American College of Physicians: Internal Medicine — Doctors for Adults ®

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Key 'medical home' model elements hit the market

More insurers are putting new money on the table to cut costs and improve care

From the April ACP Observer, copyright 2006 by the American College of Physicians.

By Janet Colwell

Three years ago, Philip J. Mohler, MD, spent two days in a Seattle call center, listening to disease management nurses talking to patients covered by the health plan where he serves as part-time medical director. It was his chance to hear firsthand how nurses handled calls to diabetes patients insured by the Grand Junction, Colo.-based Rocky Mountain Health Plan.

"They sat in front of their computers, looking at notes on what patients said on previous calls and what goals they'd set," said Dr. Mohler, a family practitioner with the 15-physician Family Physicians of Western Colorado, also in Grand Junction. While the nurses connected well with patients, he wondered how much more effective the program could be if the calls came from a physician's office.

To find out, he and his colleagues participated in a Rocky Mountain pilot program that brought disease management back into the physician practice. The pilot has since been adopted by all the internists and family physicians in Grand Junction who participate with Rocky Mountain, which insures about 40% of the community's patients.

"The quality of care has gone up," Dr. Mohler said, "and the plan is satisfied that it's been a good investment."

Across the country, insurers and disease management companies are reaching that same conclusion, trying out different care models and financial incentives to boost physicians' ability to coordinate chronic care. (Also see "Some insurers decide to focus on one disease.")

Linking care coordination to better reimbursement is the core of ACP's "advanced medical home" model, which was released earlier this year. The concept builds on the chronic care model developed by the Seattle-based MacColl Institute for Healthcare Innovation and Group Health Cooperative. (See "What makes up an 'advanced medical home'?")

Several elements of the advanced medical home may still be a long way off, including the extensive use of information technology. But pilot programs incorporating other key elements are forging new alliances among physicians and insurers, including the Centers for Medicare and Medicaid Services (CMS). Those partnerships could provide decisive proof that insurers need to pay physicians more to coordinate complex care.

"Five years ago there was skepticism that you could actually change practice," said Edward H. Wagner, FACP, director of the MacColl Institute and a chief architect of the chronic care model. "But costs have continued to escalate, and that's reinvigorated the focus on quality improvement as a road to cost reduction."

Promising beginnings

Three years ago, HealthSpring of Tennessee—an HMO based in Nashville with operations in five states—formed a partnership with disease management giant American Healthways to help manage the care of its Medicare enrollees, who make up 80% of its membership. The program made an impact, said HealthSpring's chief quality officer James K. Geraughty, MD—but the management was taking place in remote call centers.

"We were spending a lot of money trying to provide disease management without the success we thought we could have if we moved the activity closer to the exam room," Dr. Geraughty said. To test that theory, the company launched a pay-for-performance pilot project in partnership with American Healthways and Sumner Medical Group, a 12-physician multispecialty practice in Gallatin, Tenn.

American Healthways committed one call center nurse to the practice so patients would have a familiar phone contact. And HealthSpring began paying for a full-time onsite licensed practical nurse who coordinates the flow of information among the patient, the plan and the physician. The nurse makes sure, for instance, that the plan's call center nurse has the physician's latest follow-up instructions.

HealthSpring worked with the group to develop 26 clinical measures targeting congestive heart failure, coronary artery disease, diabetes, asthma and COPD, as well as six preventive measures such as influenza vaccinations and colorectal screenings. The HMO pays for annual chart audits and uses medical records—not claims data—to calculate bonuses based on meeting improvement thresholds set by the physicians.

At the end of the program's first year, the physicians had found many previously undetected foot ulcers among diabetes patients and cases of early-stage peripheral vascular disease.

The practice had also received the full bonus amount, equal to 20% of what HealthSprings had historically paid for its 1,200 Medicare members, Dr. Geraughty said.

"Physician costs, specialty services and generic drug costs all went up," he pointed out, "but institutional costs, such as hospitalization, rehab and skilled nursing care, dropped significantly." HealthSpring spent between $15,000 and $20,000 on the Sumner pilot program and still realized a return, he said—and is now aggressively expanding the program to 12 other area groups.

