Analyzing the Successful PCMH: What is Different 16th Annual International Summit on Improving Patient Care in the Office Practice & the Community March 17, 2015 Dallas, TX Amber Carlson, MS, CES Program Manager HealthTeamWorks® Dave N. Gans, MSHA, FACMPE Senior Fellow, Industry Affairs Medical Group Management Association

Learning Objectives ihi.org/Summit This session will provide you with the knowledge to: Describe how a PCMH differs from a traditional primary care practice in panel size, level of staff support, and new forms of patient communication Detail the revenue impact of new payment models on PCMH and non-PCMH primary care practices Identify the demographic profile, staffing level, provider productivity model, and reimbursement method of PCMHs with the best financial performance What do you want to accomplish with today's presentation? ihi.org/Summit

What Is a Patient Centered Medical Home? The Patient-Centered Medical Home is an approach to providing comprehensive primary care for children, youth and adults. The Patient-Centered Medical Home is a health care setting that facilitates partnerships between individual patients, and their personal physicians, and when appropriate, the patient’s family AAFP, AAP, ACP, AOA ihi.org/Summit

Transforming a Primary Care Practice to a PCMH The practice’s EHR is used not only for its medical record capabilities but also as a quality tool and to schedule preventive services for individual patients Patient registries are used to evaluate and improve the health status of patient populations Hours are expanded to facilitate patient access Electronic communications with patients is common Patient education and patient self management of chronic disease is emphasized The patient and family are engaged to accept personal responsibility for care Each of these changes incurs a cost for the PCMH practice Insert story of practices not understanding it is a process vs a destination and how it effects everything they do ihi.org/Summit

The Benefit of Being a PCMH Aggregated outcomes from the 28 peer-reviewed studies, state government program evaluations, and industry reports: 17 found improvements in cost 24 found improvements in utilization 11 found improvements in quality 10 found improvements in access 8 found improvements in satisfaction ihi.org/Summit

PCMH Transformation ihi.org/Summit Meeting the accreditation / recognition standard Additional infrastructure Enhanced electronic health record and registries Enhanced telecommunications Larger clinical facilities to accommodate new functions  Additional services Nutrition counseling Patient education Care coordination for referrals and hospital discharge Chronic care management Mental health counseling Expanded access Story of practice doing an assessment and identified they needed a CAC vs a general behavioral health person Story of practice utilizing Exercise Physiologists to address nutrition and exercise and some other general care management pieces ihi.org/Summit

Cross Sectional Comparison of PCMH and Non-PCMH Primary Care Practices MGMA Cost Survey – 2014 Report based on 2013 Data Electronic questionnaire of MGMA members and customers in April 2013 2,518 total responses 215 hospital owned primary care and multispecialty participants (67 PCMH and 160 non-PCMH) 141 independent primary care and multispecialty participants (30 PCMH and 101 non-PCMH) MGMA Patient-Centered Care: 2012 Status and Prospects Report Electronic questionnaire of MGMA members and customers in February 2012 1,257 total responses 657 primary care practices (244 PCMH and 393 non-PCMH)

FTE Staff per FTE Physician Story of Cigna looking at 2 MA’s per physician to increase productivity Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

FTE Staff per FTE Physician Story of the value of looking at the type of staff you really need: San Joaquin hiring an admin person to help in the back for reporting and tracking of items to increase efficiency, continuity of care and care coordination Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Productivity per FTE physician Median Panel Size: 2,063 2,400 Median Work RVUs: 5,007 6,447 Median Square Feet: 2,008 1,827 PCMH Not a PCMH Story around design of a practice space – POD vs traditional model (Cigna example) Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

How Staffing Changed as a Result of Becoming a PCMH *Maybe move the story of San Joaquin here… Percentage of respondents answering "Mild increase" or "Considerable increase“ Source: MGMA Patient Centered Care - 2012 Status and Needs Study ihi.org/Summit

