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Payment Models that Support Medical Home and ACO Principles: Maryland’s Experience Web Seminar April 25, 2013 Follow this event on Twitter Hashtag: #AHRQIX.

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Presentation on theme: "Payment Models that Support Medical Home and ACO Principles: Maryland’s Experience Web Seminar April 25, 2013 Follow this event on Twitter Hashtag: #AHRQIX."— Presentation transcript:

1 Payment Models that Support Medical Home and ACO Principles: Maryland’s Experience Web Seminar April 25, 2013 Follow this event on Twitter Hashtag: #AHRQIX

2 Using the Webcast Console and Submitting Questions 2 Click the Q&A widget to get the Q&A box to appear To submit a question, type question here and hit submit.

3 Accessing Presentations Download slides from console Click on the “Download Slides” widget for a PDF version 3

4 What is the Health Care Innovations Exchange? Publicly accessible, searchable database of health policy and service delivery innovations Searchable QualityTools Successes and attempts Innovators’ stories and lessons learned Expert commentaries Learning and networking opportunities New content posted to the Web site every two weeks Sign up at under “Stay Connected”http://www.innovations.ahrq.gov 4

5 Innovations Exchange Web Event Series Archived Event Materials Available within two weeks under Events & Podcasts Next Events Thursday May 9, pm ET A Close Look at Care Coordination within Patient-Centered Medical Homes: West Virginia’s Experience Wednesday June 5, pm ET Building Health Information Exchanges to Support Accountable Care Organizations and Medical Homes: Delaware’s Experience 5

6 Today’s Event Moderator Meredith B. Rosenthal, PhD Professor of Health Economics and Policy Harvard School of Public Health 6

7 Motivation: Goals of New Accountability Contracts When we seek root causes of quality gaps and cost problems, fragmentation rears its head When we seek root causes of quality gaps and cost problems, fragmentation rears its head Payment reform can reduce fragmentation by making a single entity accountable for all care Payment reform can reduce fragmentation by making a single entity accountable for all care Incentives and performance measurement are the key levers Incentives and performance measurement are the key levers Patient-centered medical homes are one such concept and a building block for others including accountable care organizations Patient-centered medical homes are one such concept and a building block for others including accountable care organizations 7

8 Patient-Centered Medical Home Basics Joint Principles: physician-directed care; whole person orientation; coordinated and integrated care; quality and safety; enhanced access; payment system that rewards value (i.e., not resource-based relative value scale) Joint Principles: physician-directed care; whole person orientation; coordinated and integrated care; quality and safety; enhanced access; payment system that rewards value (i.e., not resource-based relative value scale) National Committee for Quality Assurance has a measurement tool that has de facto become another definition National Committee for Quality Assurance has a measurement tool that has de facto become another definition Broadly, a set of structures, processes that improve access and reliability of care with a focus on individual patient needs and payment to support all of the above Broadly, a set of structures, processes that improve access and reliability of care with a focus on individual patient needs and payment to support all of the above 8

9 9 Initiatives Are Proliferating Private/public Patient-Centered Medical Home pilots have proliferated across the country Private/public Patient-Centered Medical Home pilots have proliferated across the country All major national carriers are sponsoring some kind of pilot or initiative All major national carriers are sponsoring some kind of pilot or initiative Two Medicare demonstrations Two Medicare demonstrations Numerous existing and emerging Medicaid and other State –sponsored initiatives Numerous existing and emerging Medicaid and other State –sponsored initiatives Hoped for effects: improved access and quality of care (population health); improved care coordination and aggressive management of high-risk patients will equate to cost savings Hoped for effects: improved access and quality of care (population health); improved care coordination and aggressive management of high-risk patients will equate to cost savings

10 Payment Incentives to Support Medical Homes Fee for service is incompatible with medical home concepts: huddles, between visit monitoring, care coordination, and support for self management are not reimbursable Fee for service is incompatible with medical home concepts: huddles, between visit monitoring, care coordination, and support for self management are not reimbursable Payers may add a care management fee – per member per month – to cover these costs Payers may add a care management fee – per member per month – to cover these costs Such mixed payment may also soften productivity incentives Such mixed payment may also soften productivity incentives Pay for performance or shared savings used to get practices focused on quality, downstream costs Pay for performance or shared savings used to get practices focused on quality, downstream costs 10