Blue Cross Blue Shield of Minnesota is likewise experimenting with ways to bring disease management closer to the point of care. It has launched an outpatient pilot program with the Minneapolis-based Allina Medical Clinic, which has 35 sites throughout the state, to coordinate calls from disease management nurses with patient appointments.

An offsite nurse has access to the clinic's electronic health record (EHR) and calls patients between physician visits to reinforce the care plan. The nurse can also fax information and questions to the physician's office to be used during an office visit.

It's a bit clumsy with all that paper floating around—but it still closes the information loop and gives physicians valuable information they can use. And while the pilot is not linked directly to financial incentives, said Bruce D. McCarthy, ACP Member, Allina medical clinic's chief medical officer, it is helping the practice increase its overall pay-for-performance strategy.

"When you take all our patients together, we have quite a few pay-for-performance dollars riding on diabetes management," Dr. McCarthy said. Blue Cross Minnesota, which covers about 20% of the practice's patients, and other plans the practice works with all offer some type of financial rewards for meeting clinical goals.

In Grand Junction, Rocky Mountain took a different tack: setting up a registry to track vital data on diabetes patients, based on key clinical measurements. It also provided some interest-free loans to finance Family Physicians' EHR conversion.

The plan began paying practices a $30 per member per quarter fee to track the care of diabetes patients. For Family Physicians, that added up to about $36,000 a year for coordinating the care of its 325 program participants, Dr. Mohler said. (The practice included all of its 800+ diabetics in the program but was reimbursed only for those covered by Rocky Mountain.)

Dr. Mohler cautioned that initial implementation was a little bumpy—and that incentive payments did not cover all implementation costs. Expenses included hiring a full-time registered nurse case manager and a data entry clerk, totaling about $75,000. Even with Rocky Mountain funding a $12,500 grant to help cover those expenses, each physician in the practice last year took a $1,800 pay cut to keep the program afloat.

But the financial picture is starting to brighten: After the practice converted to the EHR, it could eliminate one registered nurse position. Now, said Dr. Mohler, the fees from Rocky Mountain can cover participation of all of the practice's 800 diabetics.

"Before, we had no clue how many diabetics we had or who they were," he added. "The doctors were willing to take a small loss because they loved having an up-to-date patient report at their fingertips."

Speaking as the plan's part-time medical director, he pointed out that Rocky Mountain's pharmacy costs have gone up. "But you can run through a lot of metformin and Actos [pioglitazone]," he said, "for what it costs to put someone in the hospital."

CMS: works in progress

The biggest potential player is the CMS, which likewise is trying out new chronic care delivery and payment models for chronic care conditions such as diabetes and congestive heart failure.

Its "Medicare Health Support" program, authorized in 2003 as part of the Medicare Modernization Act, is designed to improve health outcomes and control costs. According to CMS statistics, the average Medicare beneficiary sees seven different physicians every year and buys 20 different prescriptions.

Last year, the CMS picked eight different health care organizations to run three-year pilot programs in different states. While no data are yet available (the first phase of the pilot ends in 2008), the programs are being watched closely and, if successful, could expand nationwide.

Each organization can design its own program within CMS guidelines, and several have championed physician-directed models. The organization operating Tennessee's pilot program, the Baltimore-based disease management company XLHealth, has designed a program with a more open flow of information between its offsite care managers and physician offices.

The company pays personal-support nurses and program managers to provide face-to-face health risk assessments and ongoing support and education. All information is relayed to participants' primary care physician, said David O. Hollis, ACP Member, XLHealth's chief medical officer for the program.

"We view [the physician] as the quarterback of this process," said Dr. Hollis. Participating physicians are paid a one-time fee ranging between $50 and $150 for collaborating with XLHealth in the program and an ongoing fee of $15 per participating patient per quarter.

Health Dialog, which is running a western Pennsylvania program, also offers financial incentives to participating physicians, said Cynthia N. Rosenberg, MD, the company's medical director. The program also provides tools and services to support physician efforts, such as tracking tools and data collection systems.

