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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 Healthcare.gov 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.

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