Advanced Primary Care Compensation Models

Copyright © 2021 by SullivanCotter

Advanced Primary Care

Compensation Models

October 14, 2021


SullivanCotter Presenters

1

Mike Gizzi

Consulting

Manager, Physician

Workforce

mikegizzi@

sullivancotter.com

765.233.9403 404.915.0277

Kevin Wilson

Managing Principal,

Physician

Workforce

kevinwilson@

sullivancotter.com

734.377.1826

Jason Tackett

Managing Principal,

Physician

Workforce

jasontackett@

sullivancotter.com


Webinar Instructions

2

• Today’s session will include approximately 1 hour and 40

minutes of presentation and additional time for questions

• How to submit questions:

– Use the control panel on the right side of

your screen

– Type your question at any time during the webinar and

click “SEND”

– If you’re on a mobile device, click on the question mark

icon and follow the same steps

– Panelists will answer as many questions as possible

during Q&A time

All attendees can access the slide deck via the Converve platform

Copyright © 2021 by SullivanCotter 3

Agenda

1Value-Based Care:

Driving Today’s Market

Dynamics

Evolution of Primary

Care Compensation

Plans23

Panel Discussion45 Q&A

Advanced Compensation

Approaches


Value-Based Care:

Driving Today’s Market Dynamics

4


Market Dynamics Accelerating Value-Based Care

• Continued support for

alternative payment

models

• Revised physician self

referral and anti-kickback

regulations

• Relaxed telehealth

regulations during public

health emergency

• New tools that can

scale access for

physicians, patients and

affect market share

• Consumer demand for

telehealth and home-

based care

• Commercial payors

adopting site-neutral

payment to mange costs

• Patients looking to reduce

out-of-pocket costs are

likely to avoid inpatient

care locations

• Rise in chronic disease

that requires focused

care management to

ensure quality outcomes

• Vulnerable populations

that benefit from high-

touch programs

Market

Dynamics

Site-Neutral Policies

Aging Population

Federal Government

Initiatives

Digital Health

Adoption

National Physician Shortage

• The U.S. could face a shortage of

37,800 to 124,000 physicians by 20341

5

1Source: Association of American Medical

Colleges (June, 2021). “The Complexities of

Physician Supply and Demand: Projections

From 2019 to 2034”. Accessed at

https://www.aamc.org/media/54681/download


Risk Continuum

6

Small

Financial Risk

Moderate

Financial Risk

Large

Financial Risk

Tiered

Networks Full RiskACOsValue-Based

Incentives

+Pay-for-

Performance

Fee-For-

ServiceBundled

Payments

Copyright © 2021 by SullivanCotterCopyright © 2021 by SullivanCotter 6

CMS and CMMI, the Medicare Innovation Center, have developed value-based care (VBC)

program options across the risk/reward spectrum, allowing providers to enter VBC

arrangements according to their readiness and appetite for risk management

Medicare Value-Based Care Landscape

Medicare Payments Tied to

Alternative Payment Models

Upside Only

(MSSP A/B)

Pay-for-

Performance

(MACRA, MIPS)

Upside /

Downside

(MSSP C/D)

Primary Care

Models

(CPC+, PCF)Bundled

Payments

(CJR, BPCI-A)

Shared Savings

APM

(MSSP Enhanced)

Total Cost of

Care

(NextGen ACO –

Sunset Dec ‘20)TCoC +

Capitation

(Direct Contracting

- Upcoming)

Risk / Reward Spectrum

Advanced Alternative Payment Models

(Eliminate MIPS Reporting)

4.5%

Population Based Payments

51.2%

Pay-for-Performance

33.8%

Shared Savings & Bundles

10.5%

Traditional Fee-For-Service


Population HealthOverview of CMS’ Primary Care First Program

8

‘Primary Care First’

Payments

• Professional

population-based

payments and flat

primary care visit fees

to help practices improve

access to care and

transition from fee-for-

service to population-

based payments

• Performance-based

threshold (Quality

Gateway) for each

measure

(up to 5 measures;

30th percentile)

• Upside/downside

adjustments based on

quality outcomes

Source: https://innovation.cms.gov/files/slides/pcf-info-webinar-series-slides.pdf

