The unthinkable is occurring — physicians collaborating with Payers. Collaborations with the “dark side.” It is happening and can actually be successful; however, not without stress and not without a concerted effort by both physicians and Payers to understand each other and what they bring to the collaborative effort. More importantly, it needs to be successful for the sake of physicians, their finances, and their patients. It rewards physicians by doing right by their patients clinically, and as fiduciaries for the costs of care incurred by their patients, and pragmatically, enjoying economic benefits of success, if achieved, in the process.
Stimulated by a commitment on the part of the Federal Government to tie physician reimbursement to quality and outcomes, and the potential of Accountable Care Organizations (ACO), commercial Payers have sought to harness, for their benefit, this evolving change in the dynamics of care delivery. The concept is very simple, empower physicians (with and without hospital partners) to design, implement, and operate their own clinically integrated network. If it can be successful in meeting quality and cost measures, the physicians (and their hospital partners) derive an economic upside. To get providers involved, performance results in economic rewards.
Historically, the general theme of the physician-payer relationship has been one of friction and conflict. Physicians viewed Payers as nefarious enterprises striving to reduce their income with burdensome bureaucrats that interfere with patient care. As dollars have dominated the conversations, Payer’s view, the medical community as, if not completely, then principally economically self-interested with patient well-being considered secondary.
Both Payers and physicians approach collaboration with a great deal of cynicism. Both have to cultivate a new understanding of each other and accept the fact that they each need the expertise the other has. Together they can work towards and achieve what both desire.
For the Payers, it is lowering the rate of cost increases that only translate into higher premiums for employers and consumers alike. For physicians, it is a financial upside for achieving measures of quality and cost containment. Physicians, who control 85% of medical costs with their prescription pads and treatment plans, will actually benefit from delivering better care faster — and yes, cheaper.
One key point to understanding what is necessary for physicians is to internalize the new world for health plans. Under Health Reform (The Accountable Care Act), health plans must spend 85% (80% for small groups) of premiums on medical care, with 15% (20% on small groups) allowed for administrative costs, including sales, marketing, and also including profit. If a plan spends more than the 85%, they must absorb the loss; however, if they spend less, they have to refund those dollars to whomever pays for the policy. In essence, Payers need the expertise and creativity of physicians just to survive. Years of Payer efforts to mandate utilization controls have clearly failed to stem the rising costs of care delivery.
The key point of understanding what is necessary for Payers is that the vast majority of physicians are truly committed to quality and effective care delivery. Yes, physicians want to be paid, and paid appropriately; and, given the information, appropriate measures and support of their efforts, they are prepared to earn it through performance. Payers need to also understand that physicians, if engaged, are closest to the needs of the patients and the deficiencies in the system of care delivery and have the greatest potential for improving care quality and cost.
Commercial Payers are seeking out physicians and providers who are prepared to take on the same responsibility and rewards as are being promoted under the Federal ACO program. Both physicians/hospitals and commercial plans are aggressively seeking out these opportunities to work with each other.
There are two factors driving provider engagement with Payers. First, the expectation that currently there is a window of opportunity to begin clinical integrations and shared savings with upside-only benefits early before there is a forced move to risk sharing with its downside consequences. Second, to capture patient volume within a collective of physicians and hospitals. Can a collective of providers use this “window” to learn how to work together; to build an infrastructure now, so that when and if risk sharing becomes the norm in physician reimbursement, they will have the potential of success? And, as patient volumes become increasingly changed as increased patient financial responsibilities are motivating a reduction in visits to physicians, can the collective become self-promoting in the aggregate to replace lost volume and capture new volume?
In the case of University Physicians Network (UPN) working with NYU Medical Center (NYUMC), the motivation to be early adopters has been in learning how to ride the bicycle now before the training wheels come off. Together a new entity was created, NYUPN Clinically Integrated Network (CIN), tasked with seeking out opportunities for collaboration with Payers, and building and operating an infrastructure to support those efforts. UPN representing the physicians, and NYUMC, the Hospital, share 50/50 ownership and control, with physicians appointed by each party, representing 80% of the Board of Managers.
Each Payer has its own worldview in approaching work with our CIN. Some more prepared than others, some more sophisticated to support the effort than others, and some more flexible than others.
