Moving from Volume to Value: A Physician's Guide to Payment Reform

Moving from Volume to Value: A Family Physician's Guide to Payment Reform

Š 2015 California Academy of Family Physicians, San Francisco, CA, USA. All rights reserved.

Executive Summary The move to value-based payment gained momentum in early 2015 with historic announcements from major sectors of the health care system. By 2018, for example, half of Medicare spending outside of managed care will be paid under contracts with incentives to manage quality and costs, Secretary of Health and Human Services Sylvia M. Burwell announced in January.

The Health Care Transformation Task Force, a national coalition of major health systems, insurers and employers, also announced in January that 75 percent of its members’ business would be tied to incentives for health outcomes, quality and cost management by 2020. Blue Shield of California, the Pacific Business Group on Health and Dignity Health are among the task force members.

The scale of this shift is dramatic; Medicare's current fee-for-service budget alone is $362 billion.

California Academy of Family Physician (CAFP) leaders view these goals with enthusiasm as well as caution.

The success of such initiatives depends on sound care-delivery models that place primary care at the center, accurate payment models and carefully considered and coordinated metrics.

To support family physicians in navigating this sea change, CAFP has prepared this publication featuring prominent members of several health care sectors. Articles here include visions of the future, lessons from the past and details about how to begin transforming primary care practices from high volume to high value.

PAYERS The United States Department of Health and Human Services explains its expanded focus on value-based payment and cites recent experience to show that improving quality while decreasing costs requires that payment reforms be coupled with broader delivery system reforms.

The California Department of Health Care Services outlines its commitment to payment reform, describing initiatives including hospital Diagnosis Related Group payments, a Coordinated Care Initiative for individuals eligible for both Medicare and Medi-Cal and value-based payment options proposed as part of the state’s Medicaid 1115 Waiver Renewal proposal.

Covered California, the state health benefit exchange, asserts that coverage expansion and affordability will not have the impact we would like them to if they do not go hand-in-hand with improving quality and addressing underlying cost of care issues.

Blue Shield of California and Health Net describe their commitment to payment reform, health care quality and cost-effectiveness.

MULTIPLE STAKEHOLDERS The Integrated Healthcare Association, a multi-stakeholder leadership group, describes the statewide Pay for Performance program it runs on behalf of ten health plans representing nine million commercial enrollees.

Approximately 35,000 physicians in more than 200 physician organizations participate.

MEDICAL GROUPS CAPG supports value-based payment and points to physician member organizations’ successful work in other Medicare alternative-payment arrangements as grounds for optimism for future payment models.

To be successful, any value-based payment efforts must put primary care at the center of health care delivery. Led by primary care physicians, the John Muir Medical Group Medicare Accountable Care Organization achieved $12.6 million in savings – the highest in California – in its first year. San Diego’s Sharp Rees-Stealy Medical Group points out that focusing on primary and preventive care, quality metrics and patient access and satisfaction are required to improve health and decrease costs.

PHYSICIAN PRACTICES Transforming a primary care medical practice from a traditional model to value-based can also be accomplished in small family medicine practices. Family physicians from San Francisco and Riverside explain how they moved to the Patient Centered Medical Home model, with changes benefiting patients, staff and physicians.

PRACTICE COACH Medicare began paying for Chronic Care Management services in January 2015 under a new Current Procedural Technology code. Much of this work previously was not billable to Medicare and so went either unpaid or undone. An experienced practice coach explains step-by-step how family physicians can make immediate use of this opportunity and other practice changes to maximize payment in a value-based payment environment.

CAFP leaders and staff look forward to working with California family physicians to redesign health care delivery and payment. For more information and resources, visit www.familydocs.org/payment-reform.

INTRODUCTION

1 The Future Is Here: Linking Payment Reform with Health Care System Reform Jay W. Lee, MD, MPH, FAAFP, President, California Academy of Family Physicians

3 Family Physicians Welcome Payment Reform

Bo Greaves, MD, Chair, Medical Practice Affairs Committee, California Academy of Family Physicians

PAYERS

5 HHS IsTransforming the U.S. Health Care System to Focus on Value, Not Volume

TABLE OF CONTENTS

Melissa Stafford Jones, Director, Region 9, U.S. Department of Health and Human Services

7 Medi-Cal Is at Forefront of Payment Reform

Oksana Giy, Health Care Reform Advisor, and Anastasia Dodson, Associate Director for Policy, California Department of Health Care Services

9 Improving Quality and Addressing Costs Must Accompany Coverage Expansion

Peter V. Lee, JD, Executive Director, and Anne Price, Director, Health Plan Management Division, Covered California

10 Blue Shield of California Partners with Providers in Payment Reform

Stuart Levine, MD, MHA, Vice President and Chief Innovation and Clinical Care Officer, and Kristen Miranda, Senior Vice President, Strategic Partnerships and Innovation, Blue Shield of California

12 Health Net Embraces Triple Aim and Paying for Value

Terri Guzy, Vice President, Strategic Provider Partnerships, Provider Network Management, Health Net

MULTIPLE STAKEHOLDERS

14 IHA Convenes Multiple Stakeholders to Shape Statewide Value Based P4P

Jill Yegian, PhD, Senior Vice President for Programs and Policy, and Lindsay Erickson, MSPH, Manager, Value Based P4P Program, Integrated Healthcare Association

MEDICAL GROUPS

17 Moving from Volume to Value Is a Much-Needed Change Amy Nguyen Howell, MD, MBA, Chief Medical Officer, CAPG

18 Primary Care Physicians Must Be Leaders of Value-Based Payment Design Taejoon Ahn, MD, MPH, CPE, President, John Muir Medical Group, Contra Costa County

19 Physicians Focus on Quality Measures and Patient Satisfaction

Steven A. Green, MD, Medical Director, Sharp-Rees Stealy Medical Group, San Diego

PHYSICIAN PRACTICES

20 Small Steps Are Effective When Moving from Volume to Value

Lawrence Shore, MD, Lead Physician, My Health Medical Group, San Francisco

22 Value-Based Payment Drives Innovation in Primary Care

Benjamin Mahdi, MD, MPH and Tarek Mahdi, MD, FAACP, Riverside Family Physicians, Riverside

PRACTICE COACH

23 Drilling Down: A Primer on Billing for Care Management and Other Steps to Maximize Payment Elaine Skoch, PCMH-CCE

Jay W. Lee, MD, MPH, FAAFP, President, California Academy of Family Physicians

The Future Is Here: Linking Payment Reform with Health Care System Reform Dear California Family Physicians: On January 26, 2015, U.S. Secretary of Health and Human Services (HHS) Sylvia M. Burwell announced that the Medicare program will move toward value-based payment in a measurable way, setting explicit goals for paying providers based on the quality rather than the quantity of care they provide patients. Secretary Burwell announced HHS’s plan to tie 30 percent of Medicare payments to alternative payment models, such as Accountable Care Organizations (ACOs), Patient Centered Medical Homes (PCMH) or bundled payment arrangements, by the end of 2016 and to tie 50 percent of payments to these models by the end of 2018. Further, Secretary Burwell announced HHS’s plan to tie 85 percent of Medicare payment to quality by the end of 2016 and to tie 90 percent of Medicare payment to quality by the end of 2018. With this announcement, HHS accelerated the pace of change in health care payment. Commercial payers quickly followed with announcements of their own.

Sitting at the table with Secretary Burwell during the January 26 press conference, American Academy of Family Physicians (AAFP) Executive Vice President and Chief Executive Officer Douglas E. Henley, MD, FAAFP announced AAFP’s strong support for this change and commitment to transforming the delivery of care to achieve better health. Dr. Henley described Secretary Burwell’s announcement as an exciting moment of great change in the payment of health care services in the United States. Such payment reform has long been a goal of AAFP and is now a goal of Family Medicine for America’s Health, the exciting new project on which AAFP has embarked along with seven other national family medicine organizations.

The California Academy of Family Physicians (CAFP) responded to these announcements with a plan of action, and the development of this publication is part of that plan. It is of the utmost importance that California family physicians understand the changes afoot and that you prepare your practices accordingly. CAFP wants to help you to become a “high-value” provider by taking steps to improve the quality of care delivered to patients and reducing costs attributed to patients. CAFP wants to help you maximize your practices’ income in coming years.