11 Contracting Challenges with Medical Homes Multi-payer environment may make it hard for practices to fully step off hamster wheel Multi-payer environment may make it hard for practices to fully step off hamster wheel Small primary care practices (arguably the place we want transformation the most) not good candidates for high-powered incentives Small primary care practices (arguably the place we want transformation the most) not good candidates for high-powered incentives Shared savings subject to enormous random variation with small numbers of patients Shared savings subject to enormous random variation with small numbers of patients Need to guard against possible unintended consequences of patient access problems, provider financial losses Need to guard against possible unintended consequences of patient access problems, provider financial losses 11

12 Zoom Out to Accountable Care Organizations Regardless of how successful medical homes are, primary care cannot fix fragmented care alone Regardless of how successful medical homes are, primary care cannot fix fragmented care alone Building medical neighborhoods and entities large enough to manage total costs (i.e., Accountable Care Organizations) is required Building medical neighborhoods and entities large enough to manage total costs (i.e., Accountable Care Organizations) is required At a minimum payers should provide incentives for hospitals and specialists to work with medical homes (e.g., BlueCross BlueShield Michigan) At a minimum payers should provide incentives for hospitals and specialists to work with medical homes (e.g., BlueCross BlueShield Michigan) 12

13 Target Spending Maximum shared savings = 7.5%* Year1 max shared loss=5%* Year2 max shared loss=7.5%* Year 3 max shared loss=10%* Total spending for ACO patients 87.5%* 108.3%* 112.5% * 116.7%* Risk Corridor $0 Slope = % minimum savings Risk Sharing Arrangements to/from ACO *Percent of target 13

14 Key Takeaway Points Integrated health care delivery requires payment approaches with greater accountability for total costs and outcomes Integrated health care delivery requires payment approaches with greater accountability for total costs and outcomes Policy initiatives are simultaneously working to encourage implementation of specific clinic models to manage populations and complementary payment mechanisms Policy initiatives are simultaneously working to encourage implementation of specific clinic models to manage populations and complementary payment mechanisms A spectrum of mixed payment and risk sharing approaches are available A spectrum of mixed payment and risk sharing approaches are available Key issues of balancing appropriate risk, incentives against potential unintended consequences Key issues of balancing appropriate risk, incentives against potential unintended consequences 14

15 Presenter Ben Steffen, MA 15 Executive Director Maryland Health Care Commission

16 Maryland Program History 16 Studies in 2009 showed Tools to enhance primary care are limited in Maryland law Tools to enhance primary care are limited in Maryland law Higher payment for primary care alone would be inadequate Higher payment for primary care alone would be inadequate Legislation in 2010 established Authority of the state to launch a multi-payer PCMH pilot Authority of the state to launch a multi-payer PCMH pilot Exemption for a cost-based incentive payment tied to PCMH Exemption for a cost-based incentive payment tied to PCMH Authority for carriers to establish single carrier PCMH programs with incentive-based reward structure (shared savings) and data sharing Authority for carriers to establish single carrier PCMH programs with incentive-based reward structure (shared savings) and data sharing

17 Maryland Health Care Commission Convene stakeholders to form multi-payer Patient-Centered Medical Home (PCMH) program: state action exemption to Federal anti-trust Convene stakeholders to form multi-payer Patient-Centered Medical Home (PCMH) program: state action exemption to Federal anti-trust Develop standards and approval process for single payer PCMH programs (2 programs recognized as of March 2013) Develop standards and approval process for single payer PCMH programs (2 programs recognized as of March 2013) Participation in multi-payer: 5 commercial and 6 Medicaid managed care organizations Participation in multi-payer: 5 commercial and 6 Medicaid managed care organizations 17

18 Overview: Multi-Payer Pilot Pilots sites included 52 participating practices: including 7 solo physician; 1 nurse practitioner-led; 18 small (2-5 practitioners); 18 medium (6-10 practitioners); 8 large (11+ practitioners); 2 federally qualified health centers Pilots sites included 52 participating practices: including 7 solo physician; 1 nurse practitioner-led; 18 small (2-5 practitioners); 18 medium (6-10 practitioners); 8 large (11+ practitioners); 2 federally qualified health centers Practices are broadly dispersed across Maryland Practices are broadly dispersed across Maryland 330 providers including physicians and nurse practitioners 330 providers including physicians and nurse practitioners Participation agreement binds providers and payers Participation agreement binds providers and payers 18

