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Pay For Performance, Alabama, Medicare, and the ACA

November 25, 2013

In a recent column (Will Pay-For-Performance Pay Off), sponsored by Cognoscenti and Northeastern University, Gary Young, Director of the Center for Health Policy and Healthcare Research at Northeastern University, had the following observation. “There’s a trend in youth sports. We don’t keep score and everyone gets the same size trophy at the end of the season. Well, that’s been the basic model for the healthcare system in the United States. We didn’t keep track of how well providers were doing their jobs and we gave them all the same size trophies. We called it “fee-for-service”…” At about the same time (October 24, 2013), an article in Health Leaders Media by Philip Betbeze titled “The Trouble With Pay-For Performance” goes into several of the issues that will affect the success or failure of these payment models, specifically, “P4P incentives too small.”
Pay For Performance in Alabama
In Alabama, we have been somewhat insulated from some of the pay for performance push. While United Healthcare, Humana and other commercial payers have been assertive, if not aggressive, in other parts of the country in pushing ACO’s, Patient Centered Medical Homes (PCMH) and other performance based models, there has been relatively little interest here in Alabama. However, BCBS recently updated their primary Care Value Based Payment Program to provide a 10% (up from 5%) bonus on all medical and surgical codes for those physicians achieving a score of 70 in the Administrative Measures section. Attaining a PCMH level 3 designation (or lower level with some other qualifiers) meets that requirement. In addition, a group can get a 20% discount on PCMH submission fees with the NCQA using a BCBS discount code. So, while it’s not called a Pay for Performance plan, if you combine the Administrative section with the Efficiency and Effectiveness of Care sections (totaling a 20% bonus if all three components are achieved) , the basic elements are there. Also coming is the Medicaid Regional Care Organization (RCO) program. While specifics have not been provided except to set up the 5 regions and state that providers will still be paid based on the Medicaid fee schedule there will have to be some performance (shared savings) elements for this program to be successful.
The SGR and Pay For Performance
As a final, and possibly most significant example of where things are headed, the House Ways and Means Committee released its “Sustainable Growth Rate (SGR) Repeal and Medicare Physician Payment Reform” draft on October 30, 2013. It is clear the push is on to do away with the SGR program. In its place, payments would be based on four assessment categories. These are, 1) Quality, 2) Resource Use, 3) Clinical Practice Improvement Activities and, 4) EHR Meaningful Use. While still in its draft stage, it is clear form the proposal that Pay For Performance is where we are headed. The timeline calls for the Value Based Program (VPB) to apply to all physician by 2017 and physician assistants, nurse practitioners and clinical nurse specialists by 2018.
The Accountable Care Act
The ACA has received a lot of publicity due to its role in the government shutdown in October and the well documented problems with The website and its impact on some health insurance plans causing individuals to lose coverage they like. One problem is separating the ACA impact from other programs like those outlined above. While some of the new payment models have their roots in the ACA, it is clear some have taken off and will be around no matter what happens with the ACA. It is doubtful the ACA will be repealed. However, with so many problems being faced, there may be leverage in Congress to force some changes. This will be played out more in early 2014.