Population-Based Payment

• Payment for service inside or

outside of office – adjusted for

practices caring for higher risk

populations

• This base rate is the same for all

patients attributed to this practice

• Payment will be reduced through

calculating a “leakage adjustment” if

beneficiaries seek primary care

services outside the practice

Flat Primary Care Visit Fee*

• Payment for in-person

treatment applied as a fixed

amount to most face-to-face

and home visits

• These payments allow practices

to easily predict payments for

face-to-face care

• Beneficiary cost sharing will

apply and follow traditional

FFS rules

Note: All model payments are also subject to

geographic adjustment, MIPS adjustment, and

2% Medicare sequestration, as required by

federal rulemaking

Practice Risk GroupAverage hierarchical

condition category

PaymentPer beneficiary

per month

Group 1: <1.2 $28

Group 2: 1.2-1.5 $45

Group 3: 1.5-2.0 $100

Group 4: >2.0 $175

Base RatePer face-to-face encounter

$40.82

Copyright © 2021 by SullivanCotterCopyright © 2021 by SullivanCotter

Organizations need to change the way they operate and deliver care

in order to move along this continuum

Fee-For-

Service

(FFS)

Varying

percentages

of FFS and

Risk

Risk

(value)

• Population health

management (PHM)

• Triple aim

accountability

• Better care

• Highly reimbursed

services supported

(radiology, lab, etc.)

• Primary care support

and management

• Volume

• Rewards individual

productivity

• Potential provider

burnout

Primary Care continues to serve as a primary focal point to support

population health initiatives

Volume to Value: Striking the Right Balance

9


Core Competencies to Effectively Manage Risk

10

Business Model

Alignment

Enhanced Care

Delivery

Consumer and Provider

Engagement

Operational

Excellence

• PHM readiness

assessment

• PHM opportunity

analysis

• Value-based contracting

• Value-based benefit

design

• Revenue management

• Care delivery model

development

• Medical care

management program

• Pharmacy care

management program

• Quality improvement

program

• Organization and

governance

development

• Provider incentive

program

• High performance and

network development

• Performance

measurement structure

development

• Consumer engagement

program(s)

• Practice transformation

• Actuarial/underwriting

• Marketing/sales

• Enrollment/attribution

• Infrastructure

• Claims payment/

customer service

• Compliance and audit

• Provider-payer

contracting


Population Health Management Strategies Potential Barriers to Success

11

Misalignment between

PHM and overall strategy

Operational limitations and

lack of coordination of services

Undefined Key

Performance Indicators

Too few payor partnerships

or arrangements

Constrained resources,

scale and time

Limited or inconsistent

physician engagement

Common setbacks or poor performance may occur when a health system or organization does not invest properly in PHM program design, incentive alignment and governance


Optimizing the Clinical WorkforceGrowth in Physician and APP Staffing | Shift to Team-Based Care

12

Optimize

health between

visits

Check-in to

room time

Patient

scheduling

Pre-visit

planning and

preparation

Total visit

time

Post-visit timing,

test results and

follow-up

scheduling

Care Continuum

Advanced

Practice

Provider

25.1%

Physician/APP Staffing GrowthIncrease in Median FTEs: 2018 to 2020

AMCs and Pediatric Hospitals

Physician

3.4%

Growth in the APP workforce is significantly

outpacing physician growth, driven in part

by supply / demand

Source: AAMC/SullivanCotter Report on Compensation

Methodologies in Top Academic Medical Centers (n=18)

Potential Organizational Benefits

• Supports higher levels of patient access

• Promotes enhanced consumer experience

• Enables an increased focus on higher acuity patients

with their needs throughout the continuum

• Reduces clinician burnout

Support Physicians and APPs

Practicing at Top of License


Polling Question

13

• Yes, to some degree

• No

Are your physicians and advanced practice

providers prepared for change?


Polling Question

14

• Yes

• Currently assessing

• Planning to assess in the future

• No

• Not sure

Has your organization assessed performance and internal

competencies for value-based care?


Evolution of Primary Care

Compensation Plans

15


Current Compensation Plan ComponentsPrimary Care Overview

16

Prevalence of Plan Components

Source: SullivanCotter 2019-2021 Physician Compensation

and Productivity Survey Report, SullivanCotter 2021 Large

ClinicTM Physician Compensation and Productivity Survey

Report

55%

79%

70%

28%

36%

74%

67%

55%

17%

12%

Base Salary

wRVUs

Value/Quality

Discretionary

Panel Size

Large Clinic® Organizations Non-Large Clinic® Organizations90.3%

9.7%

Plan Components Percentage of TCC

Plans without

base salary

component

Plans with

base salary

component

75.7%

20.4%

3.9%

Base Salary

Productivity Incentive

Value/Quality Incentive

Median Quality Incentive PaymentsPercentage of TCC

6.4% 7.4% 6.2%


Evolution Toward Population HealthPrimary Care Future State

Health system revenues are shifting from fee-for-

service wRVU productivity to risk-based arrangements

90%

80%

50%

0%

10% 10% 20%

50%

0%

10%30%

50%

Volume-Driven Transitional Value-Based Population Health

wRVUs Quality/Outcomes Risk-Adjusted Panel

Quality / Outcomes

• Patient satisfaction

• HEDIS

• Core measures

• Patient cost efficiency

• Care management

• Patient access – growth

• Adherence to protocols

• Service line efficiency

Shift from wRVUs to Population HealthExample

Well-designed physician compensation plans align

compensation rewards with health system risk strategy to

help attain results in patient outcomes and financial performance

17


Design TrendsIntegrating Compensation Approaches for Physicians and APPs

Organizations are increasingly redesigning physician and APP compensation

plans simultaneously, with an emphasis on teamwork and collaboration

Aligned plans

may include:

