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New Payor Medical Homes Put More Dollars in Physician Pockets

February 3rd, 2012 by Patricia Donovan

Revamped medical home programs from private payors offer participating physicians a range of financial incentives, including payment for some non-visit tasks like the preparation of care plans.

The enhanced earning opportunities are aimed at doctors who more actively coordinate and manage their patients’ care across the healthcare continuum.

In one new medical home funding model, eligible doctors can earn 30 percent to 50 percent than they do today.

Bolstered by improved health outcomes from pilot programs, expanded medical home offerings from Aetna, WellPoint, and others offer high-performing physicians the chance to earn additional revenue.

For example, primary care physicians (PCPs) in Aetna’s newly launched patient-centered medical home program earn a quarterly coordination of care payment for each commercial (non-Medicare) Aetna member in their care. The quarterly payment rewards PCPs who participate in Aetna’s networks, who have been recognized by the NCQA as a PCMH, and who are not participating in other quality incentive programs with Aetna.

The NCQA’s multi-tiered medical home recognition program acknowledges practices for providing a number of services, chiefly those that improve patients’ access to care and that foster a climate of prevention and proactive healthcare.

“Patient-centered care is something Aetna has always advocated. Our PCMH program rewards PCPs who focus on the patient’s entire health needs, not just a single condition,” said Elizabeth Curran, head of National Network Strategy and Program Development for Aetna in a press release on Aetna’s Web site. “As a result, members may experience better health, fewer hospitalizations, improvements in transitions of care, and greater engagement. The PCMH program is one more way we are moving from a system that rewards the quantity of procedures to a system that rewards quality outcomes.”

Aetna’s national medical home program will begin in Connecticut and New Jersey.

And buoyed by significant drops in ER and hospital utilization resulting from its medical home pilots, WellPoint last month launched a new patient-centered primary care program that amps up revenue opportunities for participating PCPs, enhances information sharing, and provides care management support from WellPoint clinical staff.

The new program from nation’s second largest insurer represents an investment in primary care of $1 billion or more, according to a January 27, 2012 article in the Wall Street Journal.

Over time, WellPoint estimates the program will substantially improve quality and member health, potentially reducing trend in overall medical costs by as much as 20 percent by 2015.

“Our medical home pilots have proven to make a meaningful difference in patient quality, outcomes and cost,” said Dr. Harlan Levine, WellPoint executive vice president, Comprehensive Health Solutions, in a WellPoint press release. Some of our pilots have experienced an 18 percent decrease in acute inpatient admissions and a 15 percent decrease in total ER visits while improving compliance with evidence-based treatment and preventative care guidelines,” said Levine, who is responsible for leading the company’s payment innovation strategies.

There are three ways WellPoint physicians can earn additional revenue:

  • General increase to the regular fees paid to physician practices for specific services.
  • Payment for “non-visit” services currently not reimbursed, with an initial focus on compensation for preparing care plans for patients with multiple and complex conditions.
  • Shared saving payments for quality outcomes and reduced medical costs.

To participate in WellPoint’s shared savings, practices must meet plan quality requirements, which include quality standards established by organizations such as the NCQA, the American Diabetes Association, the American Academy of Pediatrics and others. Primary care physicians who maintain or improve quality may earn 30 percent to 50 percent more than they earn today through the shared savings model.

The amped-up provider incentives come on the heels of a report from the Congressional Budget Office (CBO) that most disease management and care coordination programs have not reduced Medicare spending:

The disease management and care coordination demonstrations examined by the CBO comprised 34 programs that used nurses as care managers to educate Medicare beneficiaries about their chronic illnesses, encourage them to follow self-care regimens, monitor their health, and track whether they received recommended tests and treatments. Programs could earn fees to cover the costs of the interventions.

All of the programs sought to reduce hospital admissions by maintaining or improving beneficiaries’ health, and because hospitalizations are expensive, that reduction was expected to be the key mechanism for reducing Medicare spending. The CBO found that:

  • On average, the 34 programs had little or no effect on hospital admissions. There was considerable variation in the estimated effects among programs, however.
  • In nearly every program, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered.
  • Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs. But, on average, even those programs did not achieve enough savings to offset their fees.