This publication, dedicated to California’s family physicians, includes statements from public payers, HHS Region 9 and California’s Department of Health Care Services about payment trends as well as statements from some of California’s biggest commercial payers, Blue Shield of California and Health Net, about how they are changing payment for health care services. We include articles by leaders of California medical groups, including the president of John Muir Medical Group and the medical director of Sharp Rees-Stealy Medical Group, as well as the Chief Medical Officer of CAPG. Perhaps most importantly, we include the perspectives of practicing California family physicians who have transformed their practices to the PCMH model and have growing confidence in the return on their investment as the pace of payment reform accelerates.

We hope this publication helps you understand what value-based payment is and how to maximize payment for PCMH services such as care management of complex patients. We want to give you concrete steps to move your practice to a high-value model, and so we conclude with a training guide from practice coach Elaine Skoch, PCMH-CCE, who outlines lessons she has learned in transitioning practices from volume- to value-based.

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INTRODUCTION

We must move forward with a sense of urgency: California’s family physicians have seen our commercial payers move toward narrow networks on California's health insurance exchange, Covered California. As consumers become more price-sensitive and more willing to accept network restrictions in return for lower premiums, payers will seek to lower plan costs through the use of narrow or tiered networks. This trend will increase the pressure on physicians to demonstrate their value though improved quality of care and reduced costs.

The new payment environment will pose particular challenges for solo and small family physician practices.

California payers are increasingly driving payment change through contractual relationships with large medical groups in ACO products and shared risk payment models. Solo and small practices must be aware of any and all opportunities for their practices.

Each California family physician’s first response to these changes, whether you characterize them as good or bad, should be understanding the trends and creating a plan for your practice. We hope this publication serves as a helpful learning tool and guide. Our goal is for our members to deliver the highest quality care to their patients and to maximize payment along the way. CAFP welcomes your questions and feedback as we move along this journey together.

Jay W. Lee, MD, MPH, FAAFP

President California Academy of Family Physicians

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Bo Greaves, MD, Chair, Medical Practice Affairs Committee, California Academy of Family Physicians

Family Physicians Welcome Payment Reform CAFP’s Medical Practice Affairs Committee has adopted the strategic goal of advancing the PCMH model in California. Under the larger umbrella of the PCMH model, the Committee works to support Academy members on a variety of issues, including adoption of health information technology, care management of patients with chronic illnesses and the use of data to drive quality improvement in medical practices. The main obstacle to adoption of the PCMH model and related “advanced” primary care services is payment. Our committee consequently has adopted the second strategic goal of payment reform to support the PCMH model.

Payment reform appears to be on the horizon. Even before HHS Secretary Burwell’s announcement about payment reform in the Medicare program, commercial payers were moving toward value-based payment in a significant way. The Catalyst for Payment Reform (CPR), an independent nonprofit working on behalf of large employers and other health care purchasers, quantifies value-based payment nationally and in California. To CPR, value-based means payments are tied to quality of care. Value-based payments include alternative payment models and pay-for-performance initiatives. They can include capitated payment, but there must be a quality component. In 2014, CPR reported that 40 percent of all commercial in-network payments in the United States were value-oriented. This represented a big leap from 2013 when CPR reported that only 10.9 percent were value-oriented.

In California, payment reform is occurring even more rapidly. In 2014, CPR reported that 55.4 percent of all commercial in-network payments were value-oriented and traditional payments made up only 44 percent. This same report noted that change was less significant for primary care physicians in 2014: only 24 percent of all outpatient primary care physician payments were value-oriented.

This still represented significant movement from 2013, however, when only six percent of those payments were value-oriented.

The main obstacle to adoption of the PCMH model and related “advanced” primary care services is payment.

I read about these trends with some skepticism. As a practicing family physician working in a community health center setting, I am not seeing this kind or extent of payment change. I am concerned that it is happening only in other facets of the health care system, such as hospitals or large medical groups. To engage practicing primary care physicians in changing our behavior, we are going to need to feel the effect.

Value-based payment is only one type of change. Another important development – one that front-line family physicians may feel more directly – is payment for care management services by primary care practices. In January 2015, the Centers for Medicare and Medicaid Services (CMS) began paying primary care physicians for care management of patients with multiple chronic illnesses. The New England Journal of Medicine described this as “the most important broadly applicable change [CMS] has made to primary care payment to date.” The Journal noted that practices caring for beneficiaries with two or more chronic conditions can receive a monthly fee of approximately $40 per eligible beneficiary and a physician caring for 200 such beneficiaries could see additional revenue of $100,000 annually.

This is a great change for family physicians and our patients and we hope that commercial payers will follow CMS’s lead. This kind of payment, particularly from multiple payers, will encourage better care and better patient outcomes. Primary care physicians have historically provided some care coordination services to our patients, but we have done it inconsistently and on our own dime. This new payment will allow us to create care management programs and the necessary teams to support such programs. We can consistently 3

INTRODUCTION

communicate with patients outside the office visit, follow up with patients after hospitalizations and follow up on referrals.

Members of CAFP’s Medical Practice Affairs Committee understand payment changes because we regularly receive updates on payment reform from CAFP staff at our committee meetings. As the payment landscape now is rapidly changing, we believe that CAFP’s larger membership needs a similar education and understanding. With this in mind, our committee helped develop this publication focused on the two categories of change described above: movement toward value-based payment and movement toward payment for care coordination.

Our goal is to help CAFP members understand what value-based payment is, what reimbursable care management services look like and how you, the front-line family physicians, can prepare your practices to maximize payment and ensure economic viability in the future. We want you prepared. We want your practices to thrive. We want your patients healthy.

1 Catalyst for Payment Reform. 2014 National Scorecard on Payment Reform. Available at http://www.catalyzepaymentreform.org/how-we-catalyze/national-scorecard.

2 Ibid.

3 Catalyst for Payment Reform. 2014 California Scorecard on Payment Reform. Available at http://www.catalyzepaymentreform.org/2013-03-03-05-08-38/california-scorecard.

4 Edwards, ST, Landon, BE. “Medicare’s Chronic Care Management Payment – Payment Reform for Primary Care.” N Engl J Med 2014; 3471:2049-2051.

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Melissa Stafford Jones, Director, Region 9, U.S. Department of Health and Human Services

HHS Is Transforming the U.S. Health Care System to Focus on Value, Not Volume The Affordable Care Act (ACA) has led to the greatest expansion of health care coverage in a generation, and we just completed a smooth and successful second Open Enrollment period for the Health Insurance Marketplaces – including Covered California. Now that the ACA has expanded health care coverage and made it affordable to many more Americans, we have the opportunity to shape the way care is delivered and improve the quality of care systemwide, while helping to reduce the growth of health care costs.

As family physicians, you are well aware that our health care system, for the last 50 years, has under-delivered on access, affordability and quality. Health care costs grew significantly faster than things like Gross Domestic Product and middle-class family incomes. It is within our common interest to address these issues and build a health care delivery system that delivers better care, spends health care dollars more wisely and keeps patients healthy, rather than waiting to care for them when they get sick. That is really the style of practice that family medicine employs. Information belongs in the hands of physicians and their patients, empowering them to make better choices. When it comes to improving the way doctors are paid, we want to reward value and care coordination rather than volume and care duplication.

To help drive the health care system toward greater value-based purchasing – rather than continuing to reward volume regardless of the quality of care delivered – HHS has set a goal to have 30 percent of Medicare payments in alternative payment models by the end of 2016 and 50 percent by the end of 2018. This will be achieved through investment in alternative payment models such as ACOs, advanced primary care medical home models, new models of bundling payments for episodes of care and integrated care demonstrations for beneficiaries who are Medicare-Medicaid enrollees.

To further support this, HHS is taking steps to give new tools to providers to help them redesign their practices to support higher quality care. For example, through the Transforming Clinical Practice Initiative, we will invest up to $800 million in providing hands-on support to 150,000 clinicians and their practices for developing the skills and tools needed to improve care delivery and transition to alternative payment models.

Making operational changes will be attractive only if the new alternative payment models and payment reforms are broadly adopted by a critical mass of payers. When providers encounter new payment strategies for one payer, but not others, the incentives to change are weak. In fact, a provider who alters her system to prevent admissions and succeed in an alternative payment environment may lose revenue from payers that continue fee-for-service payments. Therefore, we are launching a Learning and Action Network to help accelerate the transition to more advanced payment models by fostering collaboration between HHS, private payers, large employers, providers, consumers and state and federal partners.