• Similar plan structure

and incentives

• Aligned performance

and quality metrics

• Team incentives in addition

to individual incentives

• Common governance /

oversight

Physician

Compensation

Clinical

Workforce

Compensation

APP

Compensation


Team-Based Care Compensation Design Trends

19

Source: SullivanCotter 2021 Physician Compensation and Productivity Survey Report

Percentage of organizations

utilizing a team-based

component in physician

compensation plans

25%

47%

Percentage of organizations

including APPs as part of the

team-based component in

physician compensation plans

Overall average percentage of

annual physician

compensation tied to team-

based care goals

9.6%

Primary Care: 7.1%

Specialist: 12.0%

Hospital-Based: 12.7%


Team-Based Compensation Plan ExampleShared Panel Management and Quality Goals

Base Salary

80% to 90% of

total cash

compensation

Physician

Compensation

Risk-

Adjusted

Patient

Panel

Combined

physician

and APP

wRVU

Productivity

Individual

Quality and

Patient

Experience

Shared metric

and goal

Team-Based

Components

APP

Compensation

Base Salary

90% to 95% of

total cash

compensation

wRVU

Productivity

Individual


Patient Panel Management SurveyKey Findings

SullivanCotter conducted a custom survey of health care organizations

in the Large Clinic® Group to understand their perception of panel

management metrics and incentives

Source: SullivanCotter 2020 Large ClinicTM Group Patient Panel Management Survey

Key Findings

• The percentage of revenue tied to value-based contracts and capitated

payments is expected to increase 67% over the coming years

• 77% of participants identified panel management as either

"important" or "extremely important" to organizational operations

and strategic initiatives

• Only 45% of administrators believe their organizations are calculating

panel size with a strong degree of accuracy

• Only 30% of physicians believe their organizations can report panel size

with a strong degree of accuracy


93.3%

90.0%

86.7%

66.7%

63.3%

60.0%

60.0%

40.0%

10.0%

Improved Access

Improved Outcomes

Alignment w/ Major Payer Incentives

Favorable Patient Experience

Assist In Optimizing Staffing Decisions

Cost Savings

Increased Efficiency

Reduced Waste

Other


Patient Panel Management Survey

Key Goals for Successful Panel Management



Patient Panel Management Survey

17.3%

27.6%

41.4%

10.3%

0.0%

3.5%

6.7%

23.3%

26.7%

33.3%

3.3%

6.7%

Extremely Accurate

Very Accurate

Moderately Accurate

Slightly Accurate

Not at All Accurate

No Answer

Administrators Physicians and APPs

Perception of Accuracy of Panel Size Calculations


Median Panel Size Primary Care Specialties

24

INSERT

Source: SullivanCotter 2019-2021 Physician Compensation and Productivity Survey Report

SullivanCotter 2019-2021 Advanced Practice Provider Compensation and Pay Practices Survey Report

Three-Year Rolling Average

Primary Care APPs: Three-Year Average Median Panel Size is 1,177

Family Medicine

2019 2020 2021

Internal Medicine

2019 2020 2021

Pediatrics - General

2019 2020 2021

1,8411,825

1,728

1,908 1,904

1,791

1,9301,906

1,863


Polling Question

25

• Yes

• No, but we are planning to

• No plans to include in the near-term

Have you included a team-based component

in your primary care compensation plan?


Polling Question

26

• Yes

• No, but we are planning to

• No plans to include in the near-term

Do you use panel management as one

component in your primary care compensation plan?


Beyond Compensation and Potential Future Plans

Advanced Compensation Approaches

27


Thinking Beyond CompensationPreferences, Core Performance, Measurement and Reporting

28

Core expectations and value-based performance can be supported

by performance management processes and tools beyond the compensation plan

Supporting

Team/Value-Based

Performance

• Documentation

• Quality/service

• Patient access

• Telehealth utilization

Provider

Preferences

• Work/life balance

• Pay structure

• Resources

• Preferred measures

Performance Management

• Defining core performance

(documentation, professionalism)

• Circuit-breaker feature when core

performance expectations are

not met

• Formal performance reviews

• Professional development goals

• Leadership development

programs/mentoring

• “Best practice” reporting

• Performance improvement plans

Physician and APP input on core performance expectations,

value-based performance categories, targets and metrics

Sample Scorecard:

