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Agenda Item: II. Payment Approaches and Cost of the Patient-centered Medical Home. Robert A. Berenson, M.D. PCPCC Meeting 16 July 2008, Washington, D.C. Contract with the Commonwealth Fund and ACP to:. Identify additional resources (incremental costs) needed to support PCMH adoption - PowerPoint PPT Presentation
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THE URBAN INSTITUTE
Payment Approaches and Cost of the Patient-centered Medical Home
Robert A. Berenson, M.D.
PCPCC Meeting
16 July 2008, Washington, D.C.
Agenda Item: II
THE URBAN INSTITUTE
Contract with the Commonwealth Fund and ACP to:
• Identify additional resources (incremental costs) needed to support PCMH adoption
• Compare and contrast various payment approaches to supporting PCMH activities
• Site visit practices to assess feasibility and likely approaches to PCMH adoption
• Identify some “best practices” in practices visited that might be exportable to others
THE URBAN INSTITUTE
Project Team
• Urban Institute – Robert Berenson and Steve Zuckerman
• Medical Group Management Association – Terry Hammons and Dave Gans
• Social and Scientific Systems – Katie Merrell
• ACP – Will Underwood and Shari Erickson
THE URBAN INSTITUTE
Key Factors in Designing Payments and Estimating Costs
• Medical home definition
• Assessment of how practices meet definition – scoring strategy
• Covered population
• Inclusion of risk adjustment?
• Payment for existing services (E&M and other)?
• Other payers’ policies
THE URBAN INSTITUTE
Our Method
• “Practice-level” approach aims to identify aggregate cost differences associated with different levels of MH with some assessment of activities producing cost variations
• In contrast, existing cost estimates calculate unit costs for specific medical home attributes – use a micro-costing, “building block” approach
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Practice Level Estimate Approach
• Relates practice expenses to scores on the NCQA PCMH recognition tool
• Practice expense data from MGMA Cost Survey and ACP Practice Management Check-up Tool – ask for comparable information
• Accounts for practice size, ownership, and service volume
THE URBAN INSTITUTE
Data Collection
• Recruit practices that have already submitted data to the MGMA or ACP for other purposes (non-random, but imposes low practice burden and higher likely response rate)
• Each participant practice completes the NCQA PCMH recognition tool
• Obtain supplemental practice data on IT expenses,
service and patient volume
THE URBAN INSTITUTE
Medical Home Costing Methods
• Rank practices by PCMH scores (roughly by Level or Tier) within subgroups of practices
─ 1-3 MDs, physician-owned; 4-15 MDs, physician-owned; 4-15 MDs, hospital-owned
• Express practice expenses on a “per unit of volume” basis– RVUs, physician patient care hour, physician
• Differences in expenses per volume across PCMH score groups will be an estimate of the incremental costs of becoming a medical home
• Would decompose incremental costs by type of practice expense (e.g. labor, HIT)
THE URBAN INSTITUTE
Strengths and Limitations of Our Approach
Strengths– Minimizes assumptions
about the MH production function
– Reflects actual practices’ use of “lumpy” resources
– Method easily expandable to larger population of practices, with greater confidence in findings
Limitations
– Insufficient number of practices for refined statistical analyses
– Unknown population heterogeneity of key measures
– Costs reflect multiple payers’ policies and payment levels – attribution challenge
THE URBAN INSTITUTE
We Will Also Describe Other Approaches
• The RUC approach being used for CMS demo essentially reduces 25 PCMH capabilities to specific additional physician work requirements and a few practice expense and PLI components (consistent with RUC methodology)
• Assigns RVUs to these specific added cost items – mostly MD time (work) associated with E&M activity, cost of a nurse coordinator, prices for equipment expansion, esp. server-based EMR at Tier 3.
• Case mix and other assumptions from one large multi-specialty clinic
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Costing the “New Model of Family Medicine”: Approach – The Lewin Group
Features w/direct effects:
– Open access scheduling
– On-line appointments
– EMR
– Group visits
– E-consults
– Care management
– Web-based info
– Team approach
– Medical protocol software
– Outcomes analysis
Practice outcomes:
– Training costs
– Service volume
– RVU per service
– MD time per service
– Clinical staff time per service
– Office expense
– Administrative staff
– Malpractice premiums
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NMFM: Effect on Practice Compensation
• Attempts to assess both costs and impact on revenues of MH elements – not a discrete estimate of costs
• If family physicians receive a NMFM fee of $10 per pt/year, there would be minimal drop in annual compensation and 18% fewer hours worked
• If physicians maintain hours, compensation could increase 40%.
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There Are a Range of Estimates or Actual Payment Fees of the MH
Population Cost/ Payment
Adjustments
Deloitte Chronically ill adults
$150 PMPM None known
Ambulatory Intensive Care Unit
Chronically ill adults
$54 PMPM Clinical quality incentives
CCNC Medicaid $2.50 PMPM each to PCP and the CCN
None known
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There Are Also Numerous Payment Options
• FFS with discrete new codes for important MH activities
• FFS with P4P for quality and/or cost performance• FFS with higher payment levels to facilitate cross-
subsidized activities• Regular FFS with PPPM MH fee, perhaps with
P4P – the commonly discussed approach• Reduced FFS with enhanced PPPM fee
THE URBAN INSTITUTE
Payment Options (cont.)
• Enhanced PPPM with no FFS – improved “capitation” to include robust risk adjustment, actuarial adjustment for enhanced activities + P4P (see Goroll et al -- JGIM)
• Enhanced payment for condition + continuum of the levels of financial risk (Goldfield et al --JACM)