Patient-Centered Medical Home Developing the Recognition Process & A Defining a New Reimbursement System March 12, 2007 Michael S. Barr, MD, MBA, FACP Vice President, Practice Advocacy & Improvement Division of Government Affairs & Public Policy American College of Physicians Email: mbarr@acponline.org Phone: 202-261-4531

PC-MH Practices… Organize the delivery of care for all patients according to the Care Model Use evidence-based medicine and clinical decision support tools Coordinate care in partnership with patients and families Provide enhanced and convenient access to care Identify and measure key quality indicators Use health information technology to promote quality, safety & security of information Participate in programs that provide feedback on performance & accept accountability for process improvement and outcomes With this as a brief background let me describe the Advanced Medical Home in a bit more detail which I’ve summarized in just a few bullets. The full paper is on-line – and I’ve provided the link to the paper and other ACP references in the last slide. The Advanced Medical Home is a system-based care model in which practices …. Organize the delivery of care for all patients according to the Care Model which includes team-based care Use evidence-based medicine and clinical decision support tools to drive appropriate care decisions Coordinate care in partnership with patients and their families Provide enhanced and convenient access to care which would include secure messaging and the provision of appropriate non-face-to-face clinical care Identify and measure key quality indicators such as those endorsed by the Ambulatory Care Quality Alliance Use health information technology to promote quality, safety, security of information, and health information exchange, and Participate in programs that provide feedback on performance & accept accountability for process improvement and outcomes The last two bullets are key because the College envisions a voluntary qualification process for practices that adopt the model – which is an entry path to enhanced reimbursement. While it is conceivable that practices could used paper-based systems peppered with components of HIT, it is likely that only until HIT is embedded and part of the everyday workflow that practices will be able to achieve the highest level of care described in this model - and be able to provide true transparency into the structure, process and outcomes measures both the public and payers want to access.

Practice Evolution… EMR = Electronic Medical record HIE = health information exchange CDS = clinical decision support e-Rx = electronic prescribing PDA = personal digital assistant SMGs = self-management goals PHR = personal health record Limited data review >> Dashboard >>> Benchmarking >>> Reporting Visit-based care >>> Scheduled phone/email >> Remote monitoring Appts. by Phone >>> Advanced Access >>> PHR + Web-based portal Pre-Printed Education >> Computer-generated >> Customized + SMGs Books/charts >>> Handheld PDA >>> EMR + CDS Rx Pad/Pen >>> e-Rx (alone) >>> EMR+eRx Flow sheets >>> E-registry >>> EMR >>> HIE

Process to Define PC-MH using PPC AAFP, AAP, ACP and AOA will review PPC elements, documentation requirements and scoring methodology for voluntary recognition process Consensus-driven process to identify standards for PC-MH and the associated documentation Scoring methodology will: Establish the “first rung” of the ladder Practice meeting this standard will be distinctly different than the usual practice Identify more sophisticated levels of the PC-MH Provide basis for estimating cost of implementation to practice and benefit to patient, office, payer, employer Goal is to develop recognition process by mid-2007

“Ideal” Stages of PC-MH Practice Adoption

Likely Reality of PC-MH Practice Adoption

PC-MH Road MAP Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Advanced PC-MH Intermediate PC-MH Basic+ PC-MH Basic PC-MH Direct Support +++++ +++ + FFS +++++ ++++ ++++ ++ ++ Structural Fee ++ +++ +++ +++ Coordination ++ +++ ++++ +++++ Pay for Quality + ++ ++ +++

Making the Case for PC-MH Framework Improve access Facilitate coordination of care Eliminate redundant tests/procedures Order the right tests/procedures Enhance communication with other health care providers Increase efficiency of subspecialty colleagues Patient-centered transitions of care – appropriate “handshakes”

Practice Qualification Process → Reimbursement Framework Relate attributes to costs of providing services Identify potential quality improvements, cost reductions, opportunities for shared savings Develop reimbursement model based to support and reward existing efforts and provide incentives for increasing sophistication

PC-MH Attributes that May Impact on Ambulatory Care Sensitive Condition Hospitalizations http://www.ahrq.gov/data/hcup/factbk5/factbk5.pdf