19 19 Multi-Payer PCMH Program

20 20 What We Have Accomplished Reached 250,000 privately insured and Medicaid patients Reached 250,000 privately insured and Medicaid patients National Committee for Quality Assurance (NCQA) Patient-Centered Medical Home Recognition achieved by 52 practices with two-thirds achieving Level II or III at first milestone by March 2012 and all Level I practices submitted for Level II or III by January 2013 National Committee for Quality Assurance (NCQA) Patient-Centered Medical Home Recognition achieved by 52 practices with two-thirds achieving Level II or III at first milestone by March 2012 and all Level I practices submitted for Level II or III by January 2013 All practices participated in quality reporting by submitting 2011 and 2012 data: 7 of the Maryland measures are core or alternate under the Office of the National Coordinator (ONC) meaningful use; 8 of the 33 are ACO measures All practices participated in quality reporting by submitting 2011 and 2012 data: 7 of the Maryland measures are core or alternate under the Office of the National Coordinator (ONC) meaningful use; 8 of the 33 are ACO measures

21 21 Key Features: Payment Model Fee-For-Service Primary care practices continue to be reimbursed under their existing fee-for-service payment arrangements with health plans Fixed “Transformation” Payment Primary care practices receive a per patient per month fee (paid semi-annually) between $3.50 and $6.00 Incentive Payment (Shared Savings) Primary care practices receive a share of actual savings generated by reducing total cost of care through improved patient outcomes + Practices must achieve NCQA recognition; invest a portion of fixed payment in care coordination Practices must report on a set of clinical quality and utilization measures with requirements increasing over 3 years

22 Multi-Payer Shared Savings “Total cost of care” includes all health services regardless of whether the services are provided by the Patient-Centered Medical Home practice “Total cost of care” includes all health services regardless of whether the services are provided by the Patient-Centered Medical Home practice Budget is set by practice’s baseline period costs inflated by state-wide trend (7.4% in ) Budget is set by practice’s baseline period costs inflated by state-wide trend (7.4% in ) Practices whose total cost of care is below budget are eligible to receive shared savings payments Practices whose total cost of care is below budget are eligible to receive shared savings payments Practices receive from 30-50% of shared savings depending on the number of quality metrics reported Practices receive from 30-50% of shared savings depending on the number of quality metrics reported 22

23 Multi-Payer Shared Savings Only patients attributed to the practice in both years are included in the calculations Only patients attributed to the practice in both years are included in the calculations Patient-level cost adjustments address outliers: patients that died; trauma cases excluded; costs for patient are capped $75,000 Patient-level cost adjustments address outliers: patients that died; trauma cases excluded; costs for patient are capped $75,000 Savings calculations generated from All Payer Claim Data Base: savings trend is established by cost analysis with non-participating practices Savings calculations generated from All Payer Claim Data Base: savings trend is established by cost analysis with non-participating practices 23

24 Shared Savings Results Submitted Quality Measures? # of PracticesPediatric Adult/Adult Pediatric Hybrid Yes49643 No101 Generated Savings? Yes23122 No27423 Eligible for Savings? Yes

25 Did Practices Generate Savings? 25 All but 1 practice reported some quality metrics from electronic health records; 23 practices generated savings All but 1 practice reported some quality metrics from electronic health records; 23 practices generated savings Moderate relationship between reduced hospital days and lower average cost Moderate relationship between reduced hospital days and lower average cost Weaker relationship between reduced emergency room visits and lower costs Weaker relationship between reduced emergency room visits and lower costs Sample too small to access relationship between reduced readmissions and lower costs Sample too small to access relationship between reduced readmissions and lower costs Random variation drove some savings; trimmed savings for practices that produced savings less than 10% Random variation drove some savings; trimmed savings for practices that produced savings less than 10%

26 Impact of Cap for Private Carriers 26 Shared Savings Payment Reduced under 10% Cap 11 Practices

27 27 Applying the Payer Agnostic Model Consistent shared savings model; multi-payer model similar to one- sided accountable care organization model Consistent shared savings model; multi-payer model similar to one- sided accountable care organization model Alignment of quality metrics across initiatives Alignment of quality metrics across initiatives Link reward structure with state improvement goals Link reward structure with state improvement goals Broaden participation to carriers with small market share Broaden participation to carriers with small market share Build trust in All-Payer Claims Database (attribution and shared savings) Build trust in All-Payer Claims Database (attribution and shared savings) Sustaining Practice Transformation External practice transformation support is critical External practice transformation support is critical Transformation team embedded in the state Transformation team embedded in the state Ongoing funding is key Ongoing funding is key Key Considerations

