Agents of Change: ACOs Can Reduce Costs, Improve Care, Increase Income
Editor's note: During the AAFP's Scientific Assembly in San Diego, a panel discussion on practice transformation generated far more questions than the panelists could answer in the time allotted. This is the sixth post in an occasional series that will attempt to address the issues members raised -- including questions regarding accountable care organizations -- during the panel.
I recently attended a payment forum where family physicians expressed their frustrations with the existing health care system, as well as their hopes for the future. We discussed the need to repeal and replace the sustainable growth rate formula, payment for telemedicine and much more.
For every success story these FPs shared, there were others who talked about the challenges we face in primary care. It was a mix of dreams of the future and realities of the present.
One of those realities was the potential for change posed by accountable care organizations (ACOs). One physician grabbed the audience's attention by talking about his ACO, a group of about 40 physicians in Austin, Texas, that has negotiated a 5 percent positive payment differential with BlueCross and BlueShield.
Several physicians, in fact, talked of positive experiences with ACOs, which allow family physicians and other health care professionals to band together to pool data, develop best practices and make policy decisions that improve quality and reduce costs, and, ultimately allow them to negotiate contracts with the power of a larger group.
They didn't need to convince me. I'm the medical director and board chair of a fledgling ACO that received its charter from CMS in December. So far, we have nearly three dozen practices and about 50 physicians (mostly family physicians) on board.
CMS is encouraging ACO development by offering shared savings bonuses to participating practices. Those short-term incentives can invigorate and strengthen family medicine practices. But in the long run, ACOs will need to look beyond Medicare to thrive.
My ACO has already signed a three-year contract with Aetna that will pay fee-for-service, plus incentives for quality outcomes and cost savings as well as fees to cover the cost of administering the ACO. We're also in talks with two other large private payers with the goal of negotiating similar deals.
A representative of one of those payers told me his company sees itself transitioning from a traditional insurance model to a business based more on health maintenance. That revolutionary statement indicates that payers understand that fee-for-service is not the concept our future will be based on. Are we finally are on the verge of payment reform in this country?
We grew up with a health care system that had hospitals at the center of our medical communities, but that paradigm is about to shift radically, with primary care becoming the center of the health care delivery universe and hospitals becoming the satellites that orbit medical homes.
People resist change, especially when it doesn't benefit them. Health care and payment reform stand to benefit both primary care physicians and our patients. The need to change has been obvious for decades, but progress previously had been checked by political roadblocks. For the first time in my career, this shift is realistically achievable, and I'm doing my best to make the ACO model work.
So how does a family physician become the head of an ACO? There's no class or training that I'm aware of, so I did a lot of reading and networking and attended relevant conferences.
Maybe you don't want to run an ACO but you're interested in joining one and aren't sure how to get started. I was fortunate that in 2000, my small, rural practice joined an independent practice association, which became the basis of our ACO. Given that my experience might be the exception rather than the rule, I would suggest you look for a physician-owned and -operated ACO. If there are none in your area, look for an ACO that has primary care-led governance built into its operations. If other parties are in positions of authority, that ACO might not share your goals or want the kind of change you hope to be part of.
The patient-centered medical home (PCMH) was another topic discussed at the payment forum, and it's a vital part of the plans for our ACO. Our goal is for all the participating practices to achieve National Committee for Quality Assurance (NCQA) PCMH recognition within the next 12 months.
There has been a lot of concern from small practices about the cost and time needed to achieve PCMH recognition, but it can be done. My two-physician practice achieved Level 2 recognition by working together with other small practices in my area, and we have submitted paperwork for Level 3. Blue Cross and Blue Shield has pledged to provide a 5 percent positive payment differential for practices in our group that achieve Level 3 recognition.
There seems to be little question that fee-for-service is going to become a smaller and smaller part of how primary care physicians get paid in the future. We need to look at all the options available -- whether that be an ACO, direct primary care or something else -- and choose the best opportunity for our individual practices.
Finally, if you are interested in learning more about ACOs, or connecting with AAFP members who are participating in -- or leading -- ACO initiatives, you will be pleased to know that there are a number of family physicians interested in forming an ACO member interest group. At our most recent meeting, the AAFP Board of Directors approved the formation of member interest groups as a way to define, recognize and engage groups of AAFP active members who have shared professional interests. These groups will provide a forum for such members to have a voice in the development of Academy development.
If you are interested in participating in the formation of an ACO member interest group, contact AAFP delivery systems strategist Joe Grundy.
Lloyd Van Winkle, M.D., is a member of the AAFP Board of Directors.
Verifying Coverage Key for Patients Insured Via Marketplace
Implementation of the Patient Protection and Affordable Care Act (ACA) has created several challenges in our offices and to patient work flow. For instance, does your practice have a system in place to verify patients' insurance coverage at each appointment? If not, you may need to update your office's check-in procedures.
