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Medical practices and success in the new era of Medicare payment: What I learned from three early adopters

Sarah Woolsey


Important changes have been happening with the relationship physicians and healthcare organizations have with Medicare, the largest payer in our US healthcare system. Why might we pay attention? This year Medicare leadership announced that by 2018, they intend to link 90 percent of Medicare payment to value (better outcomes for appropriate cost) and 50 percent to Alternative Payment Models. Alternative Payment Models are contracts where payment is not rendered for each item of care delivered (fee for service) but is paid based on a combination of hitting quality targets and making sure the patient’s care cost the “right amount”. That amount is based on factors like a patient’s complexity, where they live, and how much should care usually cost when delivered in that region or system.

What does all this mean for family physicians? Recently I was fortunate to host a panel for the Utah Partnership for Value featuring Utah clinics participating in the Medicare Shared Savings Plan Accountable Care Organization (MSSP ACO), one of the federal Alternative Payment Models that allow for value-based payment. These MSSP value payment arrangements only started in 2012, thus these Utah clinics have some of the earliest lessons and suggestions for Utah’s success in the new arena of paying medical providers not just for volume of services, but for the best possible outcomes and quality at the right cost.  These clinics are not owned by large systems like the University of Utah or Intermountain Healthcare, but have strong primary care workforces, a long history of care as independent businesses, and have the ability to be early-adopters with this new payment offering from Medicare.

So what did they say? Not surprising was the value of capturing and sharing data from electronic health records, knowing about the kinds of patients and conditions represented in your practice, communicating to others about the care you deliver, and locating your patient’s medical information wherever they seek care. Physicians must understand their population’s needs and design care to meet those needs efficiently. No surprise then that the data that Medicare provides these clinics as they participate in the MSSP ACO shows them places where they need to develop new processes, like one clinic that is addressing their communication and relationships with home health and nursing home facilities. Inadequate transitions to home or a nursing facility might mean a readmission to the hospital or too much OT when a patient really needs more PT. Too much OT is not “the right care” for the patient and costs money that is not valued in these new contractual agreements with Medicare.

Surprising and exciting for me was the importance of buy-in by all parts of the care team to a new payment model, not just provider and organizational, but patient engagement as a critical step for success. Yes, we know that we need the care delivery teams to understand new workflows and change culture. But for deeper success, a clinic participating in the MSSP ACO has to make their system work so the patient chooses to access their clinics and services. And the system must assist the patient to better their own health. One comment stood out: “non-compliant patients become compliant” as partnership and delivery of what people actually need becomes the clinic’s priority.

Finally, do we do it for the money? So far Utah providers have not seen significant financial gain from the MSSP ACO. But research trends say the longer you participate in the ACO, the better your system adapts and efficiency is gained. The provider participating the longest is anticipating a good financial return in 2015. But none of them said they did it for reimbursement. They know that Utah already delivers efficient high quality care and our patients are overall healthier that the rest of the nation. In fact, Medicare may change some of their measurement scales to Regional-based to allow us to compare ourselves to other healthier Western Regional populations in the reimbursement formulas. These providers have engaged in the MSSP ACO because it is the wave of the future and they are committed to success. They also think ultimately it is the right thing to do for their patients.

This post originally appeared on Family Medicine Vital Signs.