Posted in Healthcare Administration, Healthcare Costs, Patient-Centered Medical Home, Physician Practices | No Comments »

Timeline to ICD-10: BCBS Michigan Approach is Business-Driven

January 19th, 2012 by Patricia Donovan

In its third year of ICD-10 work, BCBS of Michigan sees the project as business-driven, not solely an IT initiative. Early on, the Blues plan realized the ICD-10 transition affected nearly all aspects of its business, explained Dennis Winkler, BCBSM’s ICD-10 technical program director, in this week’s webinar on Mapping the Way to ICD-10 Readiness.

One of the first steps in the project was determining how and where it was using codes, Winkler continued. The challenge was then determining how to associate or map ICD-10 diagnosis codes to the proper diagnostic category, and then validate the mappings for professional claims. Faced with more than 70,000 ICD-10 codes, BCBSM focused its work on codes with discrepancies and high-impact codes.

After identifying discrepancies — when an ICD-10 code points to more than one ICD-9 category — BCBSM enlisted five ICD-10-certified coders and a legion of doctors and nurses to help resolve code discrepancies.

The result of their efforts was “BCBSM Blue GEMs” — the payor’s own customized database of general equivalence mappings (GEMs) whose life span would end when CMS stops updating GEMS. The company is willing to share BCBS Blue GEMS with interested entities who wish to model its approach, provided a formal request is submitted.

The BCBSM Blue GEMS will be loaded into an ICD-10 encyclopedia, an enterprise-wide tool that will become “the single source of truth” on ICD-10 as well as a baseline for annual updates, Winkler said.

Winkler also predicted that the issue of ICD-10 neutrality — which occurs when neither the claims acceptance rate, the number or rate of inquiries, the rate of electronic claims or claims reimbursement amounts are affected — will continue to be a hot topic for 2012. Winkler defined the four challenges of neutrality as well as its six targeted dimensions, emphasizing that BCBSM has a reliable process for each of these six dimensions.

A successful transition to ICD-10 will require different levels of collaboration from payers, providers, medical societies and state agencies to get the job done, followed by “testing, testing and more testing.”

Posted in Health IT, Healthcare Administration, Healthcare Costs | No Comments »

Q&A: How Aetna Redefines Case Management for Medicare Population

January 12th, 2012 by Jessica Papay

The purpose of case management is care completion, states Dr. Randall Krakauer, Aetna’s Medicare medical director. Prior to his presentation on Demonstrating the Value of the Embedded Case Manager for the Medicare Population, Dr Krakauer discussed in detail the purpose of case management, the act of combining the capabilities of the physician and the health plan to create something new, and the enhanced patient experience that results from the medical home partnership between Aetna and Emory Healthcare.

HIN: What is the purpose of case management?

(Dr. Randall Krakauer): The purpose of case management is to assist members in the management of their own health. Case managers provide advice and assistance to make sure that patients understand what they need to do and that their questions are answered to engage their own risk factors and manage them better. Case managers help members to engage their own chronic conditions and to manage them more properly, and to better navigate the healthcare system to their own benefit.

HIN: What is care management at the provider level?

(Dr. Randall Krakauer): Better care management would involve the provision of additional resources at the provider level. This includes data (which may not be available to a provider) and longitudinal contact. Providers generally assume and accept responsibility for management of their own patients’ illnesses. They don’t always have all the data, however, and they sometimes don’t have the outreach for longitudinal follow-up case ability. For example, they don’t always know what other physicians are doing. They don’t always know what other medications are being prescribed. Patients get lost in follow-up. Patients don’t always follow instructions or fill their own prescriptions. They leave a physician’s office and don’t necessarily understand the instructions as well as they should. The purpose of case management is care completion. When a physician sees a patient in the hospital and writes a set of orders, he has a very high level of confidence that this will all get done. That’s not the case with outpatients seen in the office. The purpose of case management is to improve the ability to manage the cases in that milieu.