Under rules issued by CMS, certain consumers now have a 90-day grace period to pay outstanding insurance premiums before insurers can drop their coverage. The CMS rule requires insurers to pay outstanding physician charges during the first 30 days of this grace period. However, if a consumer fails to make a payment to the insurer within the 90-day period and his or her coverage is dropped, insurers will not be required to pay for claims incurred during the last 60 days of the grace period.
That means physicians could be left to work directly with patients to collect payment for services provided during those final 60 days.
The rule, which took effect Jan. 1, applies only to consumers who purchase subsidized coverage through the ACA's health insurance marketplace. The Academy has developed an FAQ to address questions family physicians may have about the new rule.
As of Jan. 24, roughly 3 million people had enrolled in private insurance through federal and state marketplaces since October. People making between 100 and 400 percent of the federal poverty level can qualify for the premium tax credit health insurance subsidy. The Congressional Budget Office has estimated that 7 million people will enroll through the marketplaces before the March 31 deadline, and 86 percent of those, or 6 million, would qualify for assistance.
Although those 6 million patients represent only 2 percent of the U.S. population, the new rule presents a challenge for those of us who care for this group of patients. Again, it will important to verify eligibility for patients who have coverage through an exchange plan at every visit.
It's not yet clear how the new rule affects physicians in states with prompt pay laws. Physicians should consult with their chapters about laws and regulations in their states.
Robert Wergin, M.D., is President-elect of the AAFP.
Physicians Sticking With Medicare … for Now
A brief recently
issued by HHS reveals some intriguing numbers about
Medicare. According to the agency, the percentage of office-based physicians
accepting new Medicare patients increased slightly from 88 percent in 2005 to
nearly 91 percent in 2012. In fact, the percentage of physicians accepting new
Medicare patients was slightly higher than the percentage of physicians taking
new privately insured patients in each of the past two years.
The numbers presented by HHS were not broken down by specialty. According to an AAFP member survey, however, family physicians are accepting new Medicare patients at a lower rate with only 81 percent of respondents doing so last year, down from 83 percent in 2010. Eighty-seven percent of Academy members participated in Medicare last year, down from 90 percent two years earlier. The percentage of patients covered by Medicare in AAFP member patient panels remained virtually unchanged at 24 percent.
The numbers published by HHS are somewhat surprising given the uncertainty presented by the sustainable growth rate (SGR) formula. It's reassuring that Medicare patients still have access to care, despite the fact that physicians are weary of the flawed formula and the annual interventions by Congress that are needed -- in lieu of an actual solution -- to avoid potentially devastating cuts in physician payments.
The SGR will trigger a nearly 25 percent reduction in the Medicare physician payment rate on Jan. 1 unless Congress abolishes the SGR or passes another temporary patch, which it did four times in 2010 and once in both 2012 and this year.
The AAFP and other physician groups continue to advocate for a permanent solution, and the Senate Finance Committee is expected to unveil its own SGR replacement bill this month. In July, the House Energy and Commerce Committee unanimously approved a Medicare physician payment bill that would abolish the SGR formula and provide an annual 0.5 percent physician payment increase for the next five years.
It is encouraging to see that the Energy and Commerce bill emphasizes moving the payment system to one that pays for value rather than the problematic pay-for-volume process that has contributed to our high costs and poorer outcomes. However, it's worth noting that the model envisioned in that bill will require practice investments by physicians, whose pay should be adjusted to reflect those investments.
So, can the two Houses agree to a solution before the scheduled cut in January? Even if they do, the SGR isn't the only issue threatening Medicare physician payments and patient access to physicians who accept that coverage. Sequestration poses small, annual cuts that would be equally devastating in the long term with 2 percent cuts scheduled each year through 2021.
The data published by HHS indicates that many physicians are willing to wait for a solution, but for how long? According to The Wall Street Journal, more than 9,500 physicians who had accepted Medicare opted out of the program last year. What will the numbers show if Congress allows the SGR's nearly 25 percent cut to take effect or if sequestration slowly chips away at payments for nearly a decade?
Nearly 47 million Americans -- or more than 15 percent of the U.S. population -- rely on Medicare. What will their access to care be like if threats to payment persist?
We know access to primary care is an issue, and the HHS data backs that up. Although 88 percent of Medicare patients and 83 percent of privately insured patients reported that they had no problem making appointments with new subspecialists, the numbers were much lower, 71 percent and 72 percent respectively, for Medicare and privately insured patients seeking appointments with new primary care physicians.
Access to subspecialty care is important, but these numbers highlight how fragmented our system has become. Primary care physicians, not subspecialists, should be the first point of contact for patients in a high quality, effective health care system. Fixing the SGR, including a positive update for Medicare physician payments, would go a long way to ensuring patients have the access they need to the right treatment at the right time.