Marketing Your Practice

August 21, 2013

Thirty years ago marketing in healthcare was primarily limited to a few aggressive individuals / practices that purchased business card sized ads in the Yellow Pages. The “ads” themselves usually listed physician names, addresses and phone numbers and, sometimes, specific sub-specialties or areas of expertise. The unspoken rule was to talk about facts and never disparage your competition. For other professionals (lawyers, accountants, etc.), marketing was even more discouraged. Now, the basic rule of not talking bad about your competition remains but just about every other restriction has flown by the wayside. There is still, often, reluctance in healthcare for physicians to “advertise”. However, focusing on the education side as opposed to this month’s special, is the future. So, how should physicians market themselves today and tomorrow?
For today, physicians still get most patients from referrals from other physicians or word of mouth among relatives and friends of existing patients. However, word of mouth has expanded from the telephone or chance meetings to the internet where bad things are reported instantly and good things occasionally get mentioned in passing. However, just like the old word of mouth method, bad things get repeated many times and we have even less control of the facts. As a recent television commercial says, tongue in cheek, “you can’t put anything on the internet if it’s not true”. The new reality is that marketing both proactively, and defensively (watching out for bad comments), is a must.
Physicians should always look for ways to market their positives. This doesn’t have to be through an “in your face method”. Better, talking about the positives of your practice such as services, and access, is a much better approach for direct patient marketing. For marketing to other physicians the same thought is true. For both patient and other physician marketing, other things like turnaround time on reports, patient satisfaction and participation in the various quality programs is important if a provider wants to try to differentiate themselves from the pack. Of course, the fact that much of this type data is available from other sources on the internet, makes being proactive that much more important.
For the future, it will be even more important to talk about the old points like access and services, but with additional, increasing, emphasis on performance. When patients can look online at quality indicators, no matter how accurate they are or how well someone understands what they mean, knowing what is being said about you, correcting it where required and possible and being out front with your own data can be critical. That is true of marketing to patients and other physicians. For example, a specialist marketing to a primary care physician might focus on the ability to communicate reports and the quality of testing they perform, while still avoiding the issue of talking bad about someone else.
There’s a new element to consider also. As payers move toward more quality and efficiency based payment methods, knowing your own data, and improving on it where needed, will be a major part of any marketing program. Being able to actually show your “patients are sicker” or you are more efficient so your costs to the healthcare system is low puts you a step ahead of your competition. For example, when primary care physicians are rewarded for efficient (quality and cost) by providers like care organizations (ACO’s, etc.), the prudent specialist should know their data and be willing to put it in front of their referring physicians. Again, this can be done by showing your data and not putting someone else down. Of course, with the Medicare Physician Compare website beginning to pick up steam, you could always let the internet handle your marketing for you. After all, everything on the internet is true and easily understandable, isn’t it?

Patient Centered Medical Homes

June 3, 2013

As the healthcare world changes, we must always be on the lookout for ways to improve both patient care efficiency and quality.  The Patient Centered Medical Home (PCMH) concept came into existence a few years ago as a collaboration of the National Committee for Quality Assurance (NCQA) and other quality focused organizations.  Depending on the payer mix in different areas, there are financial incentives available for groups who attain the PCMH designation.  With that in mind, Cockrell and Associates, LLC (CAAHMS) is expanding its efforts in promoting and assisting with the implementation of this model.

With our increased emphasis on the PCMH concept, in addition to our work on other delivery models, CAAHMS is proud to congratulate Jordan C. Cockrell, MPH, OCMH-CCE, on being one of the first to earn the designation of NCQA Patient-Centered Medical Home (PCMH) Certified Content Experts™.  The newly certified experts include physicians, nurses, allied health care providers, social workers, psychologists, medical technicians, hospital administrators and independent consultants. 

The Certified Content Experts completed two rigorous PCMH education seminars and passed a comprehensive exam validating their knowledge of NCQA Recognition standards and guidelines, application procedures, survey processes and documentation requirements. The designation of NCQA PCMH Certified Content Expert is valid for two years and is renewable.

Content Expert Certification gives practices seeking NCQA PCMH Recognition a way to gauge the qualifications of the growing numbers of consultants and other professionals available to help practices prepare for NCQA PCMH evaluation. By bringing measurement and transparency to the marketplace that has developed around NCQA’s PCMH program, Content Expert Certification helps the medical home model spread and improve the health care delivery system.

Opportunities for Specialties

May 10, 2013

As this is being written responses are being formed with regards the release of hospital charge information by Medicare (CMS).  In the major cities in Alabama, competing hospital’s fees for specific illnesses have been printed for the general public to see.  Of course, few patients get hit with the full fee but the question does come up about why one hospital has a fee structure over twice the rate than another, similar hospital in the same city.  Particularly in cases where the same medical groups involved with the diagnosis goes to both hospitals which is not an unusual event.  The big numbers get the headlines but the details require careful review. 


