1. Making Payment Reforms Work for Patients and Families Lee Partridge Senior Health Policy Advisor National Partnership for Women and Families January 28, 2010

2. Goals and models of payment reform ~Changes in health care payment should be designed to improve quality of care received, enhance ready access to needed care, reduce disparities, and help make health care more affordable ~Changes can be carrots – a reward for doing something – or sticks – penalties for failing to do something ~Both carrots and sticks are being used somewhere in our health care system right now and are incorporated in both national and state health reform proposals ~Consumers should be involved in shaping decisions about which incentives are adopted, especially with regard to use in public programs

3. Enhanced Provider Payment Models Special payments to providers for assuming more responsibility for coordination of care. Examples include: - The patient centered medical home model In use or being piloted by public and/or private payers in several states. Medicare also will be testing. - Higher reimbursement for care of medically complex patients, as in the Indiana Care Select program for Medicaid beneficiaries with chronic and disabling conditions

4. Payment for Performance (P4P) Models ~Bonus payments for achieving certain quality of care goals (Pay for Performance). Examples: –Illinois bonuses to Medicaid primary care providers who achieve high scores on selected HEDIS® measures –Medicare Premier hospital quality demonstration project, rewarding hospitals for high performance in 5 clinical areas –Multiple state projects targeting asthma care

5. Financial Penalty Models ~No payment for care required due to poor care. Example: Medicare and Medicaid program non-payment policies for avoidable medical complications of inpatient hospital care ~Financial penalties for missing quality target scores. Example: Maryland Medicaid HMO program; Michigan Medicaid denial of automatic assignment of beneficiaries to poor performing HMO

6. The Shared Savings Incentive ~Concept: providers share (i.e. receive some portion of savings as an additional payment to provider) in savings realized from delivering higher quality, more efficient care. In use in some Medicaid programs, being considered for Medicare and other demonstrations (Accountable Care Organization model, some medical home pilots). ~Caution: Must be accompanied by safeguards against denial of needed care, reduced patient access to care

7. Patient Incentives ~Extra benefits for joining managed care organization Example: Texas Medicaid StarPlus offers enhanced Rx access ~Lower or no co-payments to encourage use of appropriate care Examples: eliminating co-payments for preventive services, prenatal care; lower co-pays on generic prescription drugs

8. Combining Payment Incentives with Care Delivery Models ~Payment incentives are usually part of any changes in health care delivery models ~In shaping those changes, decisions must be made about which provider group to target (hospitals, primary care providers, health plans, etc.), which population group is focus (chronically ill, high risk maternity, children, entire membership), and which particular payment model or models to choose ~The following state medical home initiatives reflect the variety of possible combinations

9. Oklahoma SoonerCare Choice ~Enrolls all Medicaid beneficiaries except duals and those in home and community based care ~Medical home practice can be headed by MD, advanced nurse practitioner, or physician assistant ~State pays monthly case management fee per member per month (PMPM). Fee adjusted for patient age and practices score on NCQA patient centered medical home tool. Practice can also earn bonus for high quality performance

10. Alabama Patient 1 st Program ~Serves all children and families enrolled in Medicaid ~Designed to assure 24/7 access, reduce utilization of emergency rooms, adoption of health information technology, and improve quality of care ~Practices paid variable PMPM fee, depending on success in meeting various goals. Current maximum PMPM is $3 per month ~Practice also shares in savings pool; share based on performance in meeting targets such as fewer ER visits by its patients

11. Community Care of North Carolina ~Serves all Medicaid beneficiaries ~Designed to improve access and quality, strengthen care coordination between providers and between providers and community resources ~Two part structure: primary care practices and 14 regional support networks operated by community organizations ~Practice paid PMPM fee and network is paid similar PMPM fee ~Networks often partner with other programs (mental health) to enrich resources available to support patients

12. Helping Shape These Choices ~Our health care payment systems should support effective, equitable delivery of care, at the right time at the right cost ~This often means a current system must change ~Consumer and patient advocates must insist on being a player in making these important decisions and assure that appropriate consumer safeguards are put in place ~So we must join these committees, learn about the issues, speak up and speak out. We can make a difference!

13. thank you Lee Partridge Senior Health Policy Advisor lpartridge@nationalpartnership.org