Bob%20Doherty

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Designing new payment models for Medical Care
Version 2009 (PCMH) Presentation toThe
Medical Home Summit

• Bob Doherty
• Senior Vice President, Governmental Affairs and
  Public Policy
• American College of Physicians
• March 3, 2009

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Traditional FFS Medical Care Version 1965

• Based on the way that care was provided 40 years
  agonot way it delivered today
• patients treated only when sick (acute condition)
• little or no emphasis on prevention and
  coordination
• care based on doctors best judgment as informed
  by CME and journals but not on evidence-based
  guidelines
• specific visit or procedure code
• individuals not teams
• usual, customary, reasonable (UCR)

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RBRVS-FFSMedical care Version 1989

• Same as 1965 version but
• Instead of UCR, based on RBRVS
• Relative values based on time, mental and
  physical effort, and iatrogenic risk
• Initial pay shift to primary care, eroded over
  time

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Traditional capitationMedical Care Version
1995

• Per patient per month
• Not risk-adjusted
• Transfer of insurance risk to physicians
• Incentive do as little as possible, for as few
  as possible keep people out of the office dont
  take on higher risk/higher use patients

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Wanted! New pay models forMedical Care Version
2009

• Medical care today
• prevention/management of illness rather than just
  treating disease
• care rendered by coordinated teams of health
  professionals
• clinical judgment informed by evidence-based
  clinical decision support
• results matter (not just service rendered)
• systems and processes of care to support better
  outcomes

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Getting from here to there

• Here is a payment system that discourages
  innovation, care coordination, teams, systems and
  better outcomes
• There is a payment system that rewards practice
  innovation, care coordination, teams, systems and
  better outcomes
• How do we get from here to there?

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There . . .

• The Patient-Centered Medical Home
• Care coordinated by personal physician
• Responsible for whole person
• Prevention and coordination
• Systems
• Patient-Centeredness
• But a PCMH wont work without a payment model
  designed for Medical Care Version 2009

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Payments to a PCMH must

• Be sufficient to recognize the costs, work and
  time for a practice to be qualified as a PCMH and
  sustain it over time
• Recognize the value of physician time and work
  that falls outside of a face-to-face visit
• Help offset the costs of acquiring HIT and other
  systems

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Payments to a PCMH must

• Recognize the increased expense and work
  associated with caring for more complex patients
• Provide positive incentives for practices take
  the first step up the QI ladder . . . with
  additional incentives to climb higher

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Payments to a PCMH should not be based solely on

• doing as much as possible for as many as possible
  (FFS)
• or doing as little as possible for as few as
  possible (capitation)
• or how well a practice scores on quality measures
  (P4P) that may ignore elements of care that are
  not being measured

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A better idea combine FFS, monthly care
coordination fees, and performance

• The PCMH payment equation
• Monthly care coordination prospective
  payments (tiered levels 1, 2, 3)
• x risk adjuster
• Risk-adjusted care coordination fee
• FFS payment for visits
• Total payment w/o performance
• Performance based payments
• Total payment to the PCMH
• could be combined with shared savings model
• Incorporates work outside of visit and costs of
  HIT amount could vary depending on practice
  capabilities per NCQA scoring

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Patient-Centered Primary Care The Denmark
Example ______

• Blended primary care payment system
• Fee-for-service
• Medical home payment
• Organized off-hours service
• Health information technology
• Reimbursement for email
• Health information exchange common portal

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Denmark leads the way

• 98 of primary care MDs have totally electronic
  records and e-RX
• Highest public satisfaction with health system
  among European countries
• Source Commonwealth Fund, 2006

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Why is this a better way to pay?

• Reduces incentives for excess volume
• Creates incentives for physicians to spend time
  coordinating care outside a visit
• Accelerates adoption of HIT and other best
  practices
• Assures that physicians will see the most complex
  patients
• Rewards measurable improvements (quality,
  efficiency, satisfaction) and patient-centered
  care
• Supports value of primary care

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Payment Model for Non-PCMH

• Prospective Payment
• -Structure
• -Care coordination
• -Non face-to-face care
• -Adjusted for complexity of
• population services
• Enhanced RBRVS
• Fee for Service
• Performance

• Fee For Service
• Enhanced RBRVS
• Performance

• A la carte codes for
• -Care Coordination
• -Non face-to-face care

PCMH
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Payment Models for the PCMH

• Prospective Payment
• -Structure
• -Care coordination
• -Non face-to-face care
• -Adjusted for complexity of
• population services
• Enhanced RBRVS
• Fee for Service
• Performance

• Fee For Service
• Enhanced RBRVS
• Add-on codes
• Performance

• Global Payment
• Procedures
• Performance

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MEDICARE MEDICAL HOME DEMONSTRATION

• PER PATIENT PER MONTH PAYMENT RATES, OVERALL AND
  BY PATIENT HCC SCORE
• PPPM HCC Score lt1.6 1.6
  
• Tier 1 40.40 27.12 80.25
• Tier 2 51.70 35.48 100.35

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Practice Implications

• Need to understand challenges of transformation
• Initial capital and restructuring costs
• Ongoing support maintenance
• Reporting on quality, cost and satisfaction
• Implementation of HIT coincident with PCMH

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What needs to be done to get there?

• More study needed on costs to practices to become
  PCMHs
• More work on risk-adjusters and tiers for the
  PPPM care coordination fees
• Work with payers to overcome technical and
  administrative challenges
• More work on building in performance-based
  compensation and shared savings
• Pilot-testing
• Benchmarks for evaluations

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Benchmarks

• Does it provide sufficient support for practice
  transformation?
• Does it make primary care more competitive and
  viable?
• Is it administratively feasible for physicians
  and payers?
• Does it work in smaller practices?
• Does it create incentives for patient-centered
  care?
• Does it accelerate adoption of the PCMH model?
• Can it be scaled up to a national scale?
• Does it lead to better patient care?

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Summary

• Current pay models do not support the way care is
  delivered in 2009 (or the way it should be)
• New models are needed to support prevention,
  systems, and care coordination in PCMH
• Hybrid model (Denmark) holds particular promise
• Model must be viable for practices (including
  smaller ones), payers

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Summary

• More work needs to be done on development,
  implementation and evaluation
• But the promise of the PCMH will not be realized
  without a new payment system that works for
  patients, physicians and payers

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COMING SOON!

• Physician Payment Version 2009!