The issue in the past, and present, is how we measure quality (immediate outcome, long term outcome, best case scenario, etc.) and costs, on a patient specific / large volume of patient’s basis.  These points continue to be debated with the answer often having been, it costs more to take care of my patients because they are sicker.  Then it becomes the argument of proving that “sicker” definition.  Today the best we can do is look at the number of diagnoses reported on a claim form and develop some type of Co- Morbidity Index (CMI).  That is then a function of how many diagnoses spaces are there on a claim form and how do we identify which ones to use.  That creates a daunting, and often imprecise, task.  However, it is one a physician must deal with.


The opportunities for specialists all revolve around understanding this data and improving on their data input process.  If a specialist can “prove” their patients are sicker and that they, and their hospital, have a lower cost to the system, they can argue they are the ones who should be treating those patients.  If their data does not support their position, they have the opportunity to find out why and fix it.  In the new world of shared savings and ACO’s, this becomes a true marketing advantage.


In addition, like the Patient Centered Medical Home (PCMH) concept, the NCQA is preparing to release the guidelines for Specialty Centered Medical Homes (SCMH).  The details are still in the works but it is likely that, like those groups attaining PCMH status, there will be financial incentives for those groups who meeting the quality and operational measures being developed.  That qualifies as an opportunity that is really based on what most groups are already doing, it’s just the documentation / formality process that has to be met. We are in an information driven world and the opportunities are there for those who grasp them.

More on Technology and a Move to Opportunities

February 20, 2013

In last month’s article, we used a good deal of space talking about the expanding role of electronic data, particularly that of an Electronic Medical Record (EMR), in healthcare.  Two very valid comments we made by readers subsequent to the article.  First, it was pointed out that a practice can have the best EMR available but, if it cannot communicate with other providers, then there’s a problem.  Writing interfaces between systems, particularly competing systems or large to small systems can be costly and the practice often gets hit with it that cost.  While there are moves to have standard medical record formats, this interface issue will continue to hinder true electronic communications.  Without clear financial incentives to overcome this barrier, it will continue to hinder the move to a truly seamless and highly effective electronic medical record.

The second issue, highlighted by natural disasters both recently and in the past, deal with medical information security.  In this case the issue is not necessarily patient privacy.  Instead, it’s making sure a record survives a disaster.  Like insurance, a disaster recovery plan, can cost some money and may not ever be used.  However, the super storm Sandy issue in the northeast, Hurricane Katrina in New Orleans and localized storms and individual issues such as fires or floods, point out the need to have a good disaster recovery plan.  My years ago I had the experience of having a clinic destroyed by fire so I can attest firsthand the benefit of having an EMR. The use of and EMR is good, as long as there are regular backups that are tested on a regular basis and kept offsite (preferable not in a building close by).  Had this been the case when my clinic burned, we would not have had to rely on the side effect of records being stored so tightly on records shelving that we were able to painstakingly recover about 80% of the patient records.  Few things are worse than assuming you have a backup when the data really didn’t get backed up or a tornado that takes out an office and the facility across town where the backup is stored.

In other areas, The National Committee for Quality Assurance (NCQA) has announced a certification program for individuals or companies wishing to become certified in assisting providers interested in becoming a Patient Centered Medical Home (PCMH).  There are about 5,000 PCMH’s across the country and expectations are that this number will grow as more providers look to take advantage of opportunities in healthcare reform.  In addition, the NCQA recently announce plans to establish its Patient Centered Specialty Practice (PCSP) program.  The NCQA defines this program as focusing on specialists who strive to: 

  • Successfully coordinate care with their primary care colleagues and each other.
  • Provide timely access to care.
  • Improve communication with patients.
  • Measure performance and improve quality through continuous activities tailored to their practice’s specific needs.

It’s clear that significant focus continues to be placed on alternative delivery models like PCMH’s, PCSP’s, ACO’s and other shared savings, efficiency based delivery models.  These are in big contrast to the current Fee For Service (FFS) model which is transaction / volume based.  Making the change from FFS to these new models means, if shared saving are going to be attained, that someone is going to see their revenue go down.  That’s a tough pill to swallow but it’s an inevitable outcome as the battle to reduce healthcare costs continue.