HIN: How can the capabilities and skill sets of the health plan be combined with those of the provider to create something greater than the sum of its parts?

(Dr. Randall Krakauer): The health plans generally engage in case management and disease management for a population that they identify through their own means or algorithms. They try to coordinate and collaborate with physicians’ offices to whatever extent is possible, frequently by telephone. Physicians are likewise trying to manage their own patients and this includes incoming calls and occasionally outgoing calls, plus other types of contact. They each have information and data that the other may lack. The physician has knowledge of the case, the family and the milieu that the health plan lacks. The health plan has claims information, its own process and transaction data for the individual case, and also global information on outcomes for the provider’s patients in general. We also have an expertise in longitudinal case management and the ability to provide people who will, with experience, outreach to members in between office visits.

Combining the capabilities of the physician and the health plan can create something greater than the sum of its parts; that is, the physicians can identify cases better that could be in need of case management. Physicians, in collaborating with case managers, can give case managers instructions on types of follow-ups that are necessary. Case managers can provide physicians with information, transactions, etc. For example, “This patient left your office. What has happened that you should know about that requires your attention?” Or, “Your heart failure patient has put on a kilogram and a half of weight in one week.” “This prescription was not filled.” It is this interchange, exchange and collaboration that has the potential for creating something that is better.

HIN: Aetna recently announced a partnership with Emory Healthcare and a patient-centered primary care program that will use embedded case managers. You were quoted as saying that this medical home partnership would improve the patient experience. Can you describe how this will happen?

(Dr. Randall Krakauer): In collaborating with the Emory physicians and their staff, we will be able to keep in contact with our members, and/or their patients, when they leave the office to answer questions, to follow up on health issues, to follow up on prevention issues, to follow up on management issues, to bring issues that arise to the attention of the physicians, etc. Once again, we cannot create the milieu of an inpatient patient experience for someone who has gone home. We can try to improve the completion factor, the ability to complete the care that is ordered and provide feedback and information on the results of this care.

Posted in Case Management, Disease Management, Healthcare Administration, Healthcare Trends, Patient-Centered Medical Home, Physician Practices, Transitions in Care | No Comments »

Q&A: With Hospital Core Measures, 90% Doesn’t Cut It

December 22nd, 2011 by Jessica Papay

Good core measure performance is good patient care, explains Dr. Steve Berkowitz, president at SMB Health Consulting and former chief medical officer for the central and west Texas division of HCA at St. David’s HealthCare. Prior to his presentation on Healthcare Performance Improvement: Exceeding Core Measure Targets for Value-Based Reimbursement, Dr. Berkowitz discussed the most challenging clinical measures to improve, tools for collecting core measure data and physician incentives to improve performance.

HIN: St. David’s healthcare system has specifically improved care related to heart attacks, heart failure, pneumonia and surgical care. What was the most challenging clinical measure among those to improve and what process changes sparked the improvement?

(Dr. Steve Berkowitz): Every one of those measures has unique challenges that we needed to handle. Frankly, a general challenge that we had was developing these protocols over eight hospitals in two different markets. Having said that, the most challenging measures are the surgical care improvement program (SCIP) measures because they are resource-intensive as well as require physician buy-in and input to make sure they get done appropriately. One thing I want the audience to come away with is a sense of enthusiasm that your organization can get it done. You can achieve virtual 100 percent performance with some hard work, checking and rechecking, and dedication of your physicians, nursing, pharmacy and administration. But most important, the establishment of good core measure performance is good patient care.

HIN: Can a hospital or health system that does not have an electronic health record share this type of data efficiently?

(Dr. Steve Berkowitz): Absolutely. When we first started this, we had very little of an electronic record at St. David, and that’s improving fast. What we were able to do was just develop internal processes to track those patients very early, have concurrent review of those patients, and get the data widely disseminated and available. Not only can we track our performance now, but we can use that data to identify outliers, whether they be physicians, nursing, pharmacists, etc., so that we can specifically target approaches to go for our goal of zero misses.

HIN: In the absence of the EHR, did you use registries at all to either collect the data or disseminate the data?