EQUITY: COORDINATED AND EFFICIENT CARE Exhibit 42 Went to ER for Condition That Could Have Been Treated by Regular Doctor, Among Sicker Adults, 2005 Percent of adults who went to ER in past two years for condition that could have been treated by regular doctor if available International comparison United States, by race/ethnicity, income, and insurance status GER=Germany; NZ=New Zealand; UK=United Kingdom; AUS=Australia; CAN=Canada; US=United States. Data: Analysis of 2005 Commonwealth Fund International Health Policy Survey of Sicker Adults; Schoen et al. 2005a. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

Congestive heart failure EQUITY: COORDINATED AND EFFICIENT CARE Exhibit 43 Ambulatory Care Sensitive (Potentially Preventable) Hospital Admissions, by Race/Ethnicity and Patient Income Area, 2002 Adjusted rate per 100,000 population Congestive heart failure Diabetes* Pediatric asthma NA * Combines 4 diabetes admission measures: uncontrolled, short-term complications, long-term complications, and lower extremity amputations. Data: Race/ethnicity estimates—Healthcare Cost and Utilization Project, State Inpatient Databases (disparities analysis files) and National Hospital Discharge Survey (AHRQ 2005a, 2005b); Income area estimates—HCUP, Nationwide Inpatient Sample (AHRQ 2005a). Patient Income Area = median income of patient zip code. NA = data not available. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

http://www.ahrq.gov/data/hcup/factbk3/fbk3fig6.htm

http://www.cdc.gov/nchs/data/series/sr_13/sr13_162.pdf#table13

Average = $3,027/day Average = $3,108/day http://www.bcbsnc.com/apps/cost-estimator/report.do?type=inpatient&sub=4

Average = $3,873/day

Average Costs/Inpatient Day for Selected Conditions Bronchitis/Asthma = $3,027/day Pneumonia = $3,108/day Heart Failure/Shock = $3,873/day Assume Primary Care Office with 3 Physicians: 6,000 patients Prevalence Asthma: 10-12% Pneumonia: 1.7% Heart Failure: 1-2% Diabetes: 10% Number of Patients in Practice with: Asthma: 660 Pneumonia: 102 Heart Failure: 90 Diabetes: 600 http://www.health.state.ny.us/statistics/ny_asthma/asthmaprevalence.htm http://care.diabetesjournals.org/cgi/content/full/27/8/1879 http://www.cdc.gov/nchs/fastats/diabetes.htm

Example of Savings from Reduced Ambulatory Care Sensitive Admissions If only 0.5% get admitted, 7.26* admissions, 29 hospital days, $95,832 in costs If reduce hospitalization by 35%, $33,541 in potential savings *If ~1500 patients generates 7.25 admissions, expectation for 6000 patients would be 29 admissions/year or, for 3 physicians <0.5 patients/week per physician. Park Nicollet described an average census for FM and IM of 2.5 inpatients/day. Freese, RB. Annals Internal Med. 1999; 130: 350-354.

Example of Savings from Reduced ALOS and Ambulatory Care Sensitive Admissions Estimated savings from  LOS* Estimated savings from  LOS & admits *Health Serv Res. 2003 June; 38(3): 905–918 – 37% reduction ALOS with hospitalists

Framework for Reimbursement... …incremental strategy for reimbursement linked to infrastructure development; reporting of quality & cost measures; performance (outcomes) …coordination of care …adoption and use of health information technology for quality improvement …provision of enhanced communication access such as secure messaging and telephone consultation …remote monitoring of clinical data …reduced administrative requirements for practices …enhanced coverage and reduced co-insurance for patients who select to receive care in an advanced medical home The components of such a compensation model would include: - An incremental strategy for reimbursement starting with a link to infrastructure development; then reporting of quality & cost measures; and ultimately performance (outcomes) -Recognition for coordination of care across all the domains in which people access healthcare - Support for the adoption and use of health information technology for quality improvement; a key point here is that we envision such support as conditional upon participation in quality improvement and reporting programs – which in turn would require that the HIT adopted supports such reporting of data -Payment for provision of enhanced communication access such as secure messaging and telephone consultation and remote monitoring of clinical data -And non-monetary incentives such as reduced administrative requirements for practices For patients, the types of incentives we envision could include enhanced coverage and reduced co-insurance for patients who select to receive care in an advanced medical home.