HHS has already seen promising results on cost savings through alternative payment models, and there is even more opportunity to improve on this in partnership with the private sector. For example, to date, Medicare’s ACOs have generated a combined total program savings of $417 million to Medicare. Moreover, public-private initiatives like the Partnership for Patients, Quality Improvement Organizations and others have already borne fruit. They have helped reduce hospital readmissions in Medicare by nearly eight percent, translating into 150,000 fewer readmissions between January 2012 and December 2013. Furthermore, with the help of quality improvement efforts initiated by many of these organizations, preliminary estimates suggest that we have saved 50,000 lives, reduced the rate of hospital-acquired conditions by 17 percent and generated $12 billion in health savings from 2010 to 2013.

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PAYERS

We know that payment model reforms must be coupled with reforms to the broader delivery system. We will continue the shift toward giving providers more tools to improve care delivery and making information securely available when and where it is needed to support consumer and provider decision-making, such as with the help of electronic health records.

At the end of the day, for patients and families, delivery system and payment reform mean better care coordination and having a trusted primary care provider and care team deliver the best care possible.

At HHS, we have a responsibility to lead and help align the way providers are paid as a key step toward better care, smarter spending and healthier people and communities. We cannot do it alone. I am fortunate to serve Region IX, which includes California and CAFP. We have a long history in our state of trailblazing and serving as a model to other states. I believe there is a tremendous opportunity for CAFP and its member physicians to continue to lead in this next critical step in health reform and demonstrate that the future is now. We are on the threshold of positive, transformational change. It is up to us to build on our common ground, as this is how we will reach our common dreams.

Melissa Stafford Jones is the Director of Region 9 for the U.S. Department of Health and Human Services. Region 9 includes California, Nevada, Arizona, Hawaii, Guam and the outer Pacific Islands. Ms. Stafford was appointed to her position in November 2014.

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Oksana Giy, Health Care Reform Advisor, and Anastasia Dodson, Associate Director for Policy, California Department of Health Care Services

Medi-Cal Is at Forefront of Payment Reform

Medi-Cal, California’s Medicaid program, exemplifies several nationally-recognized elements of health care reform, such as expanding access to care, improving quality and health outcomes and slowing the growth of health care expenditures. Significant enrollment growth as a result of the Medicaid expansion under the ACA brought an additional three million people into coverage in California, underscoring the need to ensure the value of state and federal health care spending.

The California Department of Health Care Services (DHCS) is proud that Medi-Cal has been at the forefront of Medicaid payment reform. DHCS will continue to rely on managed care to implement innovative financial incentives for Medi-Cal, such as value-based payment arrangements, and to drive quality improvement.

As a component of payment reform, value-based payment strategies reward providers for the delivery of high quality care, while eliminating incentives for the unnecessary volume-based care often experienced in fee-for-service arrangements. Examples of value-based payment arrangements include pay-for-performance programs, ACOs and bundled payment structures such as episode of care payments, global budgets and Diagnosis Related Group (DRG) payments to hospitals.

A foundational element of value-based payment arrangements is the reliance on data submitted by providers that enables payers like Medi-Cal to track progress and performance requirements.

Several examples of payment reform initiatives and value-based payment models currently implemented or in the early stages of development for Medi-Cal include: Managed Care Pay-for-Performance (P4P) programs: Most Medi-Cal managed care plans have a P4P program in place, although much variation exists in the types of programs and methodologies used by health plans. The use of these programs allows providers to receive performance-based revenue on top of base capitation for outstanding performance and participate in meaningful performance measurement and reporting. Performance improvement is measured based on pre-established benchmarks such as clinical outcomes, utilization, encounter submission and patient experience, in which additional payment is directly related to meeting or exceeding performance measures. Providers are required to complete timely and accurate submission of encounter data to receive financial rewards. A recent survey of Medi-Cal managed care plans developed by the Integrated Healthcare Association (IHA) found that most plans have some level of P4P activities in Independent Practice Associations (IPAs), medical groups, physician practices and community clinics. The use of financial incentives to improve health outcomes of Medi-Cal beneficiaries will be an ongoing theme of the program.

Overall, DHCS has seen an improvement in encounter data quality resulting from a number of factors. One important initiative launched in 2012 to improve the quality of Medi-Cal managed care encounter data was the creation of a new front-end encounter data processing system that allowed DHCS to establish stricter quality checks on incoming data. Additionally, DHCS developed a grading methodology consisting of numerous quality measures to assess and improve the quality of encounter data submitted by managed care plans.

As of February 2015, seven Medi-Cal managed care health plans have begun reporting on the new system.

The remaining 15 plans are scheduled to begin reporting by April 2015.

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PAYERS

Hospital Diagnosis-Related Group (DRG) Payments: Medi-Cal implemented a DRG methodology in July 2013 for payments to private hospitals and in January 2014 for non-designated public hospitals, with the goal of properly compensating hospitals based on the acuity of their patients, rather than on a per diem rate with no relationship to the cost of service. Payment by DRGs is based on patient acuity rather than length of stay.

The use of DRG payments encourages access to care, rewards efficiency, improves transparency and improves fairness by paying similarly across hospitals for similar care. DHCS looks forward to assessing the impact of DRG payments on patient health outcomes.

Coordinated Care Initiative: California’s dual demonstration program, launched in 2014 for individuals eligible for both Medicare and Medi-Cal, includes a quality withhold for participating health plans, to be paid upon achievement of key performance measures. This incentive is a key example of the DHCS focus on quality and value-based payments.

1115 Waiver Renewal Efforts: California’s “Bridge to Reform” section 1115 federal Waiver ends later this year, and DHCS is considering proposing several value-based payment options to the federal government for inclusion in the upcoming Waiver renewal. Potential proposals include new payment reforms beyond capitation, such as a shared savings approach between health plans, the state government and the federal government to support innovative efforts that improve quality and reduce cost growth. Other proposals will likely include a focus on care coordination and flexible, non-clinical services that improve patient care through delivery system integration supported by value-based payments.

Medicaid Health Homes: The Affordable Care Act, Section 2703, “State Option to Provide Health Homes for Enrollees with Chronic Conditions,” provides a new optional Medicaid benefit to address whole-person care, with financial support for the coordination of care for beneficiaries with chronic, complex conditions who would benefit from intensive care coordination.

The new Health Home benefit would fund six categories of care coordination services including physical health, behavioral health, community-based long-term services and supports and social services. DHCS envisions implementation through a Health Home network, with multiple providers working as a team to ensure whole-person care coordination. This network will include a lead entity, such as a health plan, that would administer the program and develop the network of Health Home providers. Primary care physicians are expected to provide significant input into the patient’s health action plan. Health Homes in Medi-Cal are expected to begin in January 2016.

California Children’s Services (CCS) Redesign: To improve health care and the coordination of services for children and youth with special health care needs, DHCS is currently leading a series of stakeholder discussions on the transition of CCS from fee-for-service into an organized delivery system. These discussions will include new financing structures for CCS and consideration of value-based payment models.

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Peter V. Lee, JD, Executive Director, and Anne Price, Director, Health Plan Management Division, Covered California

Improving Quality and Addressing Costs Must Accompany Coverage Expansion With the passage of the ACA, California took the lead nationally in expanding coverage for low-income individuals and families through both expansion of Medi-Cal and creation of Covered California. Today more than four million Californians have coverage who would not have previously and California has reduced its uninsured rate by 50 percent in just one year. Moreover, these individuals now have access to the care they need.

According to estimates developed by Covered California in cooperation with the California Department of Public Health, HHS and the Centers for Disease Control and Prevention (CDC), coverage expansion through Covered California alone will lead to an estimated 8,700 fewer asthma attacks and 45,000 new diagnoses of diabetes that can be addressed through access to primary care. As a Triple Aim organization, Covered California looks at health, care delivery and our impact on costs. For our enrolled population, which is largely low income with nearly 90 percent of all Covered California enrollees receiving some federal subsidy, cost is a critical concern. The combination of affordable premiums, subsidies to lower premiums and financial support to lower out-of-pocket expenses is making a huge difference in the lives of many Californians. Estimates from the same HHS/CDC work noted above suggest that more than 36,000 California individuals and families will avoid catastrophic medical expenditures as a result of having insurance coverage through Covered California.