Reid Blackwelder, M.D., is president-elect of the AAFP.
The Bargaining Chip We've Been Looking For
There is a David-versus-Goliath perception that makes many primary care physicians dealing with giant hospitals and health care systems feel disadvantaged during payment negotiations, but the truth is that every health system needs a strong primary care base.
Now, more than ever, we can prove it.
Merritt Hawkins, the national physician search firm,
periodically surveys hospital chief financial officers about how much revenue
physicians in 18 different specialties generate for their affiliated hospitals
each year. For the first time since the survey started in 2002, the CFOs
indicated in a report released this month
that primary care physicians generate more revenue, on average, than
Specifically, the report says primary care physicians (family medicine, general internal medicine and pediatrics) generated a combined average of $1.6 million for their affiliated hospitals in 2012, compared to $1.4 million for physicians in 15 other specialties.
In fact, family medicine's average in the overall list ranked third at $2.1 million, trailing only orthopedic surgery ($2.7 million) and invasive cardiology ($2.2 million). It's also worth noting that family medicine's revenue average increased more than 20 percent from the previous report while the overall average for subspecialists declined.
Merritt Hawkins president Mark Smith called it a "seismic shift" away from subspecialists and toward primary care physicians, who are "taking a greater role in driving both the delivery of care and the flow of health care dollars."
What the report also tells hospitals and other employers is that they should be spending more money on our salaries. Family medicine ranks third in generating money for hospitals, but we rank last (tied with pediatrics) in average salaries at $189,000.
To look at it another way, physicians in nine specialties make an average of at least $100,000 more than the average family physician while generating anywhere from $207,000 (general surgeon) to $1.2 million (otolaryngology) less revenue for their hospitals.
Family physicians negotiating contracts should be aware of this report, be empowered by it and make sure that the people on the other side of the table are informed, as well.
The report validates what I've experienced here in Indiana, where I am chief medical officer of Community Health Network, a system with eight hospitals.
In the mid-1990s there was a national trend of hiring primary care physicians, but hospitals tended to know a lot more about inpatient care than outpatient care. And after being disappointed with the financial results, many health systems divested from primary care.
Fortunately, we saw the value of our primary care practices, and today, roughly 200 of Community Health Network's 600 employed physicians are primary care physicians. We have such a strong primary care base that subspecialists have sought employment here based, in part, on the fact that they want to be associated with that primary care base, have the opportunity to prove themselves to our primary care physicians and earn their referrals.
Now the trend toward hiring primary care physicians is back. More than 60 percent of AAFP members are employed, and that figure is expected to top 70 percent within five years.
Merritt Hawkins speculates that the surge in employed physicians is one of the reasons for the increase in revenue generated by primary care physicians. Simply put, employed physicians are more likely to keep tests, referrals and other services in house.
But there could be more to it than that. The report also theorizes that the patient-centered medical home is a factor, and as more primary care physicians become directors of medical teams, they gain "more control of how patients access the system and how revenue streams are directed."
In our current fee-for-service world, where volume trumps value in the eyes of many, this is important information to know. But the system is transitioning, albeit slowly, to one that will be value based. So we should continue to strive to provide the right care at the right time while also knowing and being empowered by the value of the services we provide.
Clif Knight, M.D., is a member of the AAFP Board of Directors.
United Healthcare Acknowledges Payment Shortcomings
A little more than a year ago, AAFP leaders and staff members met with representatives of UnitedHealthcare at our headquarters in Leawood, Kan. During that meeting, the Academy spelled out for the large private payer that its policy of paying fee-for-service rates that are below Medicare rates creates distressed practice environments and jeopardizes patients' access to care.
the time, United's leaders expressed surprise that the insurer was paying less
-- in some cases far less -- than Medicare in some markets.
We recently met with United again at its Minneapolis headquarters. At that meeting, the company's representatives said they had looked into the information we presented at our previous meeting, and they acknowledged that we were right.
Now, they say, they plan to do something about it.
Unfortunately, United didn't offer specifics about what it plans to do in the affected markets. What we do know is that the company says it recognizes the value of effective primary care, and it is working to identify markets where it pays below Medicare. It also is developing solutions to address the problem.
So where does that leave America's family physicians? Those of us who contract with UnitedHealthcare should be aware that when our contracts are up for renewal, there is an opportunity for re-negotiation, especially for those who practice in areas where the company has been paying less than Medicare rates.
When negotiating a new contract, ask your United representative about opportunities for enhanced payment for primary care. The company's representatives told us United is willing to offer increased payments to primary care practices that meet certain criteria, such as offering electronic prescribing.
United has said that it ultimately intends to move away from a strict fee-for-service system to a "value-based contracting model" that will offer physicians rewards based on quality of care. The health plan hopes to have up to 70 percent of the patients it covers affected by this approach within the next three years.