Finally, the is significant increased focus on doing away with the Sustainable Growth Rate (SGR) factor used to establish the Medicare fee schedule.  Those reduction in costs we are starting to see have significantly reduced the cost of an SGR fix meaning it is likely some permanent fix can be achieved.  There are at least two proposals in currently in Congress to address this issue so providers may not have to deal with the annual guessing game related to the SGR and expectations are that we will finally see a real fix.

The Unstoppable March Forward of Technology in Healthcare

January 17, 2013

As 2013 kicks off, a sampling of news and information pieces confirms what is known by just about anyone in healthcare.  The Medicare SGR “fix” again came at the last minute and, in large part, at the expense of the hospitals.  More and more money is being shifted from specialists to primary care physicians.  There’s no denying primary care deserves to be properly compensated but the specialists need their share too.  So, providers are fighting over dollars, pay for performance (P4P) plans continue to develop and patients are getting more information, clear or not, on quality.  The message here is, the focus for groups wishing to stay as providers in changing markets needs to be on information, both internal and external.

In a December 2012 report titled “Farewell to Fee-for-Service? “A Real World” Strategy for Health Care Payment Reform”, UnitedHealth Group, Inc. (UHC) outlines its vision and plans for payment reform.  The report offers that the nation could save up to $1 trillion over the next decade in healthcare costs if it were possible to “unleash the potential of payment reform initiatives”.  Payer-Fusion, a health care insurance Third Party Administrator (TPA), working in thirteen states in the US provides information in a December 13, 2012 report offering that “Pay for Performance is defined as “a method of improving efficiency or the quality of care by providing direct financial incentives to physicians and healthcare provider organizations” using “performance measures that can cover various aspects of care delivery including clinical quality, safety, efficiency, patient experience, use of health information technology and a variety of other specific measures”.  Five potential benefits of P4P programs are identified by Payer Fusion as “1) Reducing Clinical Practice Variation, 2) Reducing Errors, 3) Ensuring Appropriate Care Settings, 4) Increasing Transparency of Payer Performance for Price and Quality Conscious Customers and Flexibility of Incorporation.”

Of course, in Alabama, we have a different payer set up than most states.  A dominate commercial payer, several commercial payers with a smaller market presence, Medicare and Medicaid provide payments for health care benefits.  BCBS has taken significant steps to report on quality, UHC and the other commercial payers are looking at their next steps and Medicare and Medicaid and going to play off of national reform actions.  In addition, while we have yet to see new P4P models in any significance, you can bet this model will be presented in the Accountable Care Organization (ACO) or similar plan in the near future.

So, what about the data issue?  A January 11, 2013 New York Times Article has a headline that states “Electronic health records yet to deliver, study finds”.  The article states that “The conversion to electronic health records has failed so far to produce the hoped-for savings in health care costs and has had mixed results, at best, in improving efficiency and patient care, according to a new analysis by the influential Rand Corporation.”  Indeed, the article states that “available systems seem to be aimed more at increasing billing by providers than improving care or saving money”.  That may be true, but it’s because the ideas outlined in the previous paragraph are just getting traction.  Until there are rewards, the real power of these systems will not be realized.

Today, in Alabama, a consumer, or payer, can go to the BCBS website to look up provider quality and satisfaction information, for a less intensive look at providers but more in depth info on hospitals and the new Physician Compare information being rolled out by Medicare looking at cost and quality based on the already influential Hospital Compare program. In addition The Commonwealth Fund has a website at that provides an interactive map offering data on patient satisfaction and healthcare quality across the US.  So information, however clear or accurate, exists today.

So physicians, repeating what has been said before, if they are going to be leaders in the delivery systems of the future, need to be diligent about preparing for the new world.  Electronic Medical Records are a given, particularly when they can be funded in large part by the Medicare bonus plan, and need to expand to where patient specific information can be shared by common providers.  Primary care providers need to be aggressive about learning about the quality and cost effectiveness of the specialists to whom they refer patients and those same specialists need to understand the importance of providing that same information.  Finally at some point, physicians need to work together, in the structures available for new delivery systems, on how to use this information to provide a benefit to their patients, and themselves.