Patient ExperienceSullivanCotter’s Provider Performance

Management Technology™


Themes from Physician Preferences Survey

29

75% or more of respondents agreed that their current primary care compensation

plan is not appropriately designed for the future of the health care industry

Redefining a high-performing

provider; recognizing

contributions beyond

wRVU productivity

Work-Life Balance

Emerging as a

Top Priority

Majority of physicians prefer a

structure with more

guarantee and less at-risk

incentive; physicians/APPs

desire minimum standards

tied to base salary

Desire to Improve

Salary Stability

Hours worked, wRVUs and

patient encounters were

preferred as top factors; panel

size tends to be mixed and

dependent on measurement

capabilities

Mixed Productivity

Measures Preferred

Low confidence in measuring

panel size (typically 20%) with

attribution a high concern

Opportunities to

Improve Measurement

Systems

Well over 50% indicate

insufficient resources to

attain goals; frequently cite lack

of staff; dissatisfaction with

compensation administration

process is typically cited

(timely data)

Level of Resources

Can Influence

Satisfaction

Majority prefer quality

incentives structured at the

individual level; however,

majority state current

compensation plan does not

support team performance

Value-Based and

Team-Based Measures


Examples of Recent Value-Based Metrics

Type Measure

Individual

MIPS eCQM 47 Advanced Care Plan (patients 65+)

Percentage panel w/SdOH screening (all domains)

Patient satisfaction: Press Ganey care provider rating /

top box score

Various clinical integration measures from HEDIS (e.g.,

PCMH metrics, controlling high blood pressure)

Completing Medicare annual wellness visits

Building and documenting care plan for all chronic health

conditions (RAF point capture)

Closing gap on HCC and RAF deficiencies

Tied to achieving level for patient panel (> 100) under

specific payer

DivisionTelehealth utilization

Percentage of new patients


Outcome: Increase in patient access by physicians and APPs working together to

expand a shared panel while maintaining a focus on physician wRVU productivity

Patient AccessCompensation Plan Supported By Performance Management and Reporting

31

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

wR

VU

s: M

ark

et P

erc

en

tile

Panel Size: Market Percentile

wRVUs v. Panel Size (Percentile Ranks)

OSF Physicians

High wRVU Productivity +

High Panel Size =

Greater Patient Access

to Care

Panel Size Definition:

The number of patients

served by a physician or

physician group

• Defined as a count of the

unique living patients seen

(typically within the last

18 months)


Future StatePotential Impact of Full Risk Contracts on Primary Care Compensation

32

Evolving from Fee-For-Service to Full Risk

Fee-For-

ServiceGlobal

Payment

Episodic

Bundling

Full Risk/

% of

Premium

Total CostEpisodic Cost

Pay-For-

Performance



33

Maximizing reimbursement through accurate HCC coding and RAF capture

$6,500Target MLR

$6,000Actual MLR

Difference

between

target and

actual MLR

= $500 PMPY

Scenario 1: RAF = 1.0

$8,000Target MLR

$6,000Actual MLR

Scenario 2: RAF = 1.3

Difference

between

target and

actual MLR

= $2,000 PMPY

Target Medical Loss Ratio

(MLR)Dollar amount organization receives

from payer for total cost of care

Actual MLRDollar amount an organization

actually spends on providing care

Difference Between Target

and Actual MLRBasic to high levels of specificity in

the care plan and RAF capture can

result in millions in PMPY profit

across a patient population

Difference Between Target and

Actual MLR


Expense/InvestmentStepsCritical Success

Factors


34

Increased profit margin allows for greater shared incentives

after consideration of all expenses

• Educate clinicians

and teams

• Identify patient population

• Outreach and

schedule visits

− Consider reporting /

capture time frame

• Document care plans with

accurate coding

• Audit for accuracy

• Staff

− Coders

− Nurses

− Dieticians

− Social workers

− Pharmacists

− Health coaches

− Case manager

− Palliative

• Practice overhead

• Telemedicine

• Reinsurance

• Administrative fees

• Compensation

• High quality

• Member retention

• Documentation/coding

• Reducing total cost of care

− Readmissions/ED

avoidance

− Disease management

− Preventative care

• Patient engagement

• Patient access

• Health equity


Polling Question

35

• Yes, we recently redesigned our plan

• No, but planning to address in the near-term

• No, no plans at this time

Would your primary care providers agree that their compensation

plan(s) is appropriately designed for the future of health care?


Polling Question

36

• No, current state and readiness are top priorities

• Yes, basic physician scorecards and monitor performance

• Yes, sophisticated analytics, advanced PC compensation

Is your organization making significant investments

in population health performance management

and operational excellence?