United's representatives said they have seen the value of primary care in pilot projects in which the company is participating. The payer shared with us preliminary data from patient-centered medical home projects that showed it has reaped a 2-to-1 return on its investment in offering primary care physicians a blended payment that included care management fees, shared savings and enhanced fee-for-service.
Working with health plans -- and waiting for them to act on the information we provide -- can be a frustrating task. But we have an important message that needs to be heard: a strong primary care system results in better care for patients and lower overall health care costs.
Monday's four-hour meeting was just the first of many similar efforts for me. Every year, the Academy meets with some of the nation's largest private payers -- including Aetna, Cigna, Humana and WellPoint -- to discuss the value of primary care and the importance of fair payment for primary care physicians. I will keep you updated along the way.
Jeff Cain, M.D., is the
President of the AAFP.
Strength in Numbers for Small, Solo Practices That Work Together
When primary care physicians in my area of rural Nebraska started talking about the possibility of starting an accountable care organization (ACO) last year, there was considerable trepidation.
That fear was based, at least in part, on a lack of understanding about the concept. Physicians wondered, and rightfully so, how it would affect them. Another critical question was, "Are we going to be passive and see what happens with ACOs, or are we going to be proactive and protect our own interests?"
In the end, we did our homework, found out more about the model, how it works and -- perhaps most importantly -- how we want it to work for us. Ultimately, we moved forward with plans to start our own ACO.
We have a grant application pending with CMS' Center for Medicare and Medicaid Innovation. If successful, we would receive $250,000 up front for infrastructure. Participating practices would receive a $36 per-member, per-month fee in the first month, and an $8 per-member, per-month fee, thereafter.
Though that funding would be incredibly helpful to get this project started, we likely will move forward with plans for an ACO even if the grant application is denied. That's because we already have a highly organized group of primary care physicians working together, via our independent practice association (IPA), the Southeast Rural Physicians Association, which was founded in the 1990s as a response to managed care. Since then, the group has grown to more than 75 physicians in more than a dozen Nebraska counties.
Our IPA has given us leverage with payers because together we care for more than 100,000 patients. But it also has provided other benefits. We have quarterly educational meetings on clinical topics. We also have been able to bring in state legislators for meetings to discuss health care policy.
So why do we need an ACO?
The Affordable Care Act proposed a model of care whereby a group of physicians, hospitals and other suppliers of services could work together to provide coordinated care to Medicare beneficiaries as an ACO. This organization can be a group of physicians or it can be physicians and hospitals working together.
I have encountered a lot of concern when talking to my colleagues about ACOs. Their legitimate worry is that if a hospital or other non-primary care organization forms an ACO, solo and small practice family physicians could be left in a take-it-or-leave-it type of negotiation because they represent a relatively small number of patients.
But one option for small groups, including rural physicians, is to do what we did and form an IPA, which would represent a much larger number of patients and provide a stronger negotiating position. Another option is to form your own ACO and work with hospitals to provide subspecialty care.
For us here in Nebraska, forming our own ACO guarantees that primary care will be the foundation of our organization.
So how does it work?
An ACO is paid based on a benchmark amount determined by the expected cost per beneficiary of both Medicare part A and B. In the event that an ACO creates efficiencies that cost less than this benchmark amount, there is a shared savings plan that allows 50 percent of the savings to be returned to Medicare; the other 50 percent is returned to the ACO. It is critical that participating physicians know and understand how these savings will be distributed to providers of care in the ACO.
In our case, some of the savings undoubtedly will come from reduced emergency room trips and reduced hospitalizations. Our hospitals, including small, rural facilities, are extremely important to our practices and our patients, and we hope to work with them.
Complicating the process is the fact that some of us are employed physicians. Initially, our ACO will be limited to a group of about 48 physicians from privately owned practices in nine counties. This restriction will allow the fledgling organization to be more nimble and make adjustments quickly. Our plan is to include employed physicians once the ACO is up, running and established.
So what can you do if you are interested in forming an IPA or ACO? The first step is to reach out to other practices in your area and find like-minded physicians who want to be proactive. AAFP News Now recently published a special report about payment models, including ACOs. For those looking to learn more, this is a good place to start.
Robert Wergin , M.D., is a member of the AAFP Board of Directors.
Humana Support for Primary Care Is Encouraging
Last week, along with several members of the AAFP staff, I had the opportunity to meet with representatives from the health insurer Humana Inc., at the company's Louisville, Ky., headquarters. Although meetings with health plans often can be frustrating, I found a lot to be encouraged about during our three-hour conversation.
Humana representatives told us they are supportive of the patient-centered medical home (PCMH) and enhanced payment to align with it. One way the company is showing that support is via its participation in three of the seven pilot regions of CMS' Comprehensive Primary Care Initiative.