(Dr. Steve Berkowitz): We had some internal processes that we developed. But it really was a function of downloading all of the data from our system and then individually tracking and monitoring. I want to emphasize that to be excellent in core measures, it’s very labor intensive. You have to check, check and recheck, and there needs to be redundancies built into the system because we need zero misses. Ninety percent doesn’t cut it anymore, 95 percent doesn’t cut it anymore, and even 99.6 percent performance leaves a lot of dollars on the table.

HIN: What physician incentives were in place, or are in place, at St. David to encourage performance improvement?

(Dr. Steve Berkowitz): We have very little physician incentive there, although there is an incentive plan for the hospital lists because they are the driver of these measures, particularly with heart attacks, pneumonia and heart failure, and maybe less so with SCIP. But we instituted an incentive program for our hospital lists and they led the charge. They got us to outstanding performance quickly in those three categories.

Posted in Healthcare Administration, Healthcare Quality Ratings, Hospital Readmissions, Physician Practices, e-Health | No Comments »

Hospital Initiative, GE-Microsoft Collaboration Target Healthcare-Acquired Conditions

December 19th, 2011 by Cheryl Miller

Hospitals are the targets of two of our stories this week: an initiative and collaboration both aimed at reducing the millions of preventable injuries and complications arising from hospital-acquired infections (HAI.) Ironically, this refuge for the sick is making people sicker; in the United States alone, an estimated 1.7 million HAIs occur annually, resulting in $35 billion in additional healthcare costs, and the loss of nearly 100,000 lives. As we reported in an earlier story this year, a University of Maryland report found that nearly half of the hospital rooms of patients who tested positive for a multi-drug resistant bacteria were contaminated with the bacteria.

In response to this, hospitals across the country will now have the resources and support to reduce HAIs: the HHS has launched a new initiative called the Hospital Engagement Network. Part of the Partnership for Patients initiative, a nationwide public-private collaboration to improve healthcare, $218 million will be awarded to 26 state, regional, national, and hospital system organizations to help develop learning collaboratives for hospitals and provide a wide array of initiatives and activities to improve patient safety.

And a new collaboration between GE Healthcare and Microsoft is tackling this problem by pulling together data from disparate IT systems and identifying those patients most at risk for a given HAI. Hopefully their solutions will enable healthcare organizations to more effectively deploy their resources and deliver better care at lower costs.

And on a local level, a new ER unit designed solely for seniors is in place in HIN’s backyard, at New Jersey’s Monmouth Medical Center. To ease the increasingly complex needs of those 65 and up, the unit has special age-related features like wall sconces with dimmers and floor lighting to prevent falls. More in this issue.

In other news, a new study shows that disease registries can improve health outcomes and save the United States billions of dollars. Research on 13 registries in five countries, including the United States and Sweden, shows that these tools are becoming even more important under healthcare reform as payments for care are linked to effective treatments. According to our 2011 Survey on patient registries, 68 percent of respondents are using registries to improve care quality.

And lastly, a new report from Deloitte reveals that the majority of physicians do not think that PPACA will reduce costs by increasing efficiency, and they are predicting a continued shortage in primary care physicians as they seek administrative roles in health plans, hospitals and other settings.

These stories and more, in this week’s issue of Healthcare Business Weekly Update.

Posted in Accountable Care Organizations, Affordable Care Act, Avoidable ER Use, Disease Management, Health IT, Healthcare Administration, Healthcare Costs, Healthcare Trends, Hospital Readmissions, Transitions in Care, Uncategorized | No Comments »

Q&A: CDPHP Embedded Case Managers Usher In New Era of Healthcare

November 30th, 2011 by Jessica Papay

From the perspective of the health plan-provider relationship, CDPHP embedded case managers are an example of both parties working together in partnership, explains Lisa Sasko, MA, MBA, director of clinical transformation at CDPHP. Prior to their presentation on The Role of Embedded Case Managers in Clinical Transformation, Sasko, along with Charlene Schlude, director of case management, describe the functions of an embedded case manager, target populations and issues to address prior to embedding a case manager in a practice.