Key Takeaways

37

1Collect data to uncover the

increasing levels of compensation

tied to panel management

2Conduct education on the

advantages of using panel

incentives for physicians and APPs

3 Determine the organization’s

risk-adjustment methodology

4Consider different ways physicians

and APPs can work together for an

effective team-based approach

5

Evaluate incentive metrics to

ensure alignment with

organizational strategy, culture

and contracting objectives


Panelist Discussion

38


Panelists

39

Dr. Martinson Arnan

Vice President, Chief

Clinical Officer

Bronson Medical

Center

Alex Jackson

President & Chief

Operating Officer,

MultiCare Rockwood

Clinic

MultiCare Health

System

Anne Hunsaker

Vice President –

Physician

Compensation & APP

Alignment

Mercy

BRONSON HEALTHCARE

RISK READINESS

Martinson Arnan, MD, Vice President, Chief Clinical Officer

Copyright © Bronson Healthcare


Bronson Healthcare

• Regional, not-for-profit health system

• Locally owned and governed

• Serving southwest Michigan since 1900

• 8,400 employees

• 1,500 medical staff

• 4 hospitals: Battle Creek, Kalamazoo, Paw Keep age and South

Haven

• 796 licensed beds: 648 acute care, 49 psych/gero-psych, 100

skilled nursing

42


Bronson’s Service Area

43


History & Current Structure

• Providers: 604

➢ 122 PC MD/DOs

➢ 66 PC APPs

➢ 409 Specialists

• Care Team:

➢ Care Management

➢ MSW

➢ Pharmacist

• TINs: 4

• Medicare Beneficiaries: 14,300

• Participation in Affirmant/Federation ACO since 2015

Medical Group

Clinically Integrated Network

• Operations• Performance• Growth • Access

• Legal Structure for Independent Providers

• Practice Support• Population Health Analytics• Value Based Reimbursement

Strategy ⚫ Systemness ⚫ Standardization

44


Bronson’s Strategic Aims

PEOPLE QUALITY SERVICE COST

Strategic Aims ❑ Strive for zero

preventable harm

Develop data infrastructure & systems to support equity

❑ Improve access ❑ Improve operating margin

❑ Reimagine our work, workforce & workplaces

❑ Recruit, develop & retain a workforce that reflects our communities

Reliably provide safe, equitable outcomes that matter most to

our patients

Uncover and address disparities that impact the health and wellbeing of our patients, employees and communities

1

2

3 5 6

4

Cultivate a diverse, equitable, engaging and inclusive

environment where all can thrive and excel

Together We Advance the Health of Our Communities

Mission

Exceptional Experience for Every Person Every Time

Vision

Compassionately provide timely and convenient services

Efficiently provide careat a predictable cost

45


Affirmant/ Federation ACO

(Track B)

Priority/Affirmant Medicare Advantage

(up & down)

Primary Care CPC+ Practices

(upside)

Primary Care First Practice

(up & down)

2016 – Current 2017 – 2021 2017 - Current Jan. 2021 - Current

14,300 beneficiaries

10,200 beneficiaries

11,000beneficiaries

650 beneficiaries

Value-Based Care Arrangements

86.4% 86.4%82.7%

76.5%

85.6%

2017 2018 2019 2020 2021*

Bronson/Priority Health MAMLR History

97%

53%

Primary Care

Received VBR

Speciality Provider

Received VBR

Payer Incentive ProgramsPGIP/PRP/PIP

*Dates of Service 01/01/21 – 03/31/21 with claims run-out May 2021

46


There are many important and

necessary components of a

successful value-based care model

Analytics and reporting

Incentive alignment and compensation design

Physician engagement and training

Care team optimization

Governance structure and leadership

Change management

Financial models/flow of funds

VBC Contract management

Operations and performance

Partnerships and alignment

Value-Based Care StrategiesEvaluating Key Elements of a High-Functioning PHM Model

47


Bronson and VBC Going Forward

Bronson will focus on four primary areas to ensure enhanced success along the VBC journey. These areas

do require near-term action, engagement and investment by administration and providers.

Care Management

Optimize outpatient Care

Management. Reinvest

in and redesign care

management to deliver

seamless, integrated

services to drive

enhanced outcomes for

beneficiaries. Focus on

the patient is our goal.

Provider Network and

Incentive Alignment

Develop a strategy that

advances the entire

Bronson Provider Network,

physicians and APPs as a

high-performing,

comprehensive continuum

of care. Enable providers to

achieve success and optimal

performance.

Technology and

Intelligence Enablement

Establish a VBC technology

and intelligence platform;

improve ability to use

technology and informatics

to support value-based care

and population health

initiatives for the residents

that Bronson serves.