Now with six “shared savings” arrangements in place and operational, there are some observations shared as to what is involved and the impact:
One of the greatest leaps in understanding is the concept of attribution. Attribution is the methodology that assigns the responsibility for specific patients to the CIN and to the individual physicians. It’s not a perfect science, and each contract with a Payer can calculate attribution differently. A simple explanation is: attribution is a formula that seeks to assign the costs and quality of care delivered by the physician that is most likely to have the greatest contact/influence over a patient’s care. This means that claims data is used to see where patients get their primary care services and then attribute the responsibility of preventive and routine care to that primary care physician. Similarly, claims data is used to attribute the responsibility for “downstream costs”(costs beyond primary care) resulting from the primary care physician’s referrals or following primary care contact. In other words, “responsibility” for those costs is attributed to the physicians that was primary, or had the greatest potential to influence downstream costs. The costs and preventive services responsibility is then “attributed” to that physician for specific patients. For purposes of patients being counted in the agreement, those whose primary care physician is in the CIN’s provider’s network are counted.
Payers have some differing nuances as to how they define primary care, or primary responsibility. Some will use pure primary care specialties only such as internal medicine, family practice and pediatrics, while others will include obstructions/gynecologists, and first line internal medicine specialists, such as cardiology, and gastroenterology.
Every physician has difficulty with the concept of attribution, for every physician will tell the anecdotal tales of the patients that won’t come in for preventive services, the patients they haven’t seen before who head out to a specialist, or similar tales of why they aren’t responsible or can’t control their patient’s decision. All true and, in point of fact, such patient choices cannot be restricted and often the Payer’s own benefit packages provides for this patient choice. However, the reality is that attribution models are actually fairly accurate in the aggregate in identifying the physician that can most influence and direct the patient’s care experience.
Physicians will have to struggle with the issue of “responsibility” for costs and quality with the lack of the ability to control, or even address, the recalcitrant patient that will not follow their advice and guidance. Again, in actual experience, physicians have more influence over patient decisions than they give themselves credit for. It is the difference between the physician saying, “You need to see a cardiologist” and the physician saying, “I would like you to see my colleague, Dr. X, a cardiologist for x.”
Additionally, in building the performance measures for quality and costs, the norm of what can be controlled/influenced by physicians is readily identified, and adjusted, in which those physicians that are cavalier in their ownership of this responsibility become readily apparent.
With “lives attributed,” the patients identified for quality and economic responsibility, physicians and their collaborating health plan now have a collective challenge: What do we know about these patients? What do they need and how do we engage with them?
This is opening the Pandora’s box of data from the Payers. It is claim data; it is the aggregate of paid and unpaid claims for the patients now attributed to the CIN. And it is a wealth of data, but it is not yet information. One of the greatest challenges to the CIN is to understand and manipulate this “big” data to make it usable; to turn it into information.
The very clear obligations of the Payers to the CIN for the delivery of data, its timeliness and quality, is essential to this collaborative relationship. It is from this data that the physicians in the CIN are going to know their challenges. What is the health status of the “attributed lives”? What percentage has not received the expected routine and preventive services? This is the basis of the quality measures on which the CIN will be judged.
In addition, the CIN will learn where the dollars have been going for these “lives.” Are these patients obtaining material levels of care from providers outside of the CIN? If so, is this an opportunity to “capture” volume? Are these patients receiving care from providers that are not contracted with the health plan? Such care is largely not coordinated with the physicians in the network and much more costly, often hundreds of times more, than services by contracted providers.
The challenge then is to “re-capture” these patients by providing services within the CIN. To do so requires understanding the impediments to internal referral activities. Largely these are issues of access to needed specialists. If a large volume of neurology referrals go outside the CIN, for example, efforts to increase access by increasing supply, or expertise are needed. Out-of-network activity needs to be scrutinized as well because it identifies deficiencies in access within the CIN network. Is it caused by a lack of quality in the CIN providers of those specialties, availability, or perhaps the continuation of historic referral patterns that are now in need of confrontation and change?
A word of advice – when entering into such collaborations with Payers, put the risk of non-delivery of data (according to the agreed schedule of timeliness and completeness) on the Payer. In other words, if the Payer does not deliver, the physicians get specified credit towards meeting the goals and targets.
