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The Impact of the Patient-Centered Medical Home - Patient-Centered

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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.




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



THE URBAN INSTITUTE
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                  Limitations
   – Minimizes assumptions    – Insufficient number of
       about the MH                   practices for refined
       production function            statistical analyses
   –   Reflects actual            –   Unknown population
       practices’ use of              heterogeneity of key
       “lumpy” resources
                                      measures
   –   Method easily
       expandable to larger       –   Costs reflect multiple
       population of practices,       payers’ policies and
       with greater confidence        payment levels –
       in findings                    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


THE URBAN INSTITUTE
Costing the “New Model of Family
Medicine”: Approach – The Lewin Group

Features w/direct effects:           Practice outcomes:
     –   Open access scheduling
     –   On-line appointments            –   Training costs
     –   EMR                             –   Service volume
     –   Group visits                    –   RVU per service
     –   E-consults                      –   MD time per service
     –   Care management                 –   Clinical staff time per service
     –   Web-based info                  –   Office expense
     –   Team approach                   –   Administrative staff
     –   Medical protocol software       –   Malpractice premiums
     –   Outcomes analysis



THE URBAN INSTITUTE
       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%.
THE URBAN INSTITUTE
 There Are a Range of Estimates or
  Actual Payment Fees of the MH
               Population    Cost/         Adjustments
                             Payment
Deloitte       Chronically   $150 PMPM     None known
               ill adults


Ambulatory     Chronically   $54 PMPM      Clinical quality
Intensive      ill adults                  incentives
Care Unit

CCNC           Medicaid      $2.50 PMPM    None known
                             each to PCP
                             and the CCN
THE URBAN INSTITUTE
        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)

THE URBAN INSTITUTE

				
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