VBC Operational

Governance

Integrate a VBC / PHM

governance process and

team within broader system

governance to ensure

progress, consistency and

performance with VBC

initiatives. Executive,

physician and APP

leadership will drive this

team.

48


Primary Care Incentive Structure

Eligible incentive compensation based on value-based metrics

Value-Based Care Readiness and Performance

49

Quality Access

• Aligns with clinically integrated network metrics with focus on:

‒ Preventative care

‒ Managing chronic conditions

• Performance improvement metrics

• Patient Experience

• Accepting new patients

• Non-traditional office hours

• Participate in virtual access/visits

• Panel size (risk adjusted)


Thank you!bronsonhealth.com

50


MultiCare: Primary Care

Alex Jackson

President & Chief Operating Officer, MultiCare Rockwood Clinic

Copyright © 2021 MultiCare

MultiCare At A Glance

52


Our Mission

Partnering for healing and a healthy future

53

Our Vision

We will be the Pacific Northwest’s highest value system of health

• Leading as a people-centric community asset

• Integrating a full continuum of high-performance, customer-focused health and health

related solutions

• Delivering world class health outcomes and exceptional experience at a competitive price


Our Values

Respect• We affirm the dignity of each person and treat each individual with care and compassion

Integrity

• We speak and act honestly to build trust

Stewardship

• We develop, use and preserve our resources for the benefit of our customers and community

Excellence

• We hold ourselves accountable to excel in quality of care, personal competence, and operational performance

Collaboration

• We work together recognizing that the power of our combined efforts will exceed what we can accomplish individually

Kindness

• We always treat everyone we come into contact with as we would want to be treated

54


MultiCare’s Strategic Priorities

Performance Excellence

• Top decile performance people, quality, service

• Bottom quartile performance on total cost of care

• Top quartile on margin

Expanding Access to Care and Services

• Continuing to grow existing services

• Adding new programs and services

• Expanding into new geographies and sites of care

Population-Based Care

• Innovate access

• Transform care delivery

• Engage patients

• Redesign the business model

55


• Our heritage dates back to the founding of Tacoma’s first hospital in 1882

• MultiCare is an independently owned, non-profit organization governed by a local board of directors

• Today we care for patients across the Puget Sound (PSR) and the Inland Northwest (INW)

• We believe care is better local – in our patients’ homes and communities

56

MultiCare Overview


Primary Care Redesign: Objectives

57

MultiCare is creating a next generation physician and advanced practice provider (APP) compensation strategy that aligns with the future of health care

Consistency

Population Health Market Competitive

• Align framework (common approach) across locations and providers (physicians and APPs)

• Support provider behaviors that focus on outcomes

• Improve patient access

• Lower cost of care

• Support recruitment and retention

• Adhere to applicable regulations

Team-Based Care

Financial Sustainability

Adaptability

• Remove barriers to team-based care

• Ensure appropriate and adequate access for patient population

• Align with current and future reimbursement

• Adapts to market changes, e.g., population health, fee for service, other market conditions

Objectives should be aligned with MultiCare’s compensation Guiding Principles


Physician and APP Compensation Guiding Principles

58

MultiCare seeks to provide equitable, market competitive compensation that:

Rewards multi-dimensional performance (as detailed below), aligned with MultiCare’s strategic objectives

• Supports population health through responsive, patient-centered, collaborative care, increased patient access, and value-based metrics

• Promotes innovation in care delivery and results in improved patient outcomes

• Is flexible with the changing healthcare environment, considering the manner in whichproviders practice today and in the future

• Supports recruitment and retention of top provider talent and provider satisfaction

• Is transparent, adheres to all regulatory requirements and is easy to understand, administer and report

• Promotes financial responsibility, effective resource utilization, and is aligned with current reimbursement practices

MultiCare compensation plans are structured to support a win for patients, a win for providers and a win for the organization


Population Health: Why now and is it here to stay?

• In 2018, Federal Gov’t spent 24% of $4.1 trillion dollar budget on Medicare & Medicaid. National Debt $28T.

• By 2025 CMS committed to capitating 100% of payments to insurers and providers to control spending and incentivize population-based care.

• Medicare Trust Fund projected to be insolvent 2024.

• Washington State Budget Healthcare spending increased from 28% to 38% over past decade.