HIN: A news release on the CDPHP physician practice transformation program mentioned that the embedded case managers help practice staff better facilitate medical, behavioral and pharmaceutical services for patients. Can you provide, in more detail, their functions in these areas?

(Charlene Schlude): We have embedded RN case managers that work in the practices and their primary function and role is to assist the physicians and staff in the practice to identify, engage and outreach patients in their practice, whom they believe have many chronic and complex medical issues that may require special coordination of care. The addition of social work, perhaps because there may be some social concerns and financial constraints around having a chronic illness or maybe the loss of a job, help people to engage in a self-management plan. After the case management experience is over, the patients should be able to continue on with the education, adherence techniques, the understanding of their diagnosis and having a list of questions to bring with them to speak to their doctor about regarding their condition. The patient should be empowered and ready to help self-manage their chronic condition on an ongoing basis.

HIN: You mentioned complex patients as targets for the case management program. Are there other target populations, such as by disease state?

(Charlene Schlude): Yes, we target any patient with a complex illness. That could be someone in our commercial product or our self-insured product line; people who may have had a trauma or a catastrophic illness or event. We work closely with our transplant patients because they have significant social and emotional needs as well as medical and pharmaceutical needs. We work with anyone who has a great deal of barriers to self-managing their care, which could be that they have a situation in their home where they’re the caregiver for another patient or another member of their family.

HIN: What are the operational and cultural issues to address before embedding case managers in the practice?

(Charlene Schlude): We found that when we were going into the medical home as embedded case managers, we were going to have to be very flexible and open to the different nuances of each practice. We know that the underlying concepts around medical homes are the transition of the practice so that everyone has an integral part on the team. We knew that we had to be very open to the workflows in the practice. Our case managers are sensitive to that, but they do need to become an integral part of that practice as a member of the team. While they’re employed by the health plan, the message to the practice and to the members is that they are a part of that team and are involved with all of the decisions; they sit in on conferences and talk with the physicians directly. But again, we are being sensitive to the workflows because we did not want to go in and prescribe how things were going to be in one medical home to the other, and say that it had to be consistent.

(Lisa Sasko): From an operational standpoint — from a plan and provider relationship standpoint — some of the issues that were important for us to address, focused on recognizing and working with our practices to recognize that this is a new era of healthcare. We need to work together in partnership. CDPHP is supporting these practices to become these enhanced primary care practices through practice transformation, through the use of consultants, etc. In addition, CDPHP is putting these practices on a new payment model that gets them away from fee-for-service onto a risk-adjusted base capitation, which offers a lucrative, to some degree, bonus potential based on improving quality of care for the members and improving the efficiency of the resources utilized.

Posted in Case Management, Disease Management, Healthcare Administration, Patient-Centered Medical Home, Physician Practices, Transitions in Care | No Comments »

Q&A: Prepping a Practice for a Case Manager

November 21st, 2011 by Jessica Papay

Physician engagement is step one in the process of embedding case managers, says Robert Fortini, VP and chief clinical officer at Bon Secours Health System. There is much value in embedding a case manager in a primary care practice, including their influence on patients’ medication compliance. Prior to presenting for HIN’s August 10 webinar on Embedded Case Management in the Primary Care Practice: Program Design and Results, Fortini discussed preparing a practice for the arrival of a case manager.


HIN: How do you prepare a physician practice for the case manager’s arrival so that a supportive environment is created?

(Robert Fortini): We don’t do anything at the practice level until we have provider engagement. Any changes that are made to the workflow are thoroughly vetted through the entire provider staff — whether mid-level or physician — and we get consensus and agreement. Typically, we have an initial meeting where everything is thoroughly explained about the case manager’s role; everyone is given a copy of the job descriptions and workflows, protocols, goals and objectives, as well as competency checklists. And everybody is thoroughly prepared in advance.

Only at that point when we have consensus from the providers, do we then proceed with the HR hiring action. By the time that’s complete and the person gets on board, the practice is completely prepared for their role.


