Presented by Marge Houy,

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• Creating a Successful PCMH Initiative

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What Does Being Successful Mean?

• Health care process and outcome quality measures
  improve
• Access to primary care services is improved
• Communication
• Appointments
• More efficient use of MDs time
• Patient self-management capabilities are improved
• Sufficient savings are generated to offset
  investments
• PCPs are more satisfied with their practices

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Topics

• Definition of PCMH
• Key Stakeholders
• Leadership
• Payment Reform
• Payment Models
• Payment Levels
• Sustainability
• Are PMCH Initiatives Successful?

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1. Key Elements that Define a PCMH

• Transformative for the Practice
• Population-based patient management
• Patient registry
• Planned visits
• Care plans
• Team-based care
• Clinical Care Management and Care Coordination

• Transformative for the Patient
• Self-management education
• Initial and on-going disease-specific education
• Self-management support
• Personal action planning goals
• Patient-centered care
• Increased access
• Needs assessment includes non-medical barriers to
  medical care

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Key Stakeholders Creating Buy-in and Momentum

• All major payers, including Medicaid
• Goal is to have at least 50 of practice revenue
  tied to initiative, including insured and
  self-insured plans
• CMS will be doing a demonstration project in
  which CMS will join state-based PCMH initiatives.
• Broad-based representation of primary care
  providers
• Local representatives of national physician and
  nurse practitioner associations
• State medical society
• Academic-, community-, and health center-based
  practicing physicians

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Stakeholders (continued)

• Large employers
• Very hard to engage
• Key when considering self-insured accounts
• State Government
• As payer
• As facilitator/convener
• As decision-maker
• Can provide some anti-trust protections when
  payment is discussed

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3. Leadership

• Stakeholder participation must come from their
  leadership
• Most important is high level leadership from the
  payers
• Individuals who are able to make financial and
  non-financial commitments
• Individuals who are viewed as opinion leaders by
  others
• If the state government is a stakeholder, support
  from the governors office and participation of a
  top agency leader is key
• Endorsements from local provider professional
  associations simplifies participant recruitment
  efforts.
• Recruiting a sufficiently large number of
  physicians to generate measurable results is
  vital

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Payment Reform as Part of a PCMH Initiative

• Infrastructure Support
• Additional resources required in practice setting
  to implement new model
• Time spent on traditionally non-billable
  activities (such as care team meetings), care
  management,
• Costs associated with HIT, space and equipment.
• Incentive Alignment to Support Transformation
• Motivate and support efficient and effective care
• Counter FFS incentives of volume, use of newest
  technology and practice isolation

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Financial Support

• No single best payment model
• No consensus on appropriate level of financial
  support
• Sense that payments must address both --
• Costs for infrastructure necessary for
  transformation
• On-going costs to maintain PCMH
• Disagreement on what on-going costs are, and for
  some, whether there even are additional costs to
  functioning as a PCMH

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4a. 10 Payment Models in Use

• 2 FFS models with adjustments
• FFS with discrete new codes usually for care
  management services
• BCBSMI
• Horizon BCBS of NJ
• Texas Medicaid
• FFS with higher payment levels
• BCBSVT pays enhanced EM consultations,
  preventive medicine and consulting codes to
  practices meeting payers Medical Home
  qualifications
• BCBSMI pays EM at 10 higher rates to practices
  meeting payers own criteria for Medical Home

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3 FFS Plus Models

• FFS with lump sum payments
• In 3 of 4 PA Chronic Care Initiative regions,
  practices receive payments based on documented
  level of NCQA PPC-PCMH achievement and size of
  practice
• FFS with PMPM payment
• Community Care of NC pays PMPM to PCPs and
  separately to regional PCP network for care
  management and Rx consultation (Medicaid program)
• Vermont insurers and Medicaid pay sliding scale
  PMPM based on achievement re NCQA PPC-PCMH
  standards
• RI insurers and Medicaid pay PMPM upon NCQA
  recognition
• Both VT and RI separately provide additional
  funding for care management either integrated
  into the practice or functioning regionally

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3 FFS Plus Models (continued)

• FFS with PMPM and P4P
• Model endorsed by PCPCC and physician
  professional organizations
• EmblemHealth and Colorado Multi-Payer Initiative
• THINC RHIO FFS with enhanced PMPM payment for
  achieving NCQA Level 2 and meeting performance
  standards for 10 HEDIS measures

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3 Shared Savings Models

• FFS with PMPY shared savings payment
• Bridges to Excellence medical home model
• Practices must be
• Level 2 certified for BTEs Physician Office
  Link, and
• Any two of Diabetes, Cardiac Care and Spine Care
  Link programs.
• Shared Savings 250/patient split between
  physician and purchaser/payer.
• 250 calculated to generate the best level of
  savings
• Paid annually

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3 Shared Savings Models (continued)

• FFS with lump sum payment, P4P and shared savings
• Lump sum forgivable loan if performance
  standards met on time
• Practices that meet quality metrics can qualify
  for 50/50 shared savings
• Formula roughly adjusts for case mix
• Compare total expected expenditures for total
  practice against actual costs
• Example Geisinger Health Plan (PA) also
  assigns its own salaried care managers to
  practices

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3 Shared Savings Models (continued)

