New Payor Medical Homes Put More Dollars in Physician Pockets

Friday, February 3rd, 2012
This post was written 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.

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