On October 23rd, 2014, we updated our
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Changes in health care payment should be designed to improve quality of care received, enhance ready access to needed care, reduce disparities, and help make health care more affordable
Changes can be “carrots” – a reward for doing something – or “sticks” – penalties for failing to do something
Both carrots and sticks are being used somewhere in our health care system right now and are incorporated in both national and state health reform proposals
Consumers should be involved in shaping decisions about which incentives are adopted, especially with regard to use in public programs
Enhanced Provider Payment Models Special payments to providers for assuming more responsibility for coordination of care. Examples include: - The patient centered medical home” model In use or being piloted by public and/or private payers in several states. Medicare also will be testing. - Higher reimbursement for care of medically complex patients, as in the Indiana Care Select program for Medicaid beneficiaries with chronic and disabling conditions
Bonus payments for achieving certain quality of care goals (Pay for Performance).
Illinois bonuses to Medicaid primary care providers who achieve high scores on selected HEDIS® measures
Medicare Premier hospital quality demonstration project, rewarding hospitals for high performance in 5 clinical areas
Multiple state projects targeting asthma care
Financial Penalty Models
No payment for care required due to poor care.
Example: Medicare and Medicaid program non-payment policies for avoidable medical complications of inpatient hospital care
Financial penalties for missing quality target scores.
Example: Maryland Medicaid HMO program; Michigan Medicaid denial of automatic assignment of beneficiaries to poor performing HMO
The “Shared Savings” Incentive
Concept: providers share (i.e. receive some portion of savings as an additional payment to provider) in savings realized from delivering higher quality, more efficient care. In use in some Medicaid programs, being considered for Medicare and other demonstrations (Accountable Care Organization model, some medical home pilots).
Caution: Must be accompanied by safeguards against denial of needed care, reduced patient access to care
Extra benefits for joining managed care organization
Lower or no co-payments to encourage use of appropriate care
Examples: eliminating co-payments for preventive services, prenatal care; lower co-pays on generic prescription drugs
Combining Payment Incentives with Care Delivery Models
Payment incentives are usually part of any changes in health care delivery models
In shaping those changes, decisions must be made about which provider group to target (hospitals, primary care providers, health plans, etc.), which population group is focus (chronically ill, high risk maternity, children, entire membership), and which particular payment model or models to choose
The following state medical home initiatives reflect the variety of possible combinations
Oklahoma SoonerCare Choice
Enrolls all Medicaid beneficiaries except duals and those in home and community based care
Medical home practice can be headed by MD, advanced nurse practitioner, or physician assistant
State pays monthly case management fee per member per month (PMPM). Fee adjusted for patient age and practice’s score on NCQA patient centered medical home tool. Practice can also earn bonus for high quality performance
Alabama Patient 1 st Program
Serves all children and families enrolled in Medicaid
Designed to assure 24/7 access, reduce utilization of emergency rooms, adoption of health information technology, and improve quality of care
Practices paid variable PMPM fee, depending on success in meeting various goals. Current maximum PMPM is $3 per month
Practice also shares in savings “pool”; share based on performance in meeting targets such