The CPC Initiative, which includes both private and public payers, is a CMS demonstration program that proposes to blend fee-for-service payments with a per-patient, per-month care coordination fee in several areas of the country. The program also offers practices that participate the opportunity to earn a portion of shared savings. If the CPC Initiative is shown to improve quality and lower health care costs, CMS has the authority to expand the initiative nationwide.
Humana told us it is optimistic about the success of the CPC Initiative. In fact, the company is developing an outreach program that will help identify gaps preventing primary care practices from achieving recognition as a PCMH. The company is proposing to put actual people on the ground working in practices and providing a resource to help us succeed.
The program would help practices become eligible for PCMH incentive programs and would help them be prepared if and when the CPC Initiative is expanded by CMS. Humana told us specifically that they want to help small practices remain independent and viable.
Another interesting thing Humana is doing is offering a graded care management fee based on a practice's level of National Committee for Quality Assurance (NCQA) PCMH recognition. Some payers only pay practices that have reached level three, but Humana is offering varied payments for levels one, two and three of NCQA recognition.
This stepwise approach encourages practices to make an effort, and they don't have to achieve NCQA's highest level to benefit.
The Humana meeting was our fifth meeting with a major health plan in the past 11 months. We've also visited with Aetna, Cigna, UnitedHealth Group and WellPoint. In all of these meetings, we have emphasized the importance of fair payment for primary care, including the need to fix the fee-for-service payment system. We also have stressed that a robust primary care system means better care for patients and lower overall health care costs.
We try to meet at least annually with these private payers and have seen incremental progress with each of them over time. They recognize the importance of primary care and the PCMH model. Clearly, there still is work to be done because certain payers continue to offer us payment below Medicare levels in some areas.
As I have said before, however, private payers may not change their policies based solely on our input, but without that input, they most certainly won't change.
Glen Stream, M.D., M.B.I., is
president of the AAFP.
A Meaningful Discussion About Meaningful Use
More than 43,000 health care professionals have collected more than $3 billion in meaningful use incentive payments, according to CMS. And I was pleased to learn this week during a May 15 meeting at the Office of the National Coordinator for Health Information Technology (ONC) that family physicians are leading efforts to upgrade medical record technology and are by far the largest recipients of meaningful use funds.
That's not surprising, considering that we are involved with -- and often coordinate -- complex care that requires communication with subspecialists, hospitals and health plans.
Given a few improvements in the regulations -- such as holding electronic health record (EHR) vendors to a standard to ensure interoperability -- even more of us could qualify for meaningful use payments. And that is what we told Farzad Mostashari, M.D., M.S., the national coordinator for health IT (who is pictured with me below) and other ONC staffers during our meeting.
The timing of the meeting could not have been better. ONC and CMS are in the process of reviewing submissions from an open comment period, which ended May 7, regarding proposed stage two meaningful use requirements. The fact that the federal agencies are in the midst of the rule-making process precluded them from talking specifically about meaningful use requirements, meaning it was a listening session for them.
We were happy to do most of the talking.
On May 7, the AAFP sent a letter to CMS asking the agency to show restraint in making changes from stage one to avoid discouraging physicians who are now entering the program. I reinforced the points of that letter during the meeting, including our objections to the following:
- rules that penalize physicians for the inaction of others -- including patients -- outside the practice;
- CMS' proposal to allow EHR vendors to opt out of complying with a standard that deals with simplification, interoperability and universality of EHRs; and
- penalties against physicians who do not demonstrate meaningful use of EHRs.
The meeting with ONC also coincided with the Family Medicine Congressional Conference, so 17 family physicians were able to attend and provide their own perspectives. Those physicians represented a wide range on the meaningful use spectrum. Some had received meaningful use funds, some were close to qualifying and others were not.
Some physicians spoke about the challenges they faced on the way to achieving meaningful use, while others vented their frustrations about obstacles that have prevented them from doing so. For example, Robert Reneker, M.D., of Wyoming, Mich., talked about competing hospitals in his area that don't share patient information. That factor, which is totally beyond a physician's control, hinders his ability to qualify for meaningful use.
Kevin Wong, M.D., of Jeannette, Pa., also spoke of warring hospitals hampering his ability to qualify and the need for interoperability standards and requirements. And John Bender, M.D., of Fort Collins, Colo., told the ONC staff about his partner, who should have qualified for a full year of meaningful use funds but only received partial credit because of a paperwork processing delay by a Medicare contractor.
We also talked about the burden meaningful use regulations put on small and solo family physician practices, which often lack the resources of larger group practices.
And we talked about the fact that meaningful use requirements shouldn't be just a box waiting for a check mark. They should be factors that actually play a meaningful role in the delivery of care.