Coverage expansion and affordability will not last or have the impact we want them to if they do not go hand-in-hand with improving quality and addressing underlying cost of care issues, however. That is why Covered California applauds the recent HHS announcement that establishes explicit and immediate goals for transitioning a high percentage of current Medicare payments to fee-for-value-related payment ("alternate payment models"), while the rest are to be tied explicitly to quality performance. The waste and variation in the care provided is in part exacerbated by payment systems that do not reward quality, effective coordination and health promotion. The steps taken by HHS establish the country's single largest payer as a bellwether of future payment models for all participants in the health care system – public and private payers and the full range of clinicians and providers. For its part, Covered California created explicit expectations in its contracts with health plans that emphasize and promote value-based purchasing, transparency, promotion of integrated care and attention to overuse through programs such as "Choosing Wisely.” We are also pleased to co-chair a new California-wide initiative on overuse reduction with DHCS and the California Public Employees’ Retirement System (CalPERS).

As we go forward, Covered California applauds CAFP and its 9,000 physician and medical student members for being at the forefront of seeking to deliver on the promise of value-based care. Primary care is the true point of coordination, consumer decision support and integration that our health system and millions of new enrollees so greatly need as we all work to balance coverage, care and affordability.

1 Based on California Health Information Survey (CHIS) 2011-2012 rates of asthma among uninsured adults and children and multiplying by the number of the 1.176 million covered who are expected to be adults and children (2%). Based on looking at the differences in the rates of these factors among the insured vs. uninsured with asthma — from CHIS 2011-2012 and 2009. These differences are then applied to the estimated number of people with asthma newly covered by insurance.

2 Assistant Secretary for Planning and Evaluation (ASPE) and Agency for Healthcare Research and Quality (AHRQ) estimates based on Baicker et al. The Oregon Health Insurance Experiment — the Effects of Medicaid on Clinical Outcomes, NEJM 2013 May, 368(18): 1713-1722.

3 Assistant Secretary for Planning and Evaluation (ASPE) and Agency for Healthcare Research and Quality (AHRQ) estimates based on: Baicker et al. The Oregon Health Insurance Experiment – the Effects of Medicaid on Clinical Outcomes, NEJM 2013 May, 368(18): 1713-1722.

4 "Better, Smarter, Healthier: In Historic Announcement, HHS Sets Clear Goals and Timeline for Shifting Medicare Reimbursements from Volume to Value26." US Department of Health and Human Services, 26 Jan. 2015. Web. 24 Feb. 2015. <http://www.hhs.gov/news/press/2015pres/01/20150126a.html>

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Stuart Levine, MD, MHA, Vice President and Chief Innovation and Clinical Care Officer, and Kristen Miranda, Senior Vice President, Strategic Partnerships and Innovation, Blue Shield of California

Blue Shield of California Partners with Providers in Payment Reform Blue Shield of California has, for quite some time, rewarded high-value health care services with a variety of innovative financial arrangements with our provider partners. These payment models have included contracting with ACO provider partners, medical groups and IPAs and individual providers where quality and cost-effective care is the focus. Our ACO model in particular, which preceded the passage of health care reform, has garnered national attention for its focus on aligning incentives across disparate health care providers toward the Triple Aim goals of improving cost, quality and patient experience. The success of this approach reflects Blue Shield’s mission and vision and has facilitated the scaling of a high-value model throughout California.

Our quality data is an important enabler for the true transformation of our current health care delivery process, but also guides us to the future iterations that are needed to meet the needs of our patients and their families.

At Blue Shield of California, our contracting model works in concert with the provider community with special focus on our ACO partnerships for all business lines. We empower our partners to be high-quality providers who also make care affordable for all Californians. These partnerships are bound together with risk modeling for all partners, with significant incentives for all participants to achieve the triple aim. This requires transparency in total cost of care for all participants. We work in collaboration with providers, medical groups and hospitals to serve our patients and their families. We align incentives to ensure outstanding care and patient engagement. We learn together what works and what does not and share and proliferate these best practices across our partnerships.

Blue Shield of California relies heavily on performance data, both to understand current quality and to drive improvement. Our quality data is an important enabler for the true transformation of our current health care delivery process, but also guides us to the future iterations that are needed to meet the needs of our patients and their families. We use data to stratify patients – and providers – to provide the best and most cost-effective care possible. The “low hanging fruit” has been the reduced institutionalization of our patients, including in hospitals and even long-term care settings where we can reduce unnecessary hospitalizations and readmissions, as well as emergency room utilization. To accomplish this, we have focused on improving patient engagement and re-engineering our provider delivery systems.

An independent member of the Blue Shield Association

In coming years, Blue Shield expects to build on this foundation to drive high quality, affordable care to all Californians and to support the expansion of this model across the United States. We want to ensure that our payment and care delivery models promote the right care at the right moment for the right patient. To drive this transformation, we anticipate increasing the quantity of value-based payment and the sophistication of our contractual relationships throughout the entire health system, which will include our IPA, medical group and ACO provider partners. That means moving from the predominantly fee-for-service payment structure of the past that rewards volume of care to one that predominantly rewards quality and value. Consistent with the mandate from HHS, we have explicit goals for moving toward value-based payment. Given our strong historical relationships with the patient constituency as well as our provider community, and aided by advanced technology and analytic sophistication, we are confident we will swiftly meet those goals.

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PAYERS

Blue Shield is a not-for-profit investing in California’s communities. While we focus on building the infrastructure to care for complex patients as well as concentrated efforts around increasingly important preventive care, we anticipate that payment changes and delivery system changes will transform all patients’ care. We have found that we must broaden our approach to include all patient populations, working with our provider partners to think of all patients – even beyond Blue Shield members – to help physicians effect change and embrace a population view and care for all patients together. We have broadened our initiative to include all patients and their families and all business lines to transform the delivery systems. Blue Shield of California is committed to payment reform and also to our mission as a California not-for-profit health plan dedicated to improving patient care and serving the entire California community.

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An independent member of the Blue Shield Association

Blue Shield of California is committed to improving the care of complex patients and we will make requisite investments in health care infrastructure to ensure this improvement. We focus on the highest risk patients in all product categories and invest in preventive care and chronic care management. We stratify medical groups and practices as well, acknowledging that this care coordination process can be embedded in care teams with some of our primary care physician practices within the more sophisticated medical groups and IPAs. In other instances, we build specialized high risk programs to treat the chronic and complex patients outside of, but in collaboration with, our primary care practices that need higher-level support. The paymentmodels we use will vary based on our provider partnerships as well. With our ACO partner groups, we will use increasingly sophisticated ways to incentivize the right care and outcomes, while with other providers payment will simply reward outcomes and patient engagement. We are committed to a flexible approach, offering different solutions in different communities.

Terri Guzy, Vice President Strategic Provider Partnerships, Provider Network Management, Health Net

Health Net Embraces Triple Aim and Paying for Value As one of the largest health plans in California, Health Net provides coverage for 2.7 million residents. They are all ages and come from all walks of life. They are covered by commercial employer-sponsored plans, Covered California, Medi-Cal and Medicare. To provide appropriate access to, and coordination of, medical care and services for such a large and varied population, we rely on both organized medical groups and individually contracted physicians. Medical decisions made at the local level between physicians and members are encouraged and our care management approaches support this philosophy. Our pursuit of what we call our Triple Aim – improving affordability, population health and the patient experience – is not possible without the collaboration of community providers. Below are a few highlights of Health Net’s efforts to pay for value.

ACOs and budget-based compensation: We support the development of care models that place the accountability for quality and cost efficiencies with provider-led organizations. A significant portion of patient care is delivered through capitated arrangements with physician groups and hospitals, or through ACO contractual arrangements. Capitated medical group or hospital arrangements provide a predictable funding stream to provider organizations that then can focus on improving the long-term health care of our members.