Value-Based Agreement: 2020 Highlights• VBA contract provide access to lives = 290K+ lives

• FFS Revenues associated with VBA contracts = $1.7B

• Total Cost of Care Full Risk Contracts $1B

• 2020 VBA Revenues est. $22.7M

• 2020 Medicare Shared Savings Program Savings est. 4% associated with 35K lives


MultiCare Current Compensation Plans

MMA, Mary Bridge, Rockwood Clinic

60Copyright © 2021 MultiCare

Current State: Primary CareFour Plan Types Across Multiple Locations

Clinical Cash Compensation

wRVU Productivity

Three tiers determined as a

percentage of median TCC per

wRVU rates

Gateway

Coding Accuracy

Mandatory Education

Meeting Attendance

Chart Closure

Value-Based Incentive

Meets/Exceeds for Quality and Patient Sat

Other work and Wellness based on hours

Gateway Applies

Value-Based Metrics

Quality Up to 4% individual and 2% group

Patient Experience up to 4%

Other MMA Work/Wellness up to 5%

Additional Stipends: APP Supervision, Virtual Visits

MMA/MB: Physicians


Base Salary

100% of Median

Blended Survey Data

Gateway

Coding Accuracy

Mandatory Education

Meeting Attendance

Chart Closure

Value-Based Incentive

Meets/Exceeds for Quality and Patient Sat

Other work and Wellness based on hours

Gateway Applies

Value-Based Metrics

Quality Up to 2% individual/group

Patient Experience up to 1.5%

Other MMA Work/Wellness up to 1.5%

* Eligibility. .5 FTE or greater. Not on guarantee. Employed before Sep 1st and on Dec 31st

wRVU Productivity Bonus

Tiered (14) Bonus Comp.

Based on Annual Survey data

MMA/MB APPs: (ARNP/PA)


wRVU Productivity

Compensation per wRVU

at % of Median

Gateway

Conflict of Interest Form

Mandatory Education

Meeting Attendance

Chart Closure

Panel Compensation

$ per unique patient seen in 18

month lookback period

Age/Gender Adjusted

Value-Based Metrics*

Up to 5% of Productivity Compensation

Quality: 2%, VOI/CMP: 1% FM/IM, 2% Peds

HMV : 1% for FM/IM, Citizenship: 1%

* Eligibility 0.5 FTE or greater. Not on guarantee. Employed before July 1st and on Dec 31st

Additional Stipends: APP Supervision


Base Salary

100% of Median

Blended Survey Data

Gateway

Conflict of Interest Form

Mandatory Education

Meeting Attendance

Chart Closure

wRVU Productivity

Compensation per wRVU

above Survey Median

Value-Based Metrics*

Fixed Dollar Amount

Quality, VOI/CMP, Citizenship

* Eligibility: 0.5 FTE or greater. Not on guarantee. Employed before July 1st and on Dec 31st

Additional Stipends: APP Supervision

RWC: Physicians RWC: APPs (NP/PA)


Primary Care Compensation Redesign

Development of a Common Physician and APP Compensation Framework

62Copyright © 2021 MultiCare

The Journey

63

Objective of the Design Process

Support an inclusive and collaborative process allowing input from Physicians and APPs from all locations in the development of a common framework across MultiCare

Project Phases

Discovery Phase(January – March)

Design Phase(April – May)

Model Refinement(June)

Scope

All Primary Care Providers

Phys ≈ 200 APPs ≈ 100

MMA • Mary Bridge • Rockwood Clinic

• Developed and refined a go-forward

Framework/Model from which

MultiCare will define the final

compensation plan

03

01

This is a sample text.

This is a sample text.

• Developed six compensation

frameworks with varying structures

• Completed iterations with optional

components and weighting

• Preferences Surveys

• Three design meetings with

compensation component and

minimum standards polling


Provider Preferences

64

Main themes emerged through the Provider Preferences Surveys and Design Advisory Team feedback

Work-Life Balance

Redefining a high-performing provider;

recognizing contributions beyond wRVU productivity

Salary Stability

83% of Primary Care physicians preferred a compensation structure

with more guarantee and less at-risk incentive

Productivity

wRVUs, Panel Size and Patient Encounters were

preferred as top variable pay considerations

Critical Success Factors (abbreviated from Population Health Meeting)

• High Performing Quality

• Member Retention “Keepage”

• Documentation and Coding (Risk Adjustment)

• Reducing Readmission & Avoidable ED Usage

• Disease Management

• Preventative Care

• Patient Engagement

• Health Equity

• Enhancing Accessibility to Care

• Identification of High & Rising Risk


Revised Variable Base Framework/ModelA

cces

s /

Pre

sen

tee

ism

TCC is comprised of four categories

Weighting of each component may be adjusted year-over-year

Patient Visits: ≈ 30%

Visits x rate per visit

wRVUs: ≈ 30%

wRVUs x rate per wRVU ≈ 60% of TCC

Risk- Adjusted Panel

Risk-Adjusted Panel Members x rate per patient ≈ 20% of TCC

Quality Metrics≈ 15% of TCC

≈ 5% of TCC

AWV – HMV - Well Child

# visits x rate per visit

Pro

du

ctiv

ity

Pop

ula

tio

n H

ealt

h

65


Care Model: Current State and Future PreferencesMovement Toward An Integrated Model

