Identify patient-focused episodes using a clinical model that categorizes episodes of care to reflect a patient’s total burden of illness and comorbidities, not merely the presence of a single diagnosis.
3M PFEs are a categorical, clinical model that defines episodes of care to reflect a patient’s total burden of illness and comorbidities, not merely the presence of a single disease. 3M PFEs simultaneously quantify the patient’s acute and post-acute resource needs, taking into account both the immediate need for care and baseline health status. The methodology was designed for payment, utilization analysis and clinical insight.
3M PFEs are most attractive to organizations interested in improving systemwide healthcare performance, provider profiling and payment reform. Examples include payers, large integrated delivery systems, accountable care organizations, risk-bearing provider organizations, government agencies, employers and research groups.
3M PFEs are designed both for analysis and for creating a bundled, incentive-based payment method. Because the 3M PFE-based payment method includes risk adjustment, it can reward provider collaboration and efficiency without requiring providers to accept insurance risk for the incidence of illness and injury. Many payers, led by Medicare, look to episodes and other alternative payment methods to reduce waste, increase coordination and improve outcomes.
Here are a few examples of the value 3M PFEs can bring to customers:
3M PFE classification logic is the same for every licensee, although different organizations may use different configurations. At this time, Solventum does not offer software that replicates the PFE analysis used by specific organizations.
3M PFEs use 3M APR DRGs as triggers for inpatient event episodes, 3M EAPGs as triggers for outpatient event episodes and 3M CRGs both to identify cohort episodes and risk adjust all episodes for baseline health status. Readmissions are evaluated using the 3M™ Potentially Preventable Readmissions (PPR) Grouping Software. Licensees already familiar with Solventum patient classification methodologies will easily recognize and understand many 3M PFE concepts.
3M PFEs are available in the following Solventum products:
Available to licensees on the Solventum customer support website:
All data required to assign a 3M PFE are routinely collected from institutional and professional claims, including the UB-04 and CMS-1500 paper forms and their corresponding X12N 837 electronic formats. Pharmacy data in NCPDP format are optional but recommended. Consistent, unique patient identifiers are essential. These requirements are the same as those for the 3M CRGs.
3M PFE analysis typically involves creation of a static data set comprising at least one full year of data. Two years of data allow a full year of data to establish baseline health status by 3M CRG before a one-year episode analysis window. Some users perform rolling analyses each month or each quarter. The 3M PFEs do not need to be built into a claim-processing system.
Development
In the 1980s and 1990s, the success of the Centers for Medicare & Medicaid Services (CMS) diagnosis related groups (DRGs) for hospital inpatient care prompted widespread interest in developing similar models for other applications. Since CMS DRGs define an episode as a single hospital stay, the obvious extension was to define broader episodes. For example, an episode might also include the cost of physician services and post-acute services such as rehabilitation.
Solventum, as the contractor to CMS for Medicare DRGs, was well-positioned to develop such models. Under contract to CMS and the Medicare Payment Advisory Commission (MedPAC), Solventum prepared analyses of episodes built around Medicare DRGs that were published in 2013 in the Medicare and Medicaid Research Review¹ and in a MedPAC Report to Congress.²
In parallel to its work developing episodes around Medicare DRGs, Solventum also developed the more comprehensive, proprietary 3M PFEs. 3M PFEs are appropriate for all populations, include both inpatient and ambulatory care and incorporate risk adjustment for baseline health status.
Design principles
These four principles guide the 3M PFE design:
Structure
For profiling comparisons or establishing payment levels, users of an episode methodology must calculate both actual and expected resource use by episode. In setting up a 3M PFE analysis, users have broad flexibility in defining the time windows for episode identification and the 3M CRG assignment, determining which services are included and excluded and defining the readmission logic.
3M PFE software performs two basic functions:
The actual expenditures that output from the accumulator can be used to compare against expected expenditures derived from relative weights.
The 3M PFE clinical logic is maintained by a team of clinicians, data analysts, clinical analysts, programmers and economists. The logic is proprietary to Solventum but is available for licensees to view in the online 3M PFE definitions manual. The methodology is updated annually to reflect changes in the standard diagnosis and procedure code sets and is regularly enhanced to improve the clinical logic.
Examples of 3M PFEs
Event-based episodes:
Cohort episodes:
¹Vertrees J, Averill R, Eisenhandler, J, Quain, A, Switalski J. Bundling Post-Acute Care Services into MS-DRG Payments. Medicare Medicaid Res Rev. 2013;3(3):E1-E19
²Medicare Payment Advisory Commission. Approaches to bundling payment for post-acute care. Chapter 3 in Report to the Congress: Medicare and the Health Care System. Washington, DC: MedPAC, June 2013.