Besides managing to a health care cost target, it is important for us to collaborate with our provider partners, including both delegated medical groups and individual physicians, on initiatives to improve quality. Our models are transforming to include quality metrics, specific to the patient populations being served, as key elements of these arrangements. Health Net’s initiatives vary depending upon the type of members. For instance, some programs focus more heavily on improving Healthcare Effectiveness Data and Information Sets (HEDIS) outcomes, while others concentrate on ensuring appropriate and comprehensive care plans are instituted. Our stakeholders, including CMS, DHCS and employers, are aligned with our efforts to base compensation on not just the volume of services delivered, but also on the value of care, measured by indicators that speak to improved health status and cost-effectiveness.

Besides managing to a health care cost target, it is important for us to collaborate with our provider partners, including both delegated medical groups and individual physicians, on initiatives to improve quality and our models are transforming to include quality metrics, specific to the patient populations being served, as key elements of these arrangements.

We support the Integrated Healthcare Association’s Pay for Performance initiative and have adopted key principles for our commercial populations and others when applicable. We provide analytic tools and reports to our contracting providers to help them identify high-risk members and those in need of preventive care or screening measures. We encourage dialogue with our physician networks to identify opportunities on how best to collaborate on initiatives that ensure medical care is being delivered at the most appropriate place of 12

PAYERS

service and at the right time in our members’ lives. The expectation is that physicians’ practices need to evolve from caring for one patient at a time to managing a population; the adoption and integration of electronic medical records is a critical tool in this journey. Health Net can assist with our predictive modeling and other data reports to help physicians (or their medical groups/IPAs) identify at-risk patients or those with preventive service needs.

Documenting care and quality: An essential element of any value-based program is the need to deliver accurate and complete data demonstrating the value of services provided to patients for review by the payer, in this case Health Net and, by extension, regulatory agencies. The need for individual physicians to ensure that all services they provide are accurately and quickly reported to their larger medical group organization is critical to ensure the success of the delegated medical group model. ACA provisions require that we not only provide information on the type of services provided, but also provide an accurate picture of the health status of our members. We work with providers, both medical groups and individuals, to ensure that accurate diagnosis coding is captured, and we continue evolving our incentive programs to enhance our abilities to receive – and provide – accurate data. We provide opportunities for physicians to learn more about diagnostic coding and its impact on revenue and care management programs, and encourage family physicians to participate when such programs are offered, either by their medical group or by Health Net directly.

Health Net offers opportunities to collaborate across a broad spectrum of financial risk and incentive programs with the goals of increasing the transparency of cost and quality drivers, accountability and shared decision making.

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Jill Yegian, PhD, Senior Vice President for Programs and Policy, and Lindsay Erickson, MSPH, Manager, Value Based P4P Program, Integrated Healthcare Association

IHA Convenes Multiple Stakeholders to Shape Statewide Value Based P4P California’s health care market has changed substantially over the last several years, in large part due to the implementation of the ACA. The number of uninsured Californians has declined dramatically with expansion of Medi-Cal and the launch of Covered California. At the same time, the value imperative continues to gain momentum, with major federal investments in innovative models that link payment to performance, such as ACOs. These developments reinforce the importance of the work the Integrated Healthcare Association (IHA) – a multi-stakeholder leadership group focused on improving quality, affordability and accountability in California health care – has been pursuing for more than a decade on performance measurement and incentive alignment. Since 2001, IHA has served as the convener and lead organization for California’s statewide Pay for Performance (P4P) program. Performance measurement efforts have expanded to include Medicare Advantage and exploratory activities in Medi-Cal managed care. Recent developments in each of these areas are outlined below, including available and forthcoming resources for additional information.

PAY FOR PERFORMANCE IN CALIFORNIA: TRANSITION TO VALUE BASED P4P IHA’s California P4P program is designed to create a compelling set of incentives that will drive improvements in clinical quality, patient experience and resource use through a common set of measures, a public report card, health plan incentive payments and public recognition. IHA runs the program on behalf of ten health plans representing nine million commercial HMO/POS enrollees; approximately 35,000 physicians in more than 200 physician organizations (PO) participate. Since the program’s inception, plans have paid nearly $520 million in incentive payments to POs based on program results.

California POs benefit from a common rating system, avoiding the duplication and confusion that would result from each health plan creating a separate incentive program. Having a standardized measure set also benefits consumers, since California consumers can get comparable information on the clinical performance of nearly 200 POs on the website of the state’s Office of the Patient Advocate (www.opa.ca.gov).

The original measure set implemented in 2003 included 25 measures; in 2015, the P4P common measure set has grown to a total of 43 measures recommended for payment and six additional measures for collection and internal reporting. The core domains and measures used for payment are: clinical quality, meaningful use of health information technology, patient experience, resource use and total cost of care. The complete set of measures is included in the Measurement Year 2015 P4P Measure Set available at www.iha.org.

In keeping with the national movement toward value-based payment, the P4P program has been undergoing a fundamental transition in its incentive design. The new Value Based P4P program combines the incentives that previously were paid separately for quality and resource use into a single incentive that targets value.

Specifically, quality and cost trend “performance gates” are used to determine eligibility; appropriate resource use measures are used to estimate shared savings amounts; and the share of savings is determined by quality performance.

For POs that meet the total cost of care trend and quality performance gates, the design calculates total savings based on resource use performance (e.g., bed days, readmissions, emergency room visits) and determines the POs’ share based on quality performance. To maximize incentive payments, POs must succeed at: 1) improving resource use performance compared to the previous year to realize savings; and 2) performing well on the quality metrics, to maximize the share of savings.

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Blue Shield of California made the first Value Based P4P program payments at the end of 2014 and three more health plans will transition to the design for their 2015 payments. Early results indicate that many POs did not earn incentives, either because they did not meet the performance gates or because they did not improve on resource use performance over the prior year. The results also indicate, however, that the average incentive increased for those POs that did earn one.

Just as the incentive design of the P4P program has shifted from a sole focus on quality to a broader focus on value, the public recognition and reporting elements of the program are following suit. In 2014, IHA unveiled a new Excellence in Healthcare award that recognizes POs with performance ranking in the top 50 percent of POs statewide for each of three domains: clinical quality, patient experience and total cost of care. Of nearly 200 POs, 11 achieved this honor in 2014. A complete list of 2014 winners is available at www.iha.org; 2015 winners will be announced and recognized in September.

In 2015, the P4P program plans to publicly report PO Total Cost of Care performance. IHA is working with the Office of the Patient Advocate to determine how the information can be displayed meaningfully along with the existing quality and patient experience ratings.

Extensive information is available on the history, evolution and current status of P4P in California at www.iha.org.

MEDICARE STARS REPORTING The 2010 ACA empowered CMS to pay bonus incentives to Medicare Advantage health plans; these plans can generate up to five percent in additional revenue to be reinvested in health plan quality improvements or benefits to members. To support health plan efforts to reward high-performing POs, as well as to target quality improvement efforts, in 2011 IHA launched an initiative to measure PO performance on Medicare Stars measures for members enrolled in Medicare Advantage 15

MULTIPLE STAKEHOLDERS

health plans. The measure set is composed of administratively-derived HEDIS-based Stars measures relevant to care delivery; areas of focus include diabetes care, preventive screenings and all-cause readmissions.

As in the commercial HMO P4P program, IHA aggregates the data for each PO across its health plan partners to produce a more complete picture of performance and reports the results back to both plans and POs. In addition, results are publicly reported at the PO level, by county, at www.iha.ncqa.org/reportcard.

In November 2014, IHA recognized the Medicare Stars Top Physician Organizations in California. Awards were presented to eight POs that received five Stars on the Overall Star Rating, calculated using benchmarks and weighting established by CMS. Medicare Stars Most Improved Physician Organizations were awarded at the meeting as well: nine POs whose Overall Star rating improved by at least one-half star were recognized.

Lists of all of the winners are available at www.iha.org.

PERFORMANCE MEASUREMENT IN MANAGED MEDI-CAL Given the recent rapid growth in Californiaâ&#x20AC;&#x2122;s Medi-Cal population and the increasing role of managed care in Medi-Cal, it is critical to ensure the availability of actionable performance measurement results for providers serving Medi-Cal beneficiaries.