66

Independent Supportive Integrated

• Incentive plans have little in

common; focus on individual

productivity/performance

• Can include integrated value-

based performance metrics

• May create competition and

unintended consequences

• Encourages APP

optimization

• Adds team-based metrics

to incentive plans

• May include productivity

thresholds for physicians

and APPs

• Aligned performance drivers

structured by team, site or region

• Shared incentive plan: individual and

team-based measures

• Collaborative practice allows APPs and

physicians to hit thresholds and

receive payouts

Spectrum of Team-Based Primary Care Compensation Programs

12 3 2

1 5 9

Current

Future

MultiCare Primary Care APPs practice independently (and enjoy this structure) • Productivity compensation plan has driven an individual approach to care • Competition is not an issue given patient

volume • Historically a salary-based plan resulted in very low productivity • Providers can have an independent panel and integrated model


Key Takeaways and Next Steps

67

Key Takeaways:

• Creating a common model takes more time than anticipated, especially considering:

▪ ~ 500 providers with different needs

▪ Medical groups have similar comp philosophies but different models

▪ MultiCare is evolving to create more consistency in provider enterprise

▪ Our preferred inclusive approach involved ~ 30 colleagues (physicians, APPs, leadership, subject matter experts) takes more time

▪ Finding the balance in a model that embraces current (and future) reality

Next Steps:

• We will turn this model on in 2022 and run it in tandem with 2021 comp model

• Working through the important details of this model

• A thorough communication plan that includes:

▪ Sharing the model and the Why

▪ Provider town halls

▪ Model details, definitions, FAQs

▪ Shadowing each provider


68 |

Mercy Physician Primary Care Compensation Plan

Private and Confidential

69 |

Why Change?

Insert Text Box

Insert Text Box Insert Text Box

Justify Left

Our future requires us to be successful in value-based care

January 2022: All ACO lives convert to downside risk

To be financially sustainable, Mercy must continue to grow

covered lives

Contracting strategy focused on taking on more risk in current

contracts, which will require higher levels of performance

Need alignment between compensation structure and

system value-based strategy



71 |

Primary Care Compensation Structure

Clinical Compensation Components

✓Panel Size (Individual

OR Team)

✓Performance Metrics

Institutional

Incentives (Up to 10%)

✓Patient Experience

✓ Institutional Incentives

Performance Tier Categories

Growth • Documentation • Quality • Medical Management

Population Health



72 |

Individual OR Team Panel for Determining Compensation

Physician Supervising

1.0 FTE

APP Target

Achieved

Yes

NoPhysician Compensated

on Individual Panel Size

Physician Compensated

on a % of the Team

Panel Size1

Tier 1: 80% of P50 PMPY


Tier 3: P50 PMPY


Tier 5: 120% of P50 PMPY1Physicians in level 3 or above: Receive 85% of the difference between individual and team panel size

Physicians in level 2: Receive 25% of the difference between individual and panel size

Physicians in level 1: Not eligible for team panel credit



73 |

Physician Dashboard Example to Support New Model



74 |

Physician Dashboard Example to Support New Model



Answering Your Questions

All participants have

access to a copy of the

slides via Converve.


Four Plan Types

Appendix: MultiCare

76Private and Confidential


Compensation Plan Transition

77

MultiCare is developing a transition plan, creating safeguards as providers

transition to the new compensation plan

Initial Transition Plan Revised Transition Plan

2022 Implement the new model and

shadow calculate compensation

under the current model; safeguard

= no greater than 5% decrease

from current plan

Pay on current model* and implement

the new compensation plan that would

be paid in addition; safeguard = no

decrease from current plan but no

more than 7.5% increase from current

model

2023 Implement the new model and

shadow calculate compensation

under the current model; safeguard

= no greater than 10% decrease

from current plan

Pay on new compensation

and calculate year end compensation

under the current model; safeguard =

no greater than 5% decrease from

current plan

2024 Full transition – no safeguard Pay on new compensation model with

no safeguard

* 2021 CMS EM RVU updates will be implemented as per standard process



Determined Based On

Conceptual Framework: Example

78

Base Compensation

Minimum Expectations

Patient Contact Hours

Panel Size

Citizenship

Meeting attendance

Variable Compensation

Gateway (Eligibility)

Chart Closure

Coding Accuracy

Mandatory Education

Determined Based On

Other Compensation

Additional Work Effort

Virtual Visits

Committee Chair

For work over and above minimum

expectations

Determined Based On

Work Effort Outside of

Minimum Expectations


Quality

Metrics

Patient

Experience

Target

Market

Position

Combined

wRVU /

Panel

Size Tiers


Documents

Advanced Primary Care Compensation Models