28 28 Care Coordination and Management Providers have opportunity to define the mix and should be held accountable for results Providers have opportunity to define the mix and should be held accountable for results Combination of provider-based, payer-based, and community- based support may work best Combination of provider-based, payer-based, and community- based support may work best Electronic Health Technology is Essential to Success National Committee for Quality Assurance PCMH Level 2 recognition requires electronic health records National Committee for Quality Assurance PCMH Level 2 recognition requires electronic health records Standardized carrier data feeds needed Standardized carrier data feeds needed Link PCMH practices to Health Information Exchange (HIE) initiatives and encourage HIEs to develop tools to support new care models Link PCMH practices to Health Information Exchange (HIE) initiatives and encourage HIEs to develop tools to support new care models Key Considerations

29 29 Enhance primary care functions Enhance primary care functions Enhance coordination by engaging and link providers Enhance coordination by engaging and link providers Develop community health workforce Develop community health workforce Align and link data systems including Health Information Exchanges (HIE) capabilities for clinical management and All-Payer Claims Database for provider efficiency and quality measurement Align and link data systems including Health Information Exchanges (HIE) capabilities for clinical management and All-Payer Claims Database for provider efficiency and quality measurement Evolving Existing Efforts

30 providers 52 sites Level II NCQA Recognition Multi-payer 2500 Maryland providers 300 panels Recognition option CF 100+ providers Up to 10 sites Level II NCQA Recognition CIGNA Approved single carrier programs, meeting defined standards Other programs Community Integrated Medical Home Planning Testing 1.Increase # of transformed practices 2.Increase payer participation 3.Engage communities 4.Standardize quality and efficiency measures 5.Link to broader population health goals Evolving Advanced Primary Care Programs 6 months3 years

31 Respondent Craig Jones, MD Executive Director Vermont Blueprint for Health 31

32 Vermont Experience Blueprint Model Advanced Primary Care Practices Advanced Primary Care Practices Community Health Teams (core, extended) Community Health Teams (core, extended) Multi-Insurer Payment Reforms Multi-Insurer Payment Reforms Health Information Infrastructure Health Information Infrastructure Evaluation and Reporting Evaluation and Reporting Community Self-Management Programs Community Self-Management Programs Learning Health System (support, activities) Learning Health System (support, activities) 32

33 Vermont Experience PCMH Transformation Payment Reform # 1 $PPPM - NCQA score All Insurers Community Health Teams Payment Reform # 2 Shared Costs All Insurers Project ManagementGrantsBlueprint Practice FacilitatorsGrantsBlueprint Self Management Workshops GrantsBlueprint Clinical Registry & Data Quality ContractBlueprint Financial SupportMechanismProduct Evaluation, Analytics, Modeling & Reporting ContractBlueprint

34 Comments and Considerations Is higher payment enough? What supports and infrastructure are important for durable transformation? Is higher payment enough? What supports and infrastructure are important for durable transformation? To what degree can primary care organize more holistic team based services? To what degree can primary care organize more holistic team based services? To what degree can primary care impact total healthcare expenditures and costs? To what degree can primary care impact total healthcare expenditures and costs? Importance and complexity of establishing common attribution and payment methods across all insurers Importance and complexity of establishing common attribution and payment methods across all insurers 34

35 Comments and Considerations What payment or blend of payments lead to effective and sustainable change? Capacity payment/investment Capacity payment/investment Quality based payment Quality based payment Outcomes based payment Outcomes based payment Shared savings Shared savings What will prevail? … savings, savings, savings, or an effective blend of payments and infrastructure investments 35

36 Vermont Experience: What’s in the Works Continued expansion: PCMHs, community health teams, Support and Services at Home (SASH) Continued expansion: PCMHs, community health teams, Support and Services at Home (SASH) Front load community health teams Front load community health teams Data systems and data quality Data systems and data quality Comparative assessments and practice profiles Comparative assessments and practice profiles Hub and spoke (addiction, mental health disorders) Hub and spoke (addiction, mental health disorders) Foundation for next phases of reforms (ACOs, etc.) Foundation for next phases of reforms (ACOs, etc.) 36

37 Questions? Click me to get Q&A box to appear 37

38 The Innovations Exchange  Visit our Web site:  Learn more about Maryland’s Program, Vermont’s Program, and Blueprint Videos Maryland’s Program Vermont’s ProgramBlueprint VideosMaryland’s Program Vermont’s ProgramBlueprint Videos  Follow us on Twitter: #AHRQIX  Send us  Send us 38


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