In January 2015, IHA released a new issue brief, Piloting Performance Measurement of Physician Organizations in Medi-Cal Managed Care: Findings and Implications. In July 2013, in response to interest from health plans and supported by a grant from the Blue Shield of California Foundation, IHA launched a pilot project to collect standardized Medi-Cal quality of care results in four southern California counties at the PO level. Five Medi-Cal managed care health plans in Los Angeles, Orange, San Bernardino and Riverside counties worked collaboratively with IHA to establish a common measure set and submit Medi-Cal results stratified by PO. Measurement focused on clinical quality, resource use and meaningful use of health information technology.

This pilot shows that performance measurement of POs in Medi-Cal managed care is feasible and that plans are interested in moving in this direction, measuring and reporting closer to where care is delivered.

This spring, IHA will publish an issue brief summarizing the results of an inventory of Medi-Cal managed care health plan P4P programs. A large majority of Medi-Cal managed care plans have established P4P programs for their provider networks, and the programs vary significantly in their performance targets, incentive structures, provider engagement strategies and reporting tools and frequency. A key finding is that, although most managed Medi-Cal plans operate at the county level and many already have well-developed P4P programs, there is room for greater consistency across programs and an opportunity to share best practices in incentivizing quality improvement.

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MEDICAL GROUPS

Amy Nguyen Howell, MD, MBA, Chief Medical Officer, CAPG

Moving from Volume to Value Is a Much-Needed Change HHS Secretary Burwell’s recently announced Better Care, Smarter Spending, Healthier People initiative represents a critical acceleration of the movement of the delivery system into new payment models. The move from volume to value, which has already started in California, is much-needed for our country because value-based payments ought to be aligned with clinical excellence and high quality performance.

Physician organization members of CAPG have been practicing in so-called population-based payment (capitated) models outside of fee-for-service Medicare for decades. As an example, in Medicare Advantage, our organizational members typically accept pre-paid capitation for their enrolled beneficiary population. The physician organizations are then free to invest and innovate with this payment to provide the best quality of coordinated care to their unique patient population. Medicare Advantage has shown that value-based payments align incentives appropriately, leading to the best outcomes and quality of life for our patients.

We believe that many more physician organizations will prepare for and ultimately enter risk-based coordinated care models in the near future.

The ACA increased interest in risk-based, coordinated care in fee-for-service Medicare in California and across the country.

A number of CAPG organizational members from across the country have participated in Medicare’s Shared Savings or Pioneer ACO programs. These programs allow our members to begin to coordinate care for a population that has had none in the past. The results are improved quality and, in some cases, shared savings for the provider organization.

Secretary Burwell’s announcement lights a fire under CAPG’s ongoing movement toward value-based payments. We believe that many more physician organizations will prepare for and ultimately enter risk-based coordinated care models in the near future. We see tremendous potential to improve patients’ quality of care by aligning payment models to reflect value over volume. In addition to the payment model reforms, we need to transform our practices and improve patient care processes.

Making a successful transition to risk-based, coordinated care models requires getting all the pieces to fit together and continuing to evolve to meet the growing needs of our patients. CAPG offers itself as a resource to other physician organizations that are looking to make the transition to value-based payments and risk-based coordinated care. To those who have already made the leap from volume to value, CAPG continues to lead the national movement with the ultimate goal of improving patient care by enhancing the overall patient experience and achieving clinical excellence.

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Taejoon Ahn, MD, MPH, CPE, President, John Muir Medical Group, Contra Costa County

Primary Care Physicians Must Be Leaders of Value-Based Payment Design As President of John Muir Medical Group, I see a growing shift in payment for health care services, a shift that primary care physicians can and should lead. John Muir Health participates in several ACO programs.

These programs create risk-sharing arrangements among professionals, hospitals and payers in an attempt to align financial incentives. Any success in generating savings while meeting quality metrics depends on strong leadership, a heavy reliance on support staff/administration and engagement with front line primary care.

The John Muir experience with ACOs originated from a physician-led response to the opportunity presented by the Medicare Shared Savings Program. The co-chairs of John Muir’s ACO board are respected family physicians, one from the foundation medical group and one from the IPA. This leadership structure has enabled active engagement with the front line (in varied practice settings) through relationships, institutional authority and financial incentives.

To encourage participation when possible, we structured the financial downside to accrue to the group, and the upside to accrue to the individual. The ACO medical director in charge of day-to-day administration works closely with the John Muir Physician Network administrative staff to coordinate case management, medical home, analytics and practice management efforts to better manage the populations for which we are responsible. Our hospitalists and medical home care management staff were crucial in targeting the highest value endeavor: decreasing length of hospital stays and numbers of readmissions.

All this hard work appears to be successful as our first year Medicare ACO achieved $12.6 million in savings, the highest in California, to be shared between the Medicare Trust Fund, the John Muir Health ACO administrative infrastructure and the John Muir Health ACO physician participants. This experience is translating nicely to our commercial ACOs as well.

Economic pressure from both public and private payers to move from volume- to value-based payments is forcing delivery system adaptation. There is great promise in these arrangements to deliver higher quality and lower cost in aggregate, but as the Roman judge Lucius Cassius said, “Cui bono?” (to whose benefit?). To whose benefit do ACO arrangements accrue? Many front line family physicians in California already are aligned with larger institutions, whether an IPA, medical group, academic center, public hospital or clinic.

Hence, many likely are engaged already in some systematic effort to manage quality and cost. Front line family physicians or their delegates should pay close attention to the financial and operational arrangements to which they are agreeing, however. Pay attention to the financial and operational risk burden of the individual versus the institution. Pay attention to the leadership structure of the institution and inquire whether practicing primary care physicians are calling the shots. The details and their consequences are important.

Family medicine training emphasizes a systemic approach to illness in which individuals’ health is seen in the context of their families and communities. ACOs are imperfect, but at least policy makers and payers are trying. We owe it to our patients and communities to try as well.

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Steven A. Green, MD, Medical Director, Sharp-Rees Stealy Medical Group, San Diego

Physicians Focus on Quality Measures and Patient Satisfaction I joined Sharp Rees-Stealy Medical Group (SRSMG) after completing my family medicine residency in 1988 and worked as a full-time family physician until this year, when I became the group’s medical director. In the first few years I was with SRSMG, the principle metrics we focused on were visit volumes and charges and the group shared that data with the physicians. Even then there was an emphasis on quality, but it was something that was assumed, and quality metrics were not yet a major focus for physicians.

Fast forward to the last 10 to 15 years. The group’s culture is one in which quality metrics and patient satisfaction and access are the physicians’ focus. We report data to physicians on their performance regarding A1C control for patients with diabetes, blood pressure and statin use. We focus on other value-based performance metrics looking at preventive care, such as breast and colon cancer screening, as well as immunizations, generic prescribing, chronic disease care and hospital readmissions, to name a few. Patients are surveyed by mail and electronically and the resulting data on patient satisfaction is made available to physicians. It is an expectation of all the physicians that they do well on these metrics. For the last several years, our patients have rated us more highly than any other group in Southern California, according to the California Healthcare Performance Information System and California Office of Patient Advocate. We are also involved in several ACOs in which we are demonstrating the benefit of this type of coordinated care.

Family physicians, along with general internists and pediatricians, are an integral part of the primary care team. Alone, these physicians could not do what is necessary to succeed. We work with large teams of non-physicians, including chronic care nurses and case managers, diabetes educators, pharmacists, home health nurses and others. We have an active population health department that works in tandem with physicians to leverage electronic health records and reach out to patients needing care. Within a multi-specialty group, it is important that primary care physicians can communicate easily with specialists to get patients what they need, when they need it. Telemedicine and electronic consults are becoming more common, leading to better health outcomes and more convenience for patients.

The key to making this work well is getting buy-in from physicians on the importance of these various initiatives. As leaders of the team, it is imperative that physicians appreciate and emphasize the importance of quality and patient satisfaction as well as efficient resource utilization. Focusing on things from the patient’s point of view is essential for any practice to be successful going forward.

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Lawrence Shore, MD, Lead Physician, My Health Medical Group, San Francisco

Small Steps Are Effective When Moving from Volume to Value Late in January 2015, the Secretary of HHS and Blue Cross leaders made nearly simultaneous public commitments to payment reform based on value.

Pretty great, right? That is what everyone wants.

For those of us who have lived in a volume-based system for the last 30 to 40 years, with progressive discounts and dwindling incentives, we may wonder exactly what they mean by that.