“Let the government control healthcare costs” – OMG

July 7, 2011

After reading the editorial cited below, I had to respond in some way.  So here it is:

Froma Harrop is a columnist and editorial board member of the Providence (R.I.) Journal

Published in the July 4, 2011 edition of the Birmingham News

 “Let government control medical costs”

In her editorial, Ms. Harrop, discusses the statement published in Reason magazine by Peter Suderman that states, “Centralizers say that the responsibility for making tough decisions about how to keep health care costs under control ought to be made by enlightened, well-intentioned policy elites.”  The article goes further in pointing out that, when people use their own money to buy healthcare, the theory goes, they are more careful about costs.  Ms. Harrop then goes on to say, “I don’t know. These “elites beat the heck out of corporate interests trying to sell me treatments I don’t need or whose results can be duplicated at far lower cost”.  The point of the discussion is Ms. Harrop’s assertion that “what patients and doctors need is a U.S. Government website run by an enlightened, well-intentioned policy elite that studies various treatments for the same condition and compares their performance.  That’s how we can find effective, less costly, care.”  The concept of quality at a lower cost is hard to beat.  The method suggested – now that s a problem.

Unfortunately, the elements of real world answers that exist in the editorial get tied up into discussions about Republican’s fearing this approach leads to “death panels” and the fear of “corporate interests” running the show.  So, instead of focusing on answers, we get into the political debate.  And now, the public is to believe that “an enlightened, well-intentioned policy elite, can separate itself from those very issues.  Interesting thought but probably unrealistically hopeful.

In reality, decisions about healthcare are fairly basic.  Get the highest quality for the lowest cost.  Most of us do this every day as we look for low gas prices, sales on quality goods, etc.  However, there are always those who want someone else to take that responsibility, give the consumer information that the consumer acts on it, and sues someone if the information is wrong.

The truth is that we, consumers and the healthcare industry, needs to take on this responsibility ourselves.  When you go to your doctor and they say, I think you need this test or go see another doctor we typically do what Ms Harrop suggests in her comment that, “consumer-driven healthcare will mean that when the doctor says go get an MRI, the consumer drives himself to the clinic”.  That’s instead of asking exactly what are we looking for, what kind of equipment will be used,  who will be interpreting the test(s), what are their qualifications and what are their results from an accuracy and outcome standpoint.  Of course, one argument is that most providers don’t have that information in any detail about who they refer their patients to for evaluation and / or further testing.  That’s a problem and the patient, consumer, has the right to know this.  The days of Marcus Welby, MD, where everyone trusted everyone, are gone.  Things are just too complicated to base things on where someone went to school, practices medicine or gives the best talk.  So, when a patient asks these questions, it’s the physicians’ responsibility, to the best of their ability,to have the right answers, find out the answers or watch the patient exercise their right to go somewhere else.  We have lived too long in the time where patients don’t want to question or second guess their doctor because” they might get mad or not like me”.  If that’s really the case, the patient should run as quickly as they can to another doctor.

Now, the next argument is that “this information is not always available”.  Okay, let’s start with what we have.  The government and private payers have claims data which translates to cost data.  If providers aren’t careful, what’s what will be used to make healthcare decisions because, as imperfect as it is, that’s what exists.  Primary care providers need to find ways to get the appropriate information from their specialists.  This can include things like experience, disease severity, hospital length of stay and a myriad of other indicators.  If I’m a specialist, then I need be about my business putting this information together, as completely as I can, to have available to referring doctors and patients.    We have to get started now before a “well-intentioned policy elite” makes these decisions for us.  If providers can quit looking in the short-term and think long-term, they will actually have a chance to control their own destiny by providing cost-effective, high quality medicine.

The answer is for payers and providers to work together to develop this information.  Except for in a few major systems, payers have cost data and providers have quality data.  It just seems like working together to put the two pieces together makes sense.  One result of course is that someone (a provider) might not make the cut based on cost and quality measures.  The answer is, they have the right, and responsibility, to make the appropriate adjustments in their practice style.  Just like patients have the right and responsibility to manage their healthcare instead of relying on a centralized panel take care of them.  All that sounds like the often politically incorrect issue of personal responsibility.  That’s too bad because we either, as the aforementioned consumers and providers, do what is right ourselves or, we get to live with the consequences.