• FFS with PMPY payments and shared savings
• Yr 1 made 20K per practice infrastructure
  investment
• Yr 2 built in savings prospectively -- informed
  by savings findings for Year 1 pilot. Settlement
  after end of year.
• Moved to PMPY payment at practice request, so no
  need to wait 18 months for payments.
• BCBS of ND found savings of 500 PMPY

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1 Comprehensive Payment Model

• Capital District Health Plan (NY) pilot started
  1/09
• Risk-adjusted PMPM covering ALL primary care
  services
• Unlike traditional primary care capitation,
  payments support investment in medical home
  systems to improve care
• 15-20 of annual payments are performance-based
  and paid as a bonus

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1 Grant-based Program

• Texas Medicaid Health Home Pilot Initiative
• Will pay quarterly grants to no more than 10
  pilot sites over 24-month pilot period
• Will cover all transformation costs based on
  budget approved by state agency
• Will continue to pay current FFS for medical care
  provided
• Pilot anticipated to start in April 2010.

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4b. Payment Levels State of Current
Knowledge

• Two possible types of incremental costs to
  operating as a PCMH
• one-time investment costs to adopt the model,
  including IT costs
• ongoing operational costs
• No current definitive answer to the question of
  what are the incremental costs to a primary care
  practice of operating as a PCMH.

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Reasons for Lack of Knowledge

• Varying operational definitions of PCMH,
• Varying emphasis on PCMH components
• Challenges distinguishing current reimbursed
  costs from non-reimbursed costs
• Challenges accounting for the substitution effect
  when a practice restructures its internal
  operations
• Lack of experience with PCMH, and correspondingly
  a lack of evaluative research
• Lack of case mix methodologies to account for
  differences across patient populations
• Lack of methodologies to account for economies of
  scale
• Variation in baseline practice resources

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PCMH Cost Estimates

• Three notable published estimates of the
  incremental costs for a primary care practice to
  operate as a PCMH
• Allan Goroll et. al. (2007)
• Deloitte Center for Health Solutions (2008)
• American Medical Associations Resource-based
  Relative Value Scale Update Committee (RUC) CMS
  (2008)
• Study funded by the Commonwealth Fund and the
  ACP, is being readied for release and is not yet
  public.
• Not everyone is convinced that a medical home
  requires added incremental costs. Ed Wagner has
  identified care management as the principal added
  expense.

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PCMH Cost Estimates
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PCMH Cost Estimates

• In other cases, those planning a PCMH initiative
  have developed their own estimates.

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PCMH Payment Amounts in Use in the U.S.
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PCMH Payment Amounts in Use in the U.S.
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PCMH Payment Amounts in Use in the U.S.
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Observations Regarding Payment Level

• There is no clarity on what added costs are
  required to operate as a medical home.
• What is in use represents what payers are willing
  to invest.
• To the extent there are costs, they should vary
  based on practice case mix, pre-existing
  resources, and practice size.

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5. Sustainability

• Payers are insisting on savings equal to at least
  the value of the supplemental payments
• Willing to make an investment based on soft
  business case
• Are looking for a positive ROI at the end of year
  2 of an initiative
• CMS requires that demonstrations must generate a
  savings for the Medicare trust funds and the
  federal government overall
• No one has taken on the issue of redistribution
  of payments among PCPs, specialists and hospitals

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6. Are PCMHs Successful?

• Have PCMHs Improved Quality?
• 12-months of quality data for Pennsylvanias
  Southeast regional rollouts suggest
• Mixed results on outcome measures for diabetics
• Solid improvement on process measures for
  diabetics and pediatric asthmatics
• Solid improvement in selected self-management
  skill development
• SEPA Rollout Populations
• 10,000 diabetes patients in 25 practices
• 5,000 pediatric asthma patients in 8 practices

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Diabetes Outcome Measures
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Diabetes Process Measures
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Have PCMHs Improved Self-Management ?

• Self-management skill improvement is starting to
  happen
• PA data indicates that self-management activities
  of setting goals and having action plans is
  improving
• Access to on-going educational support (e.g.,
  Certified Diabetes Educators) remains spotty.
• State is exploring becoming an ADA-approved
  program, enabling CDEs to provide services
  throughout the state
• Access to peer support programs that teach
  self-management skills is very limited

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Are PCMHs Sustainable?

• Anecdotal evidence in the SEPA region is
  suggesting that cost savings are being realized
• A Medicaid MCO did an internal study that
  reported a substantial reduction in ER and
  inpatient use by its adult diabetic and pediatric
  asthmatic patients who were part of a PCMH
• Early indications from a commercial insurer
  indicates similar trends

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Are PCMHs Providers Happier?

• Physicians participating in the SEPA rollout were
  recently surveyed about their experiences in the
  PA Chronic Care Initiative
• The next slides report their responses to
  questions regarding their views on the success of
  the Initiative and their levels of satisfaction

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Concluding Thoughts

• As shown in earlier slides, there is some early
  evidence documenting successes
• Not all PCMH Initiatives are as successful as
  others
• Key elements for a successful initiative appear
  to be
• Participating payers that represent at least 50
  of practice revenue
• Strong practice transformation support through
  Learning Collaboratives and Practice Coaches with
  a particular focus on care coordination and
  population management
• Payment reform that funds and provides incentives
  for practice transformation
• The CMS demonstration project will provide an
  important opportunity to expand the scope of the
  involved patient population