Don Liss, MD Regional Medical Director Aetna Purchaser and Health Plan Initiatives to Support Medical Home Development Don Liss, MD Regional Medical Director Aetna

Why are Payers Involved? Frustrated by well established problems with our current delivery system Cost, quality, access, satisfaction, … Disorganized, uncoordinated, … Impending shortage of physicians in primary care specialties Appreciation that primary care is good Responsive to Customers Don Liss, MD

How Health Plans and Purchasers are Getting Involved? Individual Health Plan Programs Network wide efforts Single practice or medical group efforts Multi-Stakeholder Programs More complicated; require compromises Purchasers (Large Employers) Asking about their health plan’s involvement Demanding involvement Don Liss, MD

Challenges for Health Plans There is no direct, compelling evidence demonstrating that PCMH will result in lower net medical costs There is a body of literature supporting this conclusion, but it is indirect Collaborating in multi-stakeholder pilots surrenders a competitive advantage Customers differ in their interest Operational complexities in mechanics and accounting Don Liss, MD

Patient Centered Medical Home Demonstration in Philadelphia Convened by the Pennsylvania Governor’s Office of Health Care Reform through the Chronic Care Commission as part of Gov. Rendell’s Rx for Pennsylvania Supported by all of the major health plans in Southeastern Pennsylvania Aetna, Independence Blue Cross, Cigna All 3 Medicaid plans Promoted by the primary care professional organizations (ACP, AAFP, AAP) and their PA affiliates The Southeast Pennsylvania PCMH demo represents a convergence of two related but disparate efforts that were coincidentally being promoted in the Philadelphia area. Aetna solicited the American Board of Internal Medicine and the American College of Physicians to approach Independence Blue Cross (and Horizon BCBS of NJ) to determine interest in a PCMH pilot in the Phila Metro area. The Patient Centered Primary Care Collaborative was taking shape and the market dynamics in Phila/SEPA/South Jersey were such that a pilot seemed viable. At the same time, the Chronic Care Commission, a blue-ribbon panel of health care experts across Pennsylvania convened by Governor Rendell as part of his Rx for Pennsylvania initiative, had just issued its recommendation to promote the Wagner Chronic Care Model in an effort to improve care across the state. The SEPA area was to be the location of the first rollout. After discussions with the Governor’s Office of Health Care Reform and securing assurances that a converged effort would comport with the PCPCC model, Aetna and IBC agreed to merge the projects so that resources could be more focused. The involvement of the Governor’s Office of Health Care Reform, a cabinet level state agency, allowed for collaboration among numerous stakeholders and provided a safe harbor for organizations that are competitors in the marketplace to cooperate. Don Liss, MD

How it works 32 Practices agree to transform into Patient Centered Medical Home practices Participate in 4 Learning Collaborative sessions over 7 days Delivered by MacColl Institute under contract to GOHCR Learn to implement the Wagner Chronic Care Model Use a patient registry for diabetes (adults) and asthma (peds) Intent is to expand to more conditions in the future Engage with practice coaches from PA Improving Performance in Practice Assistance with nuts-and-bolts of transformation to PCMH Assistance with application for NCQA designation as PCMH Achieve NCQA PPC PCMH designation at Level 1 by the end of first year The PA AAFP, PA ACP and PA AAP chapters solicited their members via newsletters, fax and email to participate in this program. The solicitation noted that practices would have to participate in a Learning Collaborative delivered by the MacColl Institute (Ed Wagner), agree to use a patient registry and transform their practice into a Patient Centered Medical Home. Interested practices then completed a questionnaire to assess their current state, their willingness to engage in the program, their payer mix and general demographics. After discussions with the steering committee, composed of the participating health plans, representatives of the Chronic Care Commission, leaders of the local health systems and other interested parties, the GOHCR selected the 31 practices (approx 150 FTE physicians/NPs; 170k patients). The practices are diverse: inner city, suburban, private practices, health system owned, NP led. One physician and one practice administrator attend 7 days of CCM training (delivered locally by MacColl Institute) Biweekly conf calls to assess progress, share experiences. Practice coaches deployed to assist in transformation and monitoring of progress Don Liss, MD

What practices get Health Plans make enhanced payments to practices in addition to existing compensation $20,095 (in the aggregate) per practice in year 1 for participating in Learning Collaborative, using registry and applying for NCQA designation $35,000 to $80,000 per FTE physician (or NP) per year upon achievement of NCQA designation through year 3 Varies by practice size and PCMH Level achieved After discussion with the steering committee, the GOHCR established a schedule for enhanced payments – in addition to the existing capitation, fee-for-service and performance incentive payments currently being made by the health plans to these primary care practices – participating practices are eligible to receive. Responsibility for these payments are allocated to the 6 participating health plans in direct proportion to the amount of patient care revenue received from each plan in CY 2007 with the understanding that this would be updated annually for the course of the program. Conceptually, this arrangement was intended to make practices whole for the direct costs they would incur in participating in the Learning Collaborative and securing NCQA designation as a PCMH in the first year, with the “real money” being paid once a practice demonstrated that it had transformed by virtue of securing the NCQA designation. The enhanced payments are intended to support the additional resources necessary to operate a PCMH – care coordination, para-professional staff, additional clerical needs – as well as to marginally increase the operating margin for these practices. [a technical note: to the extent Federal Medicare and other payers not participating in this effort – notably UHC – make up some portion of a practice’s revenue in CY 2007, this portion of the enhanced payment is never realized by the practice.] Don Liss, MD

Some details GOHCR is the organizing entity Establishes the schedule for enhanced payments Monitors performance Organizes/staffs Learning Collaborative “invoices” health plans for enhanced payments due to practices Enhanced payments are allocated to participating health plans in direct proportion to their penetration in a given primary care practice 3 Year Commitment with intent to establish a common set of outcome measures to be used in a payment model in the future Formal evaluation to be conducted to assess clinical, financial, patient satisfaction/engagement and professional acceptance outcomes. Aetna accounts for an average of 19% of the revenue received by the 31 practices, with significant variation across the practices, ranging from deminimus in inner-city Medicaid dominant practices to almost 50% in suburban private practices. The use of total patient care revenue in the formula implicitly results in the inclusion of revenue from both fully insured and self-funded plans for which plans serve as claims administrator as well as revenue from all products – PPO, POS, HMO and indemnity. Aetna allocates the expense related to this program back to the product in the same manner that other performance incentive payments are allocated. [Self-funded plans do contribute to these payments.] Don Liss, MD