If your practice has considered becoming a recognized Patient-Centered Medical Home (PCMH), you no doubt appreciate how challenging the transition process can be, often requiring a full overhaul of process, policy and even practice culture. But beyond the assurance of enhanced patient care and the workload needed to meet and prove that your practice fits a set of national standards, is the question of how much value will this transition bring to my practice?
In order to answer that question, we need to look at the status of the market today, where things are headed, and how becoming a PCMH can help your standings.
A Payer Perspective
Just for a moment, put yourself in the position of the insurance companies and other healthcare Payers. The Payers are feeling a tremendous amount of pressure to decrease costs while improving patient outcomes. And the source of this pressure might surprise you – not only are they feeling the weight of their own expenditures and revenue cycles, but more and more often the pressure to do better is coming from employer groups and the patients themselves. Mid to large size employer groups are demanding change, and one way they are facilitating that change is to eliminate the Payers. As of 2015, 83% of covered workers at larger firms are enrolled in plans which are either partially or completely self-funded. It’s as if employers are standing up and saying ‘we want quality care for our employees and if you can’t deliver, we will take our business away from you and pay for it ourselves’.
And today’s patient is absorbing more of their healthcare costs than ever before. With coinsurance and large deductibles, patients are increasingly becoming a driving force for determining physician selection based on total out-of-pocket cost to them. While this can often provide a cost savings benefit to the Payers, the decisions of today’s pro-active and educated patient can push the insurance company into the role of responder, rather than decision maker.
Looking at this from the perspective of the Payer, are you seeing the need to accommodate the demands of the employers, moderate patient impacts, and manage the ever-growing list of Federally mandated programs and requirements? Payers are responding to the direction of the industry, and this changes the way they will interact with your practice.
An Evolving Direction
Most of the larger insurance companies now utilize tiered networks, a method of stratifying providers based on the average cost of care they provide and specific quality metrics. If your cost of patient care comes in above average, or even if your patient satisfaction levels do not meet the Payers standards, you will be sorted into a specific tier and patients will be discouraged from seeing you. In a tiered network, patients are still welcome to seek care with providers in any tier, as long as they are willing to pay more for that care in the form of higher coinsurance and deductibles. And if your patient’s employer contracts for narrow networks, you and your practice may even be excluded as an option altogether for a number of patients in your area, negatively impacting your patient rolls. This tiering strata is increasingly being utilized to control costs and prohibit provider choice. In 2015, 17% of employers offering health benefits have high performance or tiered networks in their largest health plan. Ultimately, this means you have to work harder to ‘qualify’ to see a large amount of these patients.
Perhaps the biggest impact to your practice is the use of new payment models by both insurance companies and Medicaid/Medicare Payers. This is a one directional push away from typical fee-for-service and towards payment based on the meeting of quality metrics and pay-for-performance (P4P). These payment models demand that your practice show the value of your care in the form of lowered health costs and less resource utilization, such as the emergency room or frequent high cost radiology tests. These metrics must be proven per patient and practice wide to qualify for performance incentives and per-member-per-month payments. Of greater impact, is the emerging policy of no-payment or negative adjustment penalties for missed quality and cost metrics. Not only could your practice miss the mark on receiving incentives, but soon we will see these penalties become a reality in which your practice must pay a percentage of revenue back to the Payers.
In addition, the legal structure of your practice dictates how Payers provide reimbursement and referrals. Practices within Clinically Integrated Networks (CINs) and Accountable Care Organizations (ACOs) are preferred by the Payers, as these structures are specifically designed around lower cost and performance metrics. Recognized Patient-Centered Medical Homes are also viewed as bringing value to the Payers, even though these may be independent or associated within smaller organizations.
With just a quick look at how the Payers are evolving and transitioning, it’s easy to see the long-term impact to your medical practice. How can transforming to a PCMH mitigate these impacts and ensure a valuable return on the efforts it requires to transform?
PCMH and Your Practice
Before diving right into the benefits in contracting and payments, it’s important to note that the value of a Patient-Centered Medical Home is quantifiable in multiple areas. The benefits start right in the center with the patient, bringing exceptional added value of improved medical care, increased access and enhanced communication. But moving outwards from this center, the activities that surround the patient and the newly implemented policies and procedures can have a significant financial impact on the practice.