Family physicians are leaders in the adoption of EHRs and meaningful use of that technology, according to ONC. If CMS and the ONC truly appreciate family physicians and the importance of primary care, they should ensure that their regulations are fair and reasonable so more of us are able to achieve meaningful use.
Glen Stream, M.D., M.B.I., is president of the AAFP.
Proposed Increase in Medicaid Payments Helps Patients and Docs Both
Thirty-six percent of AAFP members do not accept new Medicaid patients, and nearly 20 percent don't see Medicaid patients at all, according to a 2011 member survey. Considering that in 2008, Medicaid paid an average of 34 percent less than Medicare for primary care services, those numbers aren't surprising. In nine states, the difference was more than 40 percent.
However, that sizable gap between the two programs will disappear starting in January.
This week CMS announced a proposed rule to implement a provision of the Patient Protection and Affordable Care Act that requires Medicaid to pay family medicine, general internal medicine, pediatric medicine and related subspecialists at Medicare levels in 2013 and 2014. At least 60 percent of a physician's billings must come from specified primary care services to qualify for the payment increase.
The proposed rule would increase Medicaid reimbursement for family physicians significantly in at least 40 states. It also would increase reimbursement for immunizations given through the Vaccines for Children program.
The AAFP has been advocating health care for all for more than two decades, and these changes are important steps forward in ensuring access to care regardless of economic status. In 2010, Medicaid covered 48.6 million Americans, or nearly 16 percent of the nation's population.
The cost of bringing Medicaid reimbursement in line with Medicare -- $5.5 billion a year -- will be covered entirely by the federal government. However, the cost estimate from the Congressional Budget Office does not consider potential health care savings created by increased access to care and avoidance of care costs downstream because of increased access.
We all know that patients who don't have health care coverage often put off preventive services and wait until a small problem has turned into a crisis, which costs the entire health care system more. Increasing Medicaid payment for primary care services likely will result in an increase in access to care, improved outcomes and lower overall health care costs.
In fact, a recent study by the Commonwealth Fund shows that a 10 percent Medicare payment increase for primary care ambulatory visits -- a provision of the Affordable Care Act that took effect last year -- will increase primary care visits by nearly 9 percent. And, although the costs for overall primary care visits are expected to increase 17 percent, the study projects a 2 percent net savings for Medicare.
Under the proposed rule, we will have two years to prove it, and the Academy will be pushing Congress to continue the increased payments beyond 2014.
Although Medicare remains unstable -- with a 30.9 percent reduction in the payment rate scheduled to take effect on Jan. 1, 2013 -- there was good news on that front May 9 with the introduction of a bipartisan House bill that would eliminate the sustainable growth rate and revamp the Medicare payment system.
In contrast to our member statistics on Medicaid, 90 percent of AAFP members participate in Medicare, and 83 percent are accepting new Medicare patients. So how will increased Medicaid payments for primary care affect your participation in that program?
Roland Goertz, M.D., M.B.A., of Waco, Texas, is Board
Chair of the AAFP.
Task Force Finalizing Recommendations to Improve Fee-for-Service
Time for a quick update.
In my Jan. 19 blog post, I told you that the AAFP Primary
Care Valuation Task Force would be meeting Jan. 24 in Washington. The AAFP
formed the task force last July in response to
inadequate payment for primary care services.
At the AAFP Board of Directors meeting in March, Academy
leaders will consider recommendations put forth by the task force, which includes representatives from other primary care specialty
organizations and others with health care expertise (including Jeffrey Susman, M.D., dean of the College of Medicine at Northeast Ohio
University, who is seated next to me in the photo below).
Although I can't offer specifics about the task force's recommendations because the report has not been finalized, it is important to note that many of the recommendations are intended to result in improvements in fee-for-service payments, while others address long-term revision of payment methodology. Improving fee-for-service is critically important not only in the short term but also for the future because fee-for-service values likely will be incorporated into any new payment models.
Some of the recommendations, if approved, would go directly to CMS, and the Academy would encourage the agency to include those recommendations in the physician payment rule for 2013. Other recommendations would require congressional action and would affect the Academy's advocacy strategy.
As a whole, the recommendations represent an excellent opportunity to improve payment for primary care. There's a sense of urgency about changing the way we are compensated for our services, and we recently received good news on that front from WellPoint.
Change is needed to maintain and support viable practices, help transform our practices to the medical home model, narrow the payment disparity between us and subspecialists and increase medical student interest in primary care.
I will keep you informed.
Stressing the Importance of Fair Payment for Primary Care
For example, on Jan. 12, AAFP leaders -- including myself -- met with representatives of Cigna at the insurer's Bloomfield, Conn., headquarters. I was encouraged by the tone of the meeting and the manner in which our message -- which emphasized the need for fair payment for primary care -- was received. Several of Cigna's medical officers have primary care backgrounds, including three who are AAFP members. They actively sought our input and were not merely listening to our grievances.