Framework for Reimbursement... …acknowledges the value of both providing and receiving coordinated care in a system that incorporates the elements of the Care Model …aligns incentives so that physicians and patients would choose medical practices that deliver care according to these concepts The reimbursement framework we describe has two core precepts…it should …acknowledge the value of both providing and receiving coordinated care in a system that incorporates the elements of the Care Model, and …align incentives so that physicians and patients would choose medical practices that deliver care according to these concepts We believe that the reimbursement system should provide enhanced compensation to support practices that voluntarily qualify for the advanced medical home designation and deliver care according to the key attributes – and that such a system should provide patients incentives to select a qualified practice as their medical home.

Pay-for-Performance ALONE will NOT: Correct inequities in reimbursement for health care services… Reduce variability in quality and cost across the United States… Attract medical students and residents to primary care residencies… Reduce the hassles experienced by practicing physicians… Or exceed the cost of implementing health information technology to support robust reporting from clinical records.

PC-MHs would be paid under a different payment model Payment should recognize the added value to patients: Reflect the value of care management outside of the face-to-face visit including coordination of care Support adoption and use of health information technology Support provision of enhanced communication access Recognize the value of physician work associated with remote monitoring of clinical data using technology Allow for separate fee-for-service payments for face-to-face visits Recognize case mix differences in the patient population being treated within the practice

ACP proposes a hybrid payment structure for the PC-MH Bundled, severity-adjusted care coordination fee paid on a monthly basis for the following components: the physician and non-physician clinical staff work required to manage care outside a face-to-face visit the health information technology and system redesign incurred by the practice Combined with per visit FFS payment and a Performance based bonus payments based on evidence based measures of care

Are we proposing to eliminate FFS and replace it with capitation? We believe that payment based solely on volume does not align incentives with physician-directed care coordination The “bundled care coordination” fee will create incentives for primary/principal care physicians to coordinate care with the patient, family caregivers, and other health professionals Maintaining a FFS component reduces incentives for physicians to avoid seeing patients face-to-face The bundled care coordination fee differs from capitation because it is based on the work and systems involved in care coordination, rather than insurance risk to physicians, and is risk-adjusted to create incentives to care for sicker patients

The patient-centered medical home is not defined by specialty Any physician who has the training and experience to provide first contact, continuous and comprehensive care could be the patient’s “personal physician” in a PC-MH General internists, family physicians and pediatricians will often be the “personal physician” because they are trained to provide first contact, continuous and comprehensive care Physicians who limit care to particular organ systems, disease conditions, or procedures are less likely to have the “whole person” orientation needed In some cases, the most qualified personal physician to take care of the “whole patient” will be a subspecialist or specialist

The PC-MH is a care facilitator, not a gatekeeper The goal is to not to restrict access to specialists but to facilitate and integrate specialty care with the whole person perspective of the patient’s personal physician Patients may see a specialist at any time without prior approval The PC-MH will facilitate appropriate referrals, sharing of information, and coordination of care among a multidisciplinary team The PC-MH will integrate disease management support into the practice itself, rather than funding DM as a “stand alone” service divorced from the treating physician Patients are not “locked” into the PC-MH, but they may affirmatively designate a PC-MH as their initial point of care

Issues to be explored with other specialties include: How will specialists outside the PC-MH share information with the personal physician within the PCMH (and vice versa)? How will referral patterns be affected? Will the physician in a PC-MH be held accountable for the total cost of care of patients who select care from a PCMH, and if so, what impact will this have on physicians and other health professionals who care for those patients? How could specialty physicians and their practices qualify as PC-MHs?

Proposed Model Chronic Care Type of Care Patient-Centered Medical Home Traditional non- PC-MH New multi-component payment structure structural practice component care coordination component “improved RBRVS” visit-based fee component performance-based component * Fee-for-Service Payment System under “improved RBRVS” plus establishment of new care coordination procedure codes. Payment Model Increased reimbursement for providing care coordination. Potential for increased reimbursement through P4P. Reduced documentation Potential for increased reimbursement from new care coordination codes, P4P and HIT use incentives. Effect *** May include performance measures in addition to those included under the “improved RBRVS” system.