HIN: In the January issue of the “Healthcare Finance News,” you were quoted as saying that “newly formed Bon Secours care teams of doctors and nurses and the embedded case managers would do workflow rehearsals to make sure that all teams were performing care uniformly.” Can you talk about these rehearsals and any issues or challenges that they identify?

(Robert Fortini): This concept is more of a structured manner of doing an old concept. Not all the rehearsals are pertinent to the case managers. One of the workflow rehearsals is for a standard rooming protocol for support staff. In this particular event, we’re using EPIC, an electronic medical record platform. We will rehearse with a medical assistant or a licensed practical nurse (LPN) responsible for rooming the patient what the minimum data set to be captured will be. We want to make sure that weight and height is recorded, so BMI is calculated. We want to make sure that tobacco cessation screening and counseling are addressed. We want to make sure their vital signs are done appropriately, that a past medical history and past surgical history is captured, that medication reconciliation occurs, and that refills that are due are pended for the physician to sign. This way, by the time a physician gets in the room, all the busy work is done and most of the documentation has already been started. This streamlines the physician’s role. As you can see, a case manager might not be engaged in that workflow.

Another workflow that we rehearse is the concept of a daily huddle. This is literally a team meeting at the start of the day that runs for 7-10 minutes in the hallways that we expect the case manager to be a part of. This is a review of the day’s schedule — what’s coming in that day. This way, every member of the team is prepared in advance, including the case manager, who might have specific case management functions. For example, with an elderly patient coming in at 10 a.m. with multiple co-morbidities, poly-pharmacy and who is struggling, the expectation is that the physician is going to come in and address immediate medical needs and build a relationship with that patient.

But before the patient leaves the practice, he or she will sit with the case manager for medication management and adherence education. This is why the RN case manager should be prepared in advance for what’s coming in that day. The other value to that is that the immediate clinical support staff is also prepared. They all know in advance if that patient needs to have an EKG done. And so before the physician gets in the room, the EKG has been performed and the results are available for interpretation. It streamlines the visit and improves the efficiency.

The specific workflow can get more sophisticated as the team matures. Those are standard workflows. But then we have disease-specific protocols that we also rehearse with the staff.


HIN: To add to your response, are all of these workflows, especially the more specific ones, documented?

(Robert Fortini): Absolutely. We have a protocol for each one. And the expectation of performance is very clearly established with the staff; this is what the staff will do every single time a patient arrives.


HIN: You also said in the article that medication compliance would be a focus of these care teams. Do the embedded case managers have any duties in this area?

(Robert Fortini): Yes, and the example that I just used in my answer to the second question illustrates this. It is not uncommon, especially in a well-established internal medicine practice, for the needs of the geriatric patient to be prominent. Usually that means poly-pharmacy. If you’ve ever been in a situation where you’re taking more than two or three medications a day, it can be confusing. That 20 minutes of education that the case manager will perform with the elderly patient about what each medication does and how they should be taken is invaluable. We go right down to the basics. The case managers also set up pillboxes with the patients to help make complying with a medication regimen simple.

That’s just one illustration of medication compliance. We acknowledge the fact that 30 percent of all prescriptions are never filled and that of the remaining 70 percent, probably half of them are taken incorrectly, pills are split or days are skipped. Compliance with a medication record is of paramount importance for managing a chronic illness, and in certain categories, preventing readmission.

Posted in Case Management, Disease Management, Healthcare Administration, Healthcare Trends, Hospital Readmissions, Medication Management, Physician Practices, Transitions in Care | No Comments »

Q&A: How Ohio Reduces Avoidable ER Visits by Medicaid Beneficiaries

November 10th, 2011 by Jessica Papay

An Ohio collaborative of Medicaid plans uses a rapid cycle quality improvement approach to reduce avoidable ER visits by its Medicaid population. In an interview prior to her presentation on Reducing Avoidable ER Visits by Medicaid Patients Through Quality-Based Interventions, Mina Chang, PH.D., provided details on the effort. Dr. Chang works for the Bureau of Health Services Research for the Ohio Department of Job & Family Services.

HIN: Why were these particular regions of Ohio chosen for the study?