Data turned into information will be an eye opener. As their history of claims activities becomes shared and known to others, information can readily scare the physicians in the CIN. Of course, the data will never be perfect, but it will be telling, and it will be incomplete. Claims data, which is what payers have, suffers because it is not matched with clinical information; it is dependent on the claims submitted by physicians, the quality of which is highly variable. This is why it is so critical for physicians to embrace EHRs and shared clinical data. For example, physicians are notoriously lax about diagnoses being submitted on billings; after all, the only motivation is to enter a code that will get the bill paid. Also, claims data from a Payer represents only what the Payer receives in claims. On review of medical records, often times there are preventive and routines services documented, but whether the services were not billed, or perhaps paid by a different insurance carrier, is not in the claims data of the Payer.
The CIN will, for its own sake, now have to press its physician members to do what Payers have long been pressing, to learn to document and report diagnoses fully and completely. However, now with the CIN in collaboration with Payers, the physicians stand to benefit from accuracy in data and in claims. When it comes to assessing meeting the quality goals, include in your collaborations the provision of having medical record documentation included in any assessment, and not solely relying on claims data. With data becoming information you know what you’re dealing with, where the challenges are, and the opportunities.
On one level, there is the challenge of patient engagement. Building a strategy to reach out and motivate patients to come into the physician’s office to obtain preventive services and to keep up with care if chronically ill isn’t easy. There is no one solution to this challenge. The approach must be multi-channel, from making sure offices know to perform or order these services when a patient presents for other reasons, to phone and mail campaigns to patients. Joint efforts at patient engagement should be undertaken using resources from both the CIN and the Payers. For example, Payer mailings to targeted patients that support physician office visits and remind patients of their benefit plans, which often do not have copays or applied deductibles for preventive services. The CIN works with its physicians so that office staff knows that there will be an increased volume of requests for appointments and can plan ahead to accommodate the workload. The CIN can also use the data to provide the practices with lists of patients and their missed preventive services. First, so the practice is prepared to provide the service when the patient makes that appointment, and second, so that the office can report back if the service had already been provided, in the medical record documentation, but not in the billing information.
Make sure the primary physician knows their patients are being contacted. One example would be reaching out to a patient to schedule their mammography when their physician knows the patient had a double mastectomy. Avoid the embarrassment.
The big clinical challenge is to use the data to identify high-risk/high-cost patients; aggressively act to provide care coordination and support to reduce the cost of care by improving interventions. Here you need not only need to consider the traditional nurse case managers it’s time to think outside of the box. Can you team up with a sophisticated home care operation to not just engage post-hospital discharge, but to use their resources and protocols as a tool to avoid hospitalizations? In general, 5% of the population incurs 50% of the medical expenses. You’re not going to deprive necessary care to anyone, but instead work in a coordinating and creative manner to deliver what the patient needs in different ways.
As you turn data into information, you will identify non-physician providers that deliver care with vast differences in cost. For example, hospital outpatient services are more costly than independent clinical laboratories; ambulatory surgery centers are less costly than hospital outpatient surgery; and office based surgery is even less costly. The appropriateness of place-of-service substitution is a topic that needs to be explored. Additionally, at times, you will find unexpected differences in outcomes by providers. For example, perhaps lower level of readmissions for post-acute care when home care is provided rather than nursing home care, or outpatient cardiac rehabilitation compared to inpatient rehabilitation. Longstanding patterns of treatment, especially if they only add costs and nothing towards improving outcomes, may be appropriate to change. “Traditional” referral patterns may need to be challenged. Outcomes, when known and compared, need to be shared. Most physicians have no hesitation to change when shown there is a better course of treatment/care available to their patients. But it means sharing data, and reporting comparative information.
Information now known will also identify those medical practices and physicians that will be most challenging. Tracking the care ordered by practices will identify things that you hope not to find, such as those few physicians that are perhaps gaming the system, or treating their referral activity with what could be considered disregard for cost and appropriateness: for example, the participating physician that funnels all ambulatory surgery to a non-contracted ambulatory surgery center, or the devotion to a non-contracted laboratory. Or perhaps the physician has an interest in the non-contracted physical therapy practice that seems to always get his referrals. Such non-clinically justified “business” arrangements need to be addressed head on.