For example, the transition to team based care will ensure that all clinical staff are working at the top of their license, performing those functions that require a specific skill set, and not tasks that a lower paid staff member can accomplish. And the majority of tasks performed in clinical and non-clinical areas will have been reviewed, streamlined and implemented into a written protocol, creating efficiencies in staff time and resource use.
Another area where practices see tremendous value is the ability to moderate risk:
- Shared decision-making with the patient and increased communication between team members decreases non-compliance and the potential for safety mistakes or miscommunications.
- Tracking and follow-up procedures are assigned and routinely completed, ensuring that the provider always has the information needed to properly diagnose and treat.
- Medical record documentation will be more thoroughly completed and routinely monitored with progress and performance reports.
- Evidence-based decision support and treatment algorithms, along with treatment care plans will be further integrated into the care of your patients.
The good news is that malpractice underwriters are catching up with this trend and may soon be offering specific coverage discounts to recognized medical homes.
The use of technology in a medical home also brings tremendous value to your practice. Patient portals allow for self-scheduling and the ability for patients to view their own test results, minimizing calls to the office and staff time. Patient recall reporting can significantly increase the number of patient visits annually, and many EMRs and practice management systems have remote log-in capabilities that allow the provider real-time access to patient records, which may help minimize urgent care visits outside of your practice. Additionally, third party applications like PerfectServe’s Charge Capture now allow the provider to automatically bill for after-hours contacts and phone calls at the time of contact, eliminating the need for time spent in next day documentation. An upfront investment may be required for upgrading the technology in the practice, however this will provide a financial return in the long-term if you do the research before you buy.
The shift to pay-for-performance (P4P) and value based compensation is not just today’s target. These types of reimbursement models are increasingly more evident across all Payers, and the Federal programs are leading the charge to continue this trend in the future. One big example of the trend is MACRA, with its two different payment tracks both being linked to specific metric reporting. Another, the Oncology Care Model (OCM), is now expanding accountable care into Oncology, with payment arrangements that include financial and performance accountability for episodes of care surrounding chemotherapy administration.
On the insurance company side, the majority of companies continue to expanded programs that link performance to reimbursement. A 2014 survey of Blue Cross and Blue Shield companies revealed that nearly $71 billion in medical claims spending was tied to models that reward quality. Did your practice benefit from this and other quality reimbursement models last year?
A recognized Patient-Centered Medical Home is well situated to reap the benefits of these programs. Most of the larger Payers, as well as Medicare and state Medicaid plans, have specific programs that provide enhanced reimbursement in the form of per-member-per-month care coordination fees and bonus incentives for performance targets. For example, Humana’s Medical Home Program offers a care coordination payment to practices that meet the reward measures on a quarterly basis, in addition to incentives for HEDIS measures and other shared savings opportunities. And achieving PCMH recognition can automatically align your practice for participation in some of these programs, without the need for contract negotiations. In other programs, such as in the MACRA Merit Based Incentive Payment System (MIPS), your recognition qualifies your practice for specific weighting in certain categories.
Transforming your practice to a recognized Patient-Centered Medical Home is financially worth the effort. To secure pay-for performance and quality incentives, your practice must be able to leverage actual performance and actual quality during contract negotiations. Your PCMH recognition assures Payers at the beginning of negotiations that you have already committed to meeting the standard that is expected.
If a Payer program is not already in place, focus negotiations on:
- How your recognized PCMH standing will lower Payer costs for care. Provide data on how your practice stands out in this area, possibly with lower emergency room and urgent care visit numbers or a referral process that encourages patients towards Payer preferred specialists.
- Special programs that your practice provides. For example, you may already provide excellent asthma education and management through an RN or NP. Take advantage of this and create a written policy for this activity, patient materials, and market this program, highlighting any successes in patient care and cost utilization.
- How your practice uses your technology to improve care. Recalling your patients for follow-ups and care opportunities isn’t just good for the patient — the Payers know that a healthier patient means less utilization and lower costs for them.
Outside of negotiations, proving your practice’s value routinely through cost savings on claims data and high patient satisfaction scores will ensure that you place well in Payer physician profiling and tiering stratums. You need the Payers to drive more business to you, and you need to decrease the risk of losing patients when their employers implement tiered networks. The competition is waiting around the corner to pick up any patients that have left your practice, so make your Medical Home a proven quality environment for both the patients and the Payers, and continually look at ways for improvement and how your well-earned PCMH recognition can bring lasting financial and other benefits to your practice.