New Functions for Patient-Centered Care *this is going to look different in each practice based on size. Care manager example from large to small system Source: MGMA Patient Centered Care - 2012 Status and Needs Study ihi.org/Summit

How Expenses Changed as a Result of Becoming a PCMH Percentage of respondents answering "Mild increase" or "Considerable increase“ Source: MGMA Patient Centered Care - 2012 Status and Needs Study ihi.org/Summit

Comparing Revenue and Expenses per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Comparing Expenses per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Comparing Revenue and Cost per Patient per Year Source: MGMA Cost Survey: 2014 Report Based on 2013 Data Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

How PCMH Practices Are Paid Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Type of PCMH Payment Impact on Total Medical Revenue * Insufficient data Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Proposed Medicare Payment for Chronic Care Management Services 2015 Medicare Fee Schedule Final Rule “As we discussed in the CY 2013 PFS final rule with comment period, we are committed to supporting primary care and we have increasingly recognized care management as one of the critical components of primary care that contributes to better health for individuals and reduced expenditure growth (77 FR 68978).” “In the CY 2014 PFS final rule with comment period, we finalized a policy to pay separately for care management services furnished to Medicare beneficiaries with two or more chronic conditions beginning in CY 2015 (78 FR 74414).” Federal Register Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2015, Pages 442 – 496 http://federalregister.gov/a/2014-26183 ihi.org/Summit

Creating CPT 99490, Chronic Care Management Services CPT code 99490 (Chronic care management services) at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements: Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; Chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; Comprehensive care plan established, implemented, revised, or monitored ihi.org/Summit

Payment for CPT 99490 May Provide Additional Revenue for PCMH Even if a practice is not paid for being a PCMH per se, it can benefit by providing CCM services CMS has established a payment rate of $40.39 for CCM that can be billed up to once per month per qualified patient http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-10-31-7.html ihi.org/Summit

Understanding Profit and Loss in Physician and Hospital Owned Practices In Physician-Owned Practices Physician Compensation Revenue Costs Operating Loss or Gain In Hospital-Owned Practices Physician Compensation Revenue Costs Subsidy from Parent Operating Loss or Gain ihi.org/Summit

Defining a “Successful” Physician Owned Medical Group Greater than 50th Percentile for Total Physician Compensation and Benefit Cost per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Defining a “Successful” Hospital Owned Practice Total Net Income Excluding Financial Support per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Staffing Levels in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Total Medical Revenue in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Total Operating Cost in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Total Physician Compensation and Benefits in Successful PCMH Practices ihi.org/Summit

Total Physician Compensation and Benefits in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Net Profit or Loss in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Provider Productivity in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Cost per Total Relative Value Unit in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Payer Mix in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

PCMH Payment Method in Successful PCMH Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data ihi.org/Summit

Common Themes in Successful Hospital and Physician Owned PCMH Productivity matters Operating costs and staffing levels may be greater if the result is increased productivity Payer mix has a minor financial impact PCMH reimbursement has a direct impact

In the Future, the Successful Practice Needs to Balance Value and Costs Both financial and non-financial metrics are needed Payment and quality incentives should be the basis for quantifiable metrics The practice’s information system will need to aggregate data from multiple sources and time periods Quality Patient Experience Revenue Production Expense Outcomes ihi.org/Summit

In the Future Healthcare Environment You Need the “Right Stuff” An environment of accountable care and value based payment will reward practices who have: Lower utilization Better quality Better patient satisfaction Better patient outcomes Lower cost to the insurer Which perfectly describes the successful Patient-Centered Medical Home

Are There Any Questions? Amber Carlson, MS, CES HealthTeamWorks® Program Manager acarlson@healthteamworks.org www.healthteamworks.org 303.446.7200 David N. Gans, MSHA, FACMPE Senior Fellow Industry Affairs Medical Group Management Association® dgans@mgma.org www.mgma.org 303.799.1111 x1270