(Dr. Mina Chang): The reason we focused on urban centers is that that’s where the hospital system is located. It’s high volume. We work with each of the regions and with about 30-40 healthcare leaders. It’s a local driven initiative. This group of participants would help us identify key populations that are unique, or a priority population that potentially can benefit from reducing avoidable visits. This group would also help Ohio Medicaid develop and test prevention or quality interventions that are meaningful for those populations that would be identified.

HIN: One of the five regions in the collaborative is Toledo, Ohio, which has the highest emergency department utilization in the nation. What methodology is used to reverse this trend?

(Dr. Mina Chang): We follow a methodology developed by the Institute for Health Care Improvement. It’s population-based and patient-centered. What is attractive about this methodology is that it adopted a rapid cycle, quality improvement approach that typically is focused on a very small subset of a population. With this methodology, you develop a quality improvement strategy and test it out until something is found to be effective. Then, you can in turn extend it to a larger population. It’s very different from a traditional research approach, where as you have to wait four to five years to find out that your investment has not worked.

HIN: How did you identify the priority populations for these interventions?

(Dr. Mina Chang): State Medicaid data has confirmed with what our practitioners see day in and day out in their practice. Medicaid populations predominantly are children. Many high-utilizers are upper respiratory tract infections and otitis media types of issues.

Posted in Avoidable ER Use, Healthcare Administration, Healthcare Trends, Hospital Readmissions, Physician Practices, Reducing Readmissions, Uncategorized | No Comments »

ACO Final Rule Accompanied by Advance Payments for Care Coordination Tools

October 24th, 2011 by Cheryl Miller

The anxiously awaited final rule on accountable care organizations (ACOs) for Medicare beneficiaries is finally out. Based on the more than 1300 comments CMS received on its proposed ACO ruling first released in March, this new rule will make it easier to establish ACOs by providing organizations with additional funding for support tools, such as new staff or information technology systems. Under this new initiative, the Advanced Payment Model, these payments would be recovered from any future shared savings.

The second initiative, the Medicare Shared Savings Program, will provide incentives for healthcare providers who agree to work together and become accountable for coordinating care for patients. Participants who meet certain quality standards based upon, among other measures, patient outcomes and care coordination among the provider team, may share in savings they achieve for the Medicare program. Both initiatives launched on October 20th.

The United States earned low marks in healthcare access and affordability in the Commonwealth Fund’s third annual scorecard report. According to the report, the nation received a 64 out of a possible 100 when compared to best performers. Among the findings that contributed to the score were the percentage of overweight or obese children (32 percent), the number of prescription errors among elderly Medicare beneficiaries (one out of four) and the percentage of adults that reported not having a primary care provider in 2008 (44 percent).

Despite the low scores in key quality indicators, the United States is doing something right in the area of heart failure (HF) care. New research from the Yale School of Medicine shows that hospitalization rates for HF dropped by 30 percent from 1998 to 2008. One year mortality rates also dropped slightly during this period. HF ranks as the most frequent cause of hospitalization and re-hospitalization among older Americans, with related costs estimated at $39.2 billion in 2010.

In other news, 46 percent of physician practices do not meet NCQA standards for medical homes. The news, from a recent University of Michigan-led study, found that while larger, multi-specialty practice groups can more easily meet the standards, one in nine Americans receive healthcare from smaller, often solo practices. Researchers recommend initiatives to help these smaller practices team up with larger organizations to establish more medical homes.

More than 50 percent of physicians and hospitals are looking at ways to team up, a trend that is causing medical malpractice concerns. Aon’s 12th annual Hospital and Physician Professional Liability Benchmark Analysis states that healthcare systems will face significant risk management challenges associated with integrated physician-hospital arrangements. The study details the growth of integrated self-insurance strategies and highlights the challenges faced by systems as they pursue the cost of risk savings.

And lastly, what are you doing to staunch the flow and expense of avoidable emergency department use? Describe your efforts in this area by October 31 and you will receive a free executive summary of results from this second annual survey. These stories and more in this week’s issue of Healthcare Business Weekly Update.

