pilot test the model

• Define the purpose of the pilot

• Purpose should not be to prove the effectiveness of the 

intervention

• Target population / geography

• Explicitly outline that the intervention has a cost

– Why buy the cow if you can get the milk for free?
Case Study

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• AAA wishes to work with local hospital

• Hospital in various APMs

– ACO

– Bundled Payment

• Market has MLTSS / Waiver services

– Potential for expanded HCBS for Duals
Alignment with Physician Transitional Care Management 

(TCM) / Chronic Care Management (CCM)

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• We acknowledge that other Part B providers are attempting to 

deliver TCM and CCM

– CMS notes that 2/3 of the total Medicare population would be 

eligible for CCM

• Total Medicare Population = 55M

• Eligible for CCM: 36M

– From Jan, 2015 – May 2016: Total # of beneficiaries receiving 

CCM nationwide – 275,000 (although 36M were eligible)

– TCM has had an even smaller impact on outcomes due to low 

utilization

• Community-Integrated Health strategy is to target hard-toreach populations that are not currently served by provider / 

hospital care management programs in the community
Barriers to TCM/CCM Physician Model

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• Transitional Care Management

– Initial Contact within 48 hours of discharge

– Service CANNOT be billed by Hospitalist or Part A Hospital

– Face-to-Face within 7 – 14 days of hospital discharge

– Co-Insurance requirement

– Development and sharing of a care plan with the entire care team

• PCP

• Specialists

• Hospital/Hospitalists

• Chronic Care Management

– Must make direct contact with beneficiary every month

– Service CANNOT be billed by a home health agency

– Co-Insurance requirement

– Development and sharing of a care plan with the entire care team
Home Health in Bundled Payment

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• 100% of the costs of Home Health attribute to the bundled 

payment episode payment (90 days)

• Home Health is reimbursed on a DRG-based prospective 

payment system

– CY 2016 National standardized 60-day episode payment = $2,938.37

• Home Health 60-Day DRG Payment ($2,938.37) services

– Most consumers have an initial assessment followed by limited home 

health aide services

– Services conclude in 60-days or less, while the bundled payment episode 

extends for 90 days

– Full DRG-based payment attributed to bundled payment expense
Business Case

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• CBO Intervention + Home Health will provide a lower cost 

alternative to institutional PAC

• Home Health DRG Payment: $2,938.37 for a 60-day episode

• TCM / CCM Reimbursement

– Avg. TCM rate = $275.00

– Avg. CCM rate = $46.00 / mo.

– Total for 90 days = $367.00

• Avg. Medicare payment for SNF episode of care 

– $12,239

• Avg. Medicare daily rate for SNF care 

– $492/day
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Bundled Payment Home Visit Waiver

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• Home Visit Waiver

– HCPCS G-Code for Post-Discharge Home Visit – G9490

– CJR allows for reimbursement for up to nine (9) postdischarge home visits

• Performed by a RN or LPN in the home

• G9490 Avg. Reimbursement = $84

• Less than 20% of the impacted population receives this benefit

• Available when HH benefit expires 

• Two home visits = $168 

– HH DRG payment covers RN/LPN assessment, home 

health aide services and medical social work
Bundled Payment Tele-Health Waiver

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• Bundled Payment has a Tele-Health Geographic Waiver

– Billable Medicare encounter can occur in the home or place 

of residence, of the consumer, as the originating site

– Higher rates require an auxiliary person in the home

– CBO Health Coaches can facilitate a tele-health encounter 

with the physician in bundled payment 

– Physician bills for outpatient tele-health encounter

– CBO costs off-set by TCM / CCM

– Increases outpatient encounters at a significantly reduced 

cost as compared to other post-acute care alternatives
Total Cost Comparison for Bundled 

Payment Episode

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• Home Health DRG-Based Payment = $2,937.37

• Budget Neutral CIH Intervention

• Avg. SNF Medicare Payment = $12,239

• CIH + Home Health Savings to the Bundled Payment 

Participant vs SNF placement for rehab

– $12,239.00 (SNF) - $3,304.37 = $8,934.63
Multi-Payer Strategy

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• TCM / CCM are both Medicare Part B benefits

• TCM / CCM are mandatory benefits of every Medicare 

Advantage plan. 

• Multi-Payer Strategy

– Provide targeted TCM along with community-based chronic care 

management (CCM) services for community-dwelling Medicare 

beneficiaries

– Expand care transitions services to Medicare Advantage and Special 

Needs Plans (SNPs)

• TCM / CCM for MA population

– Contract with Medicaid RCOs and Health Homes to provide care 

transitions and chronic care management services for Medicaid 

• TCM / CCM for Medicaid only population
Questions

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