Last week we reviewed Health and Human Services (HHS) Secretary Sylvia M. Burwell’s January 26, 2015 announcement on specific goals and a timeline for shifting Medicare reimbursements from the traditional fee-for-service (FFS) model to a quality or value-based model. The HHS team is optimistic in achieving its goals, noting in its press release that it has “already seen promising results on cost savings with alternative payment models” through a combined total program savings of $417 million to Medicare due to existing ACO programs. Moreover, it “expects these models to continue the unprecedented slowdown in health care spending.”1
In Sunday’s Super Bowl game, each team had some predictable plays that delivered and some unexpected but practiced, approaches to score that demonstrate their commitment to being flexible and resourceful. Whether we realize it or not, HHS has been acquiring quite a playbook of historically proven cost and value moves.
Typically these programs include measures of clinical process and intermediate outcomes (e.g., Healthcare Effectiveness Data and Information Set [HEDIS] or Joint Commission measures), patient safety measures (e.g., surgical infection prevention), utilization (generic prescribing, emergency department use, length of stay, ambulatory care sensitive hospital admissions), patient experience (e.g., Consumer Assessment of Healthcare Providers and Systems survey, Hospital Consumer Assessment of Healthcare Providers and Systems survey) and, to a more limited degree, outcomes (e.g., readmissions, mortality, complications, total cost of care or cost per episode) and structural elements (e.g., Health Information Technology (HIT) adoption or meaningful use of HIT requirements for CMS incentive payments, National Committee for Quality Assurance certification or patient-centered medical home certification, staffing, inspections). Clinical measures in the ambulatory setting focus heavily on preventive care and management of heart disease and diabetes, while in the hospital setting the focus has been on heart attack, congestive heart failure (CHF), pneumonia and surgical infection prevention. All of these initiatives are like moving the ball slowly and carefully down the field to get some points on the scoreboard.
Historically safe plays may prove to get the job done but it is often the unusual or new approach that sometimes makes the big payoff. Of course, the Patriot’s Malcom Butler’s last second interception when the Seahawks tried something different shows that an unusual choice does not always spell success over the proven approach to the goal line. As HHS sets a 2018 target date, let’s review their scorecard with two innovative programs designed to demonstrate that moving to a quality and value based reimbursement system may result in a future super win for HHS.
HHS announced two wins with the Comprehensive Primary Care (CPC) initiative and the Multi-payer Advanced Primary Care Practice (MAPCP) Demonstration. According to HHS, the CPC initiative, in its first year, decreased hospital admissions by two percent and emergency department visits by three percent, contributing to the reduction of expenditures nearly enough to offset care management fees paid by the Centers for Medicare and Medicaid Services (CMS). The MAPCP Demonstration generated an estimated $4.2 million in savings through the use of advanced primary care initiatives.
With authority from the Affordable Care Act, the CPC initiative is a unique multi-payer partnership between Medicare, Medicaid private health care payers and primary care practices in four states (Arkansas, Colorado, New Jersey and Oregon) and three regions (New York’s Capital District and Hudson Valley, Ohio and Kentucky’s Cincinnati-Dayton region and Oklahoma’s Greater Tulsa region). This initiative includes providing care management for those at greatest risk; improving health care access; tracking patient experience; coordinating care with hospitals and specialists; and using health information technology to support population health. Practices receive non-visit based care management fees from the participating payers and the opportunity to share in savings.
In the first year, 492 practices participated, serving about 345,000 Medicare beneficiaries and more than 2.5 million patients overall. Results from this first year suggest that the primary sources of the savings were reduced rates of hospital admissions and emergency department visits. With over 90 percent of the practices successfully meeting all first-year transformation requirements, the results are very promising; yet it is the first time we have seen results from this playbook so caution should be used in assessing if this is an initiative that will affect long term cost and quality of care.
The MAPCP Demonstration is a multi-payer initiative in which Medicare is participating with Medicaid and private health care payers in eight advanced primary care initiatives in Maine, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Rhode Island and Vermont. Unlike CPC, the states convene the participants and administer the initiatives rather than CMS. Under this demonstration, participating practices and other auxiliary supports (e.g., community health teams) receive monthly care management fees from the participating payers and additional support (e.g., data feedback, learning collaboration, practice coaching).
More than 3,800 providers, 700 practices and 400,000 Medicare beneficiaries participated in the first year. During the first year, the demonstration produced an estimated $4.2 million in savings. Also, the rate of growth in Medicare FFS health care expenditures was reduced in Vermont and Michigan, driven largely by reduced growth in inpatient expenditures. There is less evidence that the state initiatives were able to reduce hospitalization, readmission and emergency department visit rates. Additional findings in this evaluation period include:
- The MAPCP payments provided needed support to help practices transform the way they deliver and coordinate care, including use of nurse care managers or care coordinators, restructuring of staff, improvements in patient flow, adoption of health information technology and more frequent staff meetings.
- Medicare was able to integrate seamlessly with the structure and organization of the eight state initiatives. Medicare’s participation sent a strong signal about the importance of primary care and the potential of these programs, helping to affirm payer and provider commitments.
- Although collecting and using data was a recurring challenge, health information systems facilitated the transformation process.
These first-year results illustrate the potential for steady improvements in the participating practices’ advanced primary care capabilities. CMS anticipates continued improvements as the participating practices deepen and refine their methods of delivering advanced primary care so that patients can continue to receive improved quality and coordination of care.
Yet there is some uncertainty as to how well these payment approaches will work. A 2014 Rand Corporation study funded by HHS concluded, “We still know very little about how best to design and implement [value-based payment] programs to achieve stated goals and what constitutes a successful program.”2 The report reviewed pay-for-performance models implemented over the past decade, and tempered the improvements cited by HHS with a dose of caution—“improvements were typically modest” and often hard to evaluate.
If the HHS reaches its stated goals, such improvements will be a super win for HHS and the American healthcare system.
Article published by MiraMed. To learn more about: MiraMed.
1The January 26, 2015 HHS Press Release can be found at http://www.hhs.gov/news/press/2015pres/01/20150126a.html
Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and is the Vice President of Global Services for MiraMed, a worldwide healthcare BPO company. MiraMed provides solutions to leading hospitals, health systems, large physician groups and industry partners providing services in the areas of revenue cycle optimization, medical coding, clinical authorization and technology integrations. Phil has 25 years of experience as an industry thought leader, strategist, solution provider, author and featured speaker. He has worked closely with some of the industry’s best and brightest leaders in healthcare finance and revenue cycle operations.