But in the CMS program launched in Mississippi, contractor McKesson Health Support decided to move much further away from the traditional call-center disease management approach.

"We were very interested in how you create a medical home in a fee-for-service setting and support it with office support, technology and payment reform," said Sandeep Wadhwa, ACP Member, McKesson's vice president of care management services who is based in Broomfield, Colo. McKesson worked with ACP and other physician groups, he said, to combine more traditional disease management with physician-directed chronic care.

The group provides community-based nursing support to participating practices, both in the office and in patients' homes. McKesson is covering the costs of software, setup and installation of electronic patient registries at four participating test-site practices--support that will eventually be extended to all participating practices.

McKesson is also testing several methods of reimbursement. Participating physicians can now receive three different payments: for identifying and endorsing the program to eligible patients; for achieving clinical goals based on evidence-based guidelines; and for completing a chronic care feedback form.

That form contains a checklist of evidence-based guidelines that physicians use during visits and then return, along with any comments, to a disease management nurse. The form then becomes an "action plan" to coordinate nurses' activity.

This last payment acknowledges physicians' central role in coordinating care and drawing up a treatment plan—precisely the efforts that traditionally don't get reimbursed, Dr. Wadhwa said. He declined to list specific payment amounts, but said they are "significant enough to get people's attention."

What's ahead

Physicians may find they actually have higher costs when implementing the chronic care model, but benefit from better efficiency and higher quality care, noted Group Health's Dr. Wagner. Insurers will still focus on the bottom line, but may realize that investing in preventive care and physician incentives may be the best way to save money.

"Pay-for-performance programs that make an early investment to help physicians get their practices organized—by funding information technology, for example—have the most promise," said Dr. Wagner. "They must reward physicians for putting into place the systems and resources that we've learned from experiments make a difference."

The information included herein should never be used as a substitute for clinical judgment and does not represent an official position of ACP.

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What makes up an 'advanced medical home'?

In its "Advanced Medical Home" position paper released in January, ACP proposed fundamental changes in how primary care in America is financed and delivered.

Here are some key criteria physicians and practices would meet to qualify as an advanced medical home:

  • Primary care physicians would partner with patients to ensure that all of their health care is effectively managed and coordinated. Doctors would work with chronic disease patients to help them manage their own conditions and prevent avoidable complications.

  • Physicians and their teams—not health plan case managers—would be in charge of coordinating chronic care.

  • Physicians and practices would identify key quality indicators to demonstrate continuous improvement.

  • Practices would use electronic health records and other information technologies to store all clinical data and test results. Physicians would also use computerized evidence-based clinical decision guidelines at the point of care, but the ACP model would not require fully implemented electronic health records.

  • Physicians would provide—and be reimbursed for—non-urgent medical advice through e-mail and telephone consultations. Physicians would also team up with consultants and other health care professionals to provide the full spectrum of patient-centered services.

  • Practices would use innovative scheduling systems to minimize delays in getting appointments.

The paper is online.

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Some insurers decide to focus on one disease

When it comes to creating chronic care incentives, some insurers are taking a disease-specific approach.

In late 2005, for instance, Aetna Inc. launched a depression management pilot to reimburse primary care physicians for screening and assessing patients for depression. About 150 physicians in the Mid-Atlantic and Southwest regions now participate.

"Research indicates that if you use a collaborative care model of care managers, access to specialists and primary care physicians, you will get much better results than treatment as usual," said Hyong Un, MD, national medical director for Aetna Behavioral Health. "We wanted to acknowledge that managing depression requires time and should be reimbursed."

As part of the program, Aetna links physicians with care managers who act as liaison between patients and specialists and provide telephone support to patients between visits. Physicians also have on-call access to Aetna's network of psychiatrists.

Participating physicians must take a free CME course via the company's Web site and identify appropriate patients willing to be referred through the program. The physicians use a depression assessment questionnaire during routine visits.

For conducting the screening, participating doctors are reimbursed between 30% and 40% more per visit. Aetna has launched the program in six states and plans eventually to expand it nationwide.

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