My Health Medical Group (MHMG) was established in 2012 as a prototype Advanced Primary Care practice based on the PCMH model, sponsored by our local IPA, Brown & Toland Physicians. We worked diligently to achieve NCQA recognition and did so in just under a year while working out the kinks of a new practice.

Part of the design was to include a data analyst, and, more recently, a panel manager, to see if we could define what we meant by value and how to measure it. At the time we started, we thought payment reform was just around the corner.

We began with these definitions: -Value = Quality/Price: A classic simplification of how people make purchasing decisions; -The Triple Aim: Dr. Donald M. Berwickâ&#x20AC;&#x2122;s 2007 challenge to reform health care: Improve the patient experience, improve the clinical outcomes, reduce the cost.

-Combining the two, we got: Health Care Value = (Patient Satisfaction + Clinical Outcomes)/ PMPM cost The next challenge was how to quantify each element and develop reasonable metrics that provide timely performance feedback and guide performance improvement.

It is critical to have an electronic heath record (EHR) with structured data that can be rearranged to suit your needs. Starting with that, it helps to engage providers with the notion that it is our professional responsibility to manage population health (even if you do not get paid for it at the beginning) as well as individual health.

Once you have provider buy-in, data is best presented in a graphic format that tells an obvious story in under six seconds. Most providers start out by questioning the reliability of the data and the credentials of the analyst, who is not a physician, after all.

Of the three components in the value equation, clinical outcomes are the easiest to relate to. Measuring outcomes has evolved from pay-for-performance and now is based on a widely accepted set of performance benchmarks available through the IHA (www.iha.org). Patient satisfaction is a bit more challenging to measure, but metrics and standardized patient questionnaires are available through various vendors. Cost data is easiest to assess in an HMO setting and a bit more challenging for ACO and Preferred Provider Organization plans, particularly those with high deductibles.

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PHYSICIAN PRACTICES

At MHMG, we have created a conceptual value calculator by setting goals for seven clinical quality measures and two key patient satisfaction measures chosen by our IPA’s Physician Compensation Committee.

Our analyst extracts data for our whole patient panel (about 8,000 patients) and produces monthly and quarterly reports for MHMG and each of our four care teams. We use per member per month cost data from the IPA on a rolling 12-month basis; our practice goal is to be five percent or more below the IPA’s average.

Reports are all simple three-color charts. Most reports are transparent, which engages our providers’ natural tendencies to compete for superior performance (once a pre-med, always a pre-med).

Our clinical results, supported by outreach by the panel manager and care gap analyses performed by our medical assistants before the morning huddle, show consistent improvement in diabetes management, hypertension management, cancer screening and annual wellness exams for seniors.

Our cost reduction results have been encouraging, especially for Medicare Advantage patients. Accurately measuring patient satisfaction, based on standardized questionnaires, remains a bit of a puzzle. We are developing an in-house version that should work well on Survey Monkey.

Our experience at MHMG shows that transforming a primary care practice into a PCMH and establishing metrics to guide and measure care are achievable, with hard work and dedication. These changes result in many benefits for patients, physicians and care teams.

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Benjamin Mahdi, MD, MPH and Tarek Mahdi, MD, FAACP, Riverside Family Physicians, Riverside

Value-Based Payment Drives Innovation in Primary Care In primary care, the traditional health care model is based on fee-for-service payments. The incentives are to see the maximal number of patients in a given day and physician salaries and bonuses often reflect their ability to efficiently see the greatest number of patients. This often means seeing 30 to 40 patients a day with 10- to 15-minute time slots per patient. In this model, physician panels are often between 1,500 and 2,500 patients and the focus is on volume rather than quality. In 2005, CMS took the first step to reform the payment system with a P4P demonstration program.

Today, quality is at the forefront of almost all health care regulatory or legislative policy changes. Physicians are paid global fees based on how well they manage their populations and the PCMH model is designed to coordinate the delivery of health care, all with the intention of delivering better quality and outcomes. These two elements, health care delivery reform through the PCMH and value-based payments, have created the perfect environment for innovation in health services.

Take our medical group for example: in 2012 we gained NCQA PCMH recognition and completely transformed how we delivered care to our patients. We switched to a team-based approach in which each physician worked with two patient care coordinators in collaboration with a nurse practitioner. Each member worked at the top of his or her potential and licensure, creating an effective and efficient team. We then tasked all the teams to address issues we had in our practice and held brainstorming sessions. Everyone from receptionists to physicians to billers was involved in the process, resulting in personal ownership and pride. We also created a bonus structure for the staff based on the performance of the individual teams on certain chronic disease metrics. Our entire group focused on delivering the highest quality of care.

Each member worked at the top of his or her potential and licensure, creating an effective and efficient team. We then tasked all the teams to address issues we had in our practice and held brainstorming sessions.

Everyone from receptionists to physicians to billers was involved in the process, resulting in personal ownership and pride.

To meet the growing needs of patients, we also expanded beyond office visits. When appropriate, we delivered care via our secure web portal, for example, and our registered nurses helped triage a large number of our visits. The result, from January 2014 to now, was that our group grew an average of 500 new patients per month while still maintaining our quality indicators. Further, each physician has increased his or her panel and can manage nearly 4,000 commercial equivalents, twice the normal load, without experiencing an increase in visits.

By thinking beyond the fee-for-service payment model and embracing value-based reimbursement, we are leveraging the PCMH to deliver better care to more patients. To us, this is the future of medicine.

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Elaine Skoch, PCMH-CCE

Drilling Down: A Primer on Billing for Care Management and Other Steps to Maximize Payment On January 1, 2015, Medicare began paying separately under the Medicare Physician Fee Schedule (PFS) for non-face-to-face care coordination services furnished to Medicare beneficiaries with multiple chronic conditions. CPT code 99490 is used to report these services, now known as Chronic Care Management (CCM).

Paying for this new benefit is part of the “broader multi-year strategy to appropriately recognize and value primary care and care management services,” CMS states. Just last year, CMS introduced similar coverage for “transitional care management services” for patients discharged from a hospital or skilled nursing facility.

CMS recognizes care management as one of the critical components of primary care that contributes to better health and care for individuals, as well as reduced spending. By offering clinicians incentives to actively manage patients with multiple chronic illnesses, CMS sees an opportunity to improve the quality of care while cutting costs. In a study of Medicare fee-for-service beneficiaries with 15 major chronic illnesses, such as hypertension, hyperlipidemia and ischemic heart disease, the agency found that seniors with four or more conditions accounted for 37 percent of all beneficiaries, but 74 percent of total Medicare spending in 2010.

Historically, payers have taken the position that payment for non-face-to-face care management services (e.g., medication reconciliation, coordination among providers, arrangements for social services, remote patient monitoring) is bundled into the payment for face-to-face evaluation and management (E&M) services.

These payments, however, do not cover the significant staffing and technology investments required for chronic care management.

The definition of CPT 99490 is “Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month, with the following required elements: multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; comprehensive care plan established, implemented, revised, or monitored.”

Meeting requirements to bill for CCM Building care management structures to meet CMS’s CCM payment methodologies is more about formalizing documentation processes to receive payment than implementing new processes. Many practices are already doing the work but not getting paid for it. Assembling a practice team knowledgeable about aspects of the care processes required to deliver the CCM elements is useful. This team would include someone knowledgeable about how the EHR can be structured to meet documentation requirements; a physician champion willing to pilot proposed new processes and troubleshoot challenges; individuals who understand the current workflow and are willing to design incremental changes; and someone who understands billing to ensure the practice receives payment for the work done.

The first step is identifying patients who may be eligible to participate in CCM as described by the CPT 99490 criteria listed above.

Identification of benefit to the patient from ongoing care management must be made and included in a comprehensive care plan that is implemented and reviewed on a regular basis. Services need not be provided 23

PRACTICE COACH by the identified provider (physician, clinical nurse specialists, physician assistants or nurse practitioners), but the care must be directed by a provider, related to the treatment/care plan and provided for 20 minutes or more in the month before the service code is billed.

Specifically, CMS requires the billing practitioner to furnish an Annual Wellness Visit (AWV), Initial Preventive Physical Examination (IPPE), or comprehensive evaluation and management visit to the patient prior to billing the CCM service, and to initiate the CCM service as part of this exam/visit.