Posted in Accountable Care Organizations, Affordable Care Act, Avoidable ER Use, Health IT, Healthcare Administration, Healthcare Costs, Healthcare Quality Ratings, Healthcare Trends, Hospital Readmissions, Patient-Centered Medical Home, Physician Practices, Reducing Readmissions, Uncategorized | No Comments »

Q&A: How to Survive and Thrive Under Bundled Payments

October 14th, 2011 by Patricia Donovan

Time in the trenches with Acute Care Episode (ACE) pilot participants qualifies Jim Reilly to comment on CMS’s latest Bundled Payments initiative specifically and bundled payment trends in general. The managing partner of TRG Healthcare Solutions shares three lessons CMS learned from the ACE pilot and more in this interview with the Healthcare Intelligence Network (HIN).

(This interview was conducted in advance of Reilly’s presentation on “Evaluating the Bundled Payment CMS Initiative — Legal, Financial, and Clinical Considerations,” an October 19, 2011 HIN webinar.)

HIN: To begin with, what did CMS learn from the ACE Pilot and how is that influencing its newest payment initiative?

Mr. Reilly: First, CMS learned that episodic payments or bundled pricing is a very effective way to incentivize hospitals and physicians to work closer together. They firmly believe combining the fees for an episodic period will lead to better coordinated care, not only between hospitals and physicians but across different specialties, to work together for optimal outcomes. They also learned that it will save CMS money. Through their bundled pricing experience in the past, this has led to lower rates that CMS pays for providers. And they also feel, finally, that it’s going to improve beneficiary health and outcomes. So it’s something that they’re investing in and moving forward with aggressively nationally.

HIN: ACE Pilot participant Baptist Health System, one of the companies that you worked with, refers to its ‘Hallmark moment’ of distributing gainshare checks to participating physicians. What are some other benefits of participation for health systems?

Mr. Reilly: Physician alignment is number one. The level of collaboration has truly increased within that health system. That then drives a greater focus on quality metrics and service metrics — not only the cost side, but also a different level of engagement in trying to move those important cardiovascular and orthopedic metrics in this case. That’s been a great benefit to the health system.

The health system is also benefitting from this experience because CMS is not the only payor that’s going to be adopting bundled payments as a way to pay for care. There will be other payors outside of CMS — outside national payors that will be active in bundled pricing. And a system like Baptist Health is well positioned to take advantage of that as well.

HIN: And finally, our fifth annual survey on the patient-centered medical home (PCMH) found that 9 percent of respondents have already begun experimenting with bundled payments. From your perspective, is this an adequate representation of the marketplace? Where do you think this trend is going?

Mr. Reilly: I don’t think it’s an adequate representation. Sometimes in this industry, we’re a little bit slow to move and be as innovative as we should be. The trend here, particularly with specialties like cardiovascular services and orthopedic services, is definitely more toward acceptance of risk in contracting with Medicare and other payors. You’ll see a great deal of activity beyond CMS, with other payors following suit.

And in order to succeed in that environment, we need more providers out there becoming clinically integrated — not only for the acute care episode, but for post-acute care services, so that we can survive and thrive under bundled payment for CMS. And other payors are going to adopt this. This current CMS bundled pricing initiative is going to escalate to other providers out there moving forward in this direction.

HIN: To follow up on that, could you define ‘clinical integration’ and explain why that needs to happen first?

Mr. Reilly: Certainly. The care process requires multiple caregivers and providers to get the optimal outcome and service. And today many times, we have competing interests among doctors and hospitals. We’ve got physicians that are dealing with challenges of running private practices; sometimes that takes away from collaborating in what is the optimal episode in amounts and levels of care provided for patients.

Once we move into alternative payment methodologies such as bundled payments, it breaks down some of those barriers. We’ve got surgeons and cardiologists and anesthesiologists and radiologists and consultants working more in a united way to ensure that that patient is getting optimal care and efficient care. That’s clinical integration.

Posted in Accountable Care Organizations, Bundled Payments, Healthcare Administration, Healthcare Costs, Patient-Centered Medical Home, Physician Practices, Reducing Readmissions | No Comments »

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