Another important value of information is to identify the opportunities for improved revenue by improved diagnosis coding. As noted before, physicians and their billers who are increasingly good at CPT coding, have relegated diagnosis coding to the back burner. What one code will get this claim paid? After all, physicians are paid on CPTs, so who cares about the diagnosis code? You should. Now you need to care and there is the need for re-education across all physicians and billers in the CIN. Diagnosis coding is critical for the economic success of these collaborations.
The economics of shared savings, and soon-to-be-shared risk, are adjusted based on the severity of illness of the patients. The outcry against the old concept of capitation was that if you had a sick patient, your capitation was insufficient. The adjustment needed then and now, is the full and complete documentation of severity of illness of each patient. As documented severity of illness increases, and recognition that sicker patients do cost more, the dollars that Payers will pay towards these reimbursement arrangements goes up. A recent retrospective review was conducted on claims data along with medical record information for some 200 out of over 100,000 patients. This review found that had these physicians documented their billings with the appropriate diagnoses — diagnoses that the physicians would properly consider when ordering further care — the added reimbursement to the CIN would have been in excess of $1 million that would have readily paid out to the physicians themselves. Common conditions present such as diabetes, COPD, depression, and obesity are often not coded on the bill and can dramatically impact dollars..
Reviewing paid claims data will identify the costs and services incurred by the attributed patients and produce some surprising insights in to what is being provided to patients. In our experience Payers, especially those that serve as third party administrators to self-insured employers appear less “diligent” as to whom they pay and why. Claims data has identified very apparent practices, most often by non-CIN network and even non-contracted providers that bear investigation for fraud and abuse. For example, the non-contracted physical therapist that has an average cost per visit of $5000, or the physician running $30,000 for surgeries for which Medicare pays $800. Here the CIN must challenge the Payer to exercise its fiduciary obligations to confront and investigate such payments. This collaboration with the Payer should include the removal of such abusive costs from the responsibly of the CIN.
While these arrangements provide physicians with greater control over their daily world, and hands more responsibility to the physicians individually and collectively for the success of their venture, the Payer cannot sit on the sidelines. They have a vested interest in the venture’s success. Remember, if successful, healthcare costs are constrained thus making their products more competitive in the market, and garnering for them the opportunity for business and financial growth. The Payer’s role dramatically and definitively changes with the CIN and its physicians. They become a data source and, depending on the company, Payers will play a more or less active role in the engagement with patients, as well as supporting clinical, educational, and financial resources towards the infrastructure and operation of the CIN. The degree to which each Payer participates is the negotiation of the shared savings/shared risk arrangements.
The journey that NYUPN is undertaking is off to a good start: with 6 contracts in place, and over $12 million in shared savings accrued to the benefit of our CIN by the first quarter of 2017, with half going to the physicians, and quality measures being passed as a prerequisite to the entitlement to economic payment. Four of the contracts are showing positive performance, with the oldest showing costs increases at a rate of half the cost growth compared to the cost growth in the market. Of the remaining, one is too new to measure and the other has structural deficiencies that are restraining the rewards being earned — so it’s back to that Payer for more collaborative discussions. This performance and these distributions are measures of early and readily achievable impact. The data is becoming information and it’s revealing that more opportunity readily remains to challenge the efforts, and earn the rewards.
For both Payer and physician, and their Clinically Integrated Network, the journey is just beginning. Early success is coming from “low hanging fruit” of opportunities, closing quality gaps, ending referrals to non-contracted physicians, and improving diagnosis coding. The real challenge and opportunity lies ahead and it is going to be data driven. As physician EHRs link up with CINs, marrying clinical claims data, physicians as scientists will begin to challenge themselves to understand and intervene using the patterns of care that identify the better outcomes with the lowest cost. This is where the real opportunity is: how to implement care delivery that can be faster, better, and cheaper. That challenge will dramatically change existing patterns of care and patterns of referral activity. Physicians, working collectively through a CIN, will have to work collaboratively with their Payer collaborators to continue to refine the care needed by their attributed patients to accomplish success.