Patients must explicitly agree to the provision of services, and patient engagement is crucial for overall success. The approach to patients and their caregivers to explain how the program works is key to achieving agreement to participate. Discussions with the patient, led by the provider, explaining the potential benefits have been much more successful than discussions led by Historically, payers have another member of the team. An agreement signed by the patient or designated caregiver is recommended and must taken the position that be documented in the patient’s medical record.

In the discussion related to consent, the information must address the following elements: care management for chronic conditions; a description of the detailed review and updating of the patient’s medication list on a regular basis; development of a patient-centered care plan with a copy to the patient; information that the care plan may be shared with other appropriate providers and staff who are helping with the patient’s care; and information regarding the fact that the provider and team may coordinate with home and community-based providers of the patient’s care. Patients must be advised and authorize that electronic communication of medical information may occur with other providers involved in their care. Patients must also be advised there may be a co-pay for the service. The CCM process then can be continued as long as the patient does not withdraw consent for services.

payment for non-face-to-face care management services is bundled into the payment for face-to-face evaluation and management (E&M) services. These payments, however, do not cover the significant staffing and technology investments required for chronic care management.

Eight elements are within the scope of CCM services. Care management services must be accessible 24 hours a day, seven days a week (24/7) and the patient must be able to receive care on a continuous basis from the identified provider or the provider’s team. The care plan is based on a comprehensive assessment that includes attention to the physical, functional and psychosocial needs of the patient; medication reconciliation; and supervision of the patient’s ability to manage his or her medications. The patient/caregiver is to receive a copy of the care plan, either written or electronically, and this should also be documented.

Services provided under the CCM code must also be documented in the medical record. Examples of the types of services that can be included are: following up to make sure prescriptions are filled and to determine whether the patient is experiencing any side effects as a result of taking the medication; arranging for referrals and exchanging information with specialists for management of the patient’s chronic conditions; arranging for transportation for rehabilitation; securing Meals on Wheels; and following up after an emergency department (ED) visit or discharge from the hospital.

Individual patient preferences, representative of the patient’s values, must be reflected in the patient’s care plan and plans for communicating with the patient or caregiver through a variety of methods is also required.

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As with any new program, staff members, within their purview and scope of practice, must be trained to assist in identifying patients eligible for CCM services. Determining who will manage portal messages, respond to phone calls, follow up on changes in care plan and medications and facilitate messages between care providers are just a few of the elements that must be addressed as the CCM program is rolled out in practice.

Documentation of care management/coordination interactions and interventions also is integral to meeting CCM requirements. This information must be available electronically and shareable with everyone who may furnish services to the patient, especially if their time is part of the time being billed for in CCM coding.

Moving from individual- to population-based health Advancing care management is no longer just about taking care of patients when they come to practices for acute, episodic care; we now have a responsibility to care for our entire patient population in a more planned and evidence-based way. We are responsible for making sure patients receive the appropriate preventive care and for more closely managing and monitoring patients with chronic conditions to help them maintain the highest level of wellness.

Some specific areas of change in care delivery and care management when moving from volume to value involve these factors: â&#x20AC;˘ Basing care on a comprehensive health assessment of each patient: This information is periodically reviewed and updated and addresses the whole person, including his or her medical, psycho-social and spiritual needs. Determining who can gather which aspects of this information, how and what information is communicated to other team members and what health goals are important to the patient are just a few of the considerations in this process. â&#x20AC;˘ Planning for a visit: The office visit starts before the patient walks into the practice and may, in the future, not always include a face-to-face encounter. Pre-visit planning includes reviewing health records to determine what other services can be delivered during the visit (such as immunizations); making sure test results and referral feedback have been received; and, when managing chronic diseases, ordering tests prior to the visit so that information available at the time of the visit increases the relevance and outcome of the visit.

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PRACTICE COACH

• Maximizing the value of the visit: The thoroughness of pre-visit planning and the level of patient engagement during the visit help determine the value. Focusing on shared decision-making and setting goals with the patient lead to increased activation and behavior changes on the patient’s part.

• Follow-up: This can occur after an office visit or as a part of the CCM plan when it is necessary to determine whether the patient or the patient’s family members have followed through on the plan of care established at the visit. Evaluating for complications of changes in medication regimen, transportation challenges, referral follow-through and other care needs are included.

• Population management: Population management includes the provision of care for all patients in a practice, whether they have come in for care or not. Population management has many levels: the first is identifying the patients attributed, perhaps by payer, or in some instances by geographic proximity.

The second is defining new roles for medical practice functions that contribute to meeting the requirements of population management (e.g., creating lists or registries of patients with common characteristics).

This is a fairly simple function accomplished through a reporting mechanism in an EHR or by using technology that pulls the information from an EHR into a report. To run a report does not require higher education; someone working at the front desk or answering phones can do it. Having a protocol in place for how often the report is run, however, and how to validate data, determine gaps in care, identify issues with documentation in the medical record or perform outreach activities may require additional training and attention to workflow processes.

• Managing referrals: In the past, we have not always done a good job of following through on managing referrals, which has created serious complications in the traditional practice of medicine. Meeting the new paradigm includes establishing relationships with specialists based on agreed upon evidence-based guidelines and co-management processes, making sure feedback is received in a timely manner and closing the loop by notifying the patient of normal and abnormal results. This also includes exchanging testing and laboratory information with other providers to prevent unnecessary re-testing and imaging.

• Improving the management of transitions in care: This is probably the most significant structural change in terms of managing costs of care. Establishing relationships with local hospitals and emergency departments (ED) to facilitate communication about patients prior to admission (to the ED or hospital) and for follow-up upon discharge is essential. The value of this focus is on the timeliness of the intervention to avoid medical complications. If care providers in these facilities know your practice can see patients the next day, the patients’ conditions are not life threatening and patients can reach the practice 24/7 to discuss next-day care, ED providers will be less likely to admit in instances they previously may have.

A common complaint at many EDs is that patients cannot identify their primary care physicians (PCPs). One solution is for practice staff to create small, wallet-size cards that patients can carry to identify their PCPs when admission to an ED or hospital is being considered.

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Validating improvements in care and continuously improving How does a practice know when the quality of care is improving? Data is available from a variety of sources.

Many practices use cost data provided by payers. Metrics include the number of hospitalizations and readmissions that occur, with special emphasis on costs associated with hospitalizations related to ambulatory-sensitive conditions. The focus of this metric relates directly to CCM and provides the impetus for more intentional management of patients. The problem with data from payers is that it is not timely; it is often three to six months post-occurrence and, in many instances, is not actionable as a result.

A better method is to identify your practice’s patients who fall in the higher categories of risk and complexity (see, for example, the AAFP’s Risk-Stratified Care Management and Coordination chart) and use the population management methodologies discussed above. Once the list of patients is established, proactively reaching out to patients and working with them and their families to help them understand that the practice is the first point of contact for health care needs (unless their condition is life-threatening) sets the tone for the “health care partnership.” Patients at highest risk are more likely to benefit from CCM interventions.

Another task that strongly influences outcomes and costs is medication reconciliation. This should be done within a few days of a patient’s discharge to avoid complications from medication interactions and contraindications. Here again, the exchange of admission and discharge information from the hospital/ED with the PCP and the provision of clinical histories and pertinent medical information from the PCP to the hospital/ED can be major contributing factors.

Knowing how your practice will be measured, knowing the metrics used for incentives and paying attention to your practice’s outcomes are no longer only the work of the provider. To truly affect outcomes, all members of the practice team must be involved and understand how what they do or do not do in day-to-day care delivery processes affects outcomes.

Tracking and trending data over time, performing cycles of workflow change and monitoring the effect over time will lead to continued improvement. To be most effective, the quality improvement program must involve sharing data, on a regular basis, with all levels of care providers within the practice. Examining the results and implementing new workflow processes can improve efficiency, allow team members to function at their highest level of capability and licensure and create an atmosphere in which patient outcomes and satisfaction are improved, costs are reduced and members of the health care team feel more rewarded for what they do.

CAFP would like to acknowledge coding and billing consultant Mary Jean Sage’s contribution to this article.

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For more information on PCMH, payment reform, resources and more, visit www.familydocs.org.

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Š 2015 California Academy of Family Physicians, San Francisco, CA, USA. All rights reserved.