Still, much work remains to be done in our ongoing dialogue with one of the nation's largest private payers. Cigna's CEO received more than $15 million in total compensation in 2010, according to Forbes. Meanwhile, the company is offering family physicians in at least one state fee-for-service contract rates that are lower than Medicare.
This is simply unacceptable. Just as we told representatives of UnitedHealthcare during a meeting in October, we told Cigna that this outrageous approach to physician payment is killing primary care practices and giving physicians little choice but to move elsewhere. If unchanged, this policy will lead to primary care deserts as docs flee these distressed practice environments.
We emphasized that the fee-for-service payment system must be fixed because primary care is grossly undervalued. New payment models are likely to have fee-for-service as a base, so it is imperative that primary care is properly valued or these new models also will be severely flawed.
Cigna and other private payers have told us the employers they work with are unwilling to pay more for health care. Our contention is that paying more in total dollars is not the issue. The issue is spending more on primary care and thereby reducing money spent on subspecialty care, urgent care and hospital visits. It's critical that employers understand that coordinated primary care is worth the investment because it can reduce such avoidable costs.
On a positive note, Cigna informed us that it has submitted
a letter of intent to participate in the Comprehensive Primary Care Initiative. In October, CMS and its Center for Medicare and Medicaid Innovation announced plans to collaborate with commercial and state health insurance plans to
support primary care practices that deliver coordinated and seamless care.
The program will blend fee-for-service payments with a risk-adjusted per-patient, per-month care-coordination fee that ranges from $8 to $40. Participating practices also will have the opportunity to share in savings resulting from the program. (Just an aside: The AAFP and TransforMED are hosting a free CPCI webinar for members on Feb. 1 at 1 p.m. CST.)
It was encouraging to hear that Cigna plans to participate, but our conversation also made it clear that the amount of the per-patient, per-month care-coordination fee will be a topic of debate with payers. We will follow up with Cigna to ensure they understand the importance of coordinated care and the value of our members' time.
Meeting with large health plans can be frustrating, but it has the potential to pay long-term dividends. Although private payers may not change their policies solely based on our input, without that input they most certainly won't change. As advocates for family physicians and our patients, the AAFP will continue to engage major health plans on issues critical to family physicians. In fact, Academy leaders are scheduled to meet with representatives of Aetna in March.
What else is the Academy doing about payment?
The AAFP Primary Care Valuation Task Force will meet Jan. 24 in Washington, and leaders from the AAFP and other specialty medical organizations are planning to meet with legislators in late January on Capitol Hill to discuss the sustainable growth rate (SGR) formula.
The Academy also is launching another wave of its grassroots advocacy campaign aimed at getting rid of the SGR once and for all.
RUC's Failings Shouldn't Deter Student Interest in Family Medicine
I recently had an opportunity to speak to more than 700 people at the Family Medicine Education Consortium region meeting in Danvers, Mass. The audience included hundreds of family medicine educators, residents and medical students.
My topic was the AMA/Specialty Society Relative Value Scale
Update Committee, or RUC, the expert panel that makes recommendations to CMS on
the relative values of CPT codes. For
the 300 medical students in attendance, I delivered a key message about the
RUC: Don't worry about it.
That idea might strike practicing family physicians as odd considering that a group of primary care docs have filed a federal lawsuit against CMS and HHS because of the agency's relationship with the RUC, and many of our members have asked the Academy to withdraw from the committee.
But the RUC, and the problems it has created, should not be a barrier to student interest in family medicine. The RUC is a problem that we are working to fix, and it will be fixed in such a time that these young people's careers will not suffer negative, long-term effects.
So what's wrong with the RUC? For starters, only five of the RUC's 29 members potentially represent primary care. The committee's flawed structure has created a bias toward procedures and subspecialists rather than preventive care and chronic disease management. As a result, primary care services are undervalued by both Medicare and the private payers who base their fee structures on Medicare.
In June, the AAFP sent a letter
to the RUC, calling on the committee to make changes in its structure, process
and procedures. In September, Board Chair Roland Goertz, M.D., M.B.A.,
explained those requests in greater detail during a meeting of the RUC's administrative
In short, the AAFP has made five specific requests of the RUC:
- add four primary care seats to the RUC with one each from the AAFP, the American Academy of Pediatrics, the American College of Physicians and the American Osteopathic Association;
- create three new seats to represent outside entities, such as consumers, employers, health systems and health plans;
- add a seat to represent the specialty of geriatrics;
- eliminate the three current rotating subspecialty seats when the current representatives' terms expire; and
- implement voting transparency.
The Academy also asked that a decision from the RUC regarding these changes be made by March 1, 2012.
Meanwhile, the AAFP has formed its own task force to review the methods used to evaluate health care services for Medicare and to make recommendations about how to properly value and pay for primary care physician services.
As for the aforementioned lawsuit, HHS and CMS must respond to the complaint by mid-November.
How exactly the process of valuing primary care services will change is uncertain, but it must change. The RUC, which has come under great scrutiny recently, cannot continue to function the way it does now. CMS has clearly acknowledged that primary care is undervalued, and the agency is working on solutions to address this problem. The AAFP is advocating for an alternate body to the RUC to provide input to CMS in the valuation of primary care services.
As I told the Family Medicine Education Consortium participants -- including third-year University of Pittsburgh medical student Diana Tucci, who is pictured above -- family medicine residents and medical students interested in family medicine should be confident that they are in the right place at the right time for a nation and a health care system that need family physicians more than ever.
I encourage students and residents to be engaged in this dialogue. The Academy has numerous opportunities for student and resident leadership. You can find out more here.
A Conversation About Fair Payment
According to a recent survey, payment issues are the No. 1 concern for AAFP members. We heard you and wanted
you to know that we are actively working on this topic for you with both public
and private payers.
Academy leaders, including myself, met with about a dozen representatives from one of the nation's largest private payers on Oct. 10 to discuss payment and your concerns.
During the four-hour meeting -- which included representatives from UnitedHealth Group and its subsidiaries, UnitedHealthcare and Optum -- the AAFP discussed distressed practice environments and clearly spelled out for company representatives that paying fee-for-service rates that are below Medicare rates harms primary care physicians and jeopardizes patients' access to care.
A number of members practicing in distressed environments
have asked the AAFP for help.
Evidence has shown that primary care leads to better outcomes and lowers overall health care costs. However, these distressed environments -- where primary care payment is especially low -- have low per capita primary care physician penetration rates, high per capita subspecialist penetration, low retention of primary care trained residents, aging primary care bases, and a decreasing number of primary care physicians.
Many health plans are offering family medicine practices -- especially
in rural areas and in areas with small- and medium-sized practices -- contracts
for fee-for-service payment that are up to 40 percent less than Medicare. Sadly,
these practices have no room to negotiate. It's take it or leave it.
We told United's representatives that such tactics are outrageous. This approach is killing primary care practices. Meanwhile, some subspecialists in these same geographic areas are being offered fee-for-service rates at or above Medicare rates, steering medical students away from primary care, driving family medicine residents out of these areas and exacerbating shortages in the primary care workforce.
Paying less than Medicare also conveys the public message that UnitedHealthcare, as both a payer and employer, does not value primary care. We urged company representatives to reconsider their corporate policy in this regard.
The AAFP's Commission on Quality and Practice is looking into the problems faced by family physicians in these distressed practice environments. In addition, a staff working group is collecting data on factors that lead to these environments, where they exist and ways the AAFP can work with constituent chapters to address the problem.
The Academy also has asked the Patient-Centered Primary Care Collaborative to address the fact that some private health plans involved in the PCPCC are offering family physicians contracts that pay significantly less than Medicare.
It is up to you as an individual physician to decide who to contract with. However, it is important that part of that decision-making process is an evaluation of whether the offered payment leads to a viable practice with quality patient outcomes.
For years, the AAFP has urged public and private payers to adopt a blended payment model that rewards primary care physicians for coordinating and managing patient care. Our meeting with United came soon after some good news on that front. On Sept. 28, CMS and its Center for Medicare and Medicaid Innovation, or CMMI, announced the launch of the Comprehensive Primary Care Initiative. The initiative will involve CMS collaborating with commercial and state health insurance plans to support primary care practices that deliver coordinated and seamless care.
The program will give participating practices fee-for-service payments and a risk-adjusted per-patient, per-month coordination fee ranging from $8 to $40, plus the opportunity to share in savings resulting from the program. This model is what AAFP has been advocating in support of the patient-centered medical home, and we encouraged the United companies to participate.
Commercial insurers interested in participating in the initiative need to submit a letter of intent to participate by Nov. 15. CMS will then recruit 75 primary care practices in up to seven regional markets for the initial phase of the project. Participating physicians will benefit from the blended payment model for Medicare and Medicaid patients as well as patients enrolled in participating private insurance plans.
AAFP leaders are scheduled to meet with CMMI staff Oct. 20 in Washington, D.C. to talk about the initiative, and we plan to discuss it again with UnitedHealthcare sometime after that CMMI meeting.
I'm confident this initiative will further demonstrate that patient outcomes improve and costs are saved when the health care system values primary care by paying for all the services we provide to our patients.
Monday's meeting with UnitedHealthcare was a first for me but not for the Academy. The AAFP meets regularly with private payers, and similar meetings with other large commercial insurers are being planned for 2012. As with Monday's meeting, the focus will be on payment and improving care coordination and quality.
Our message is simple. To ensure patients' access to care, primary care physicians must be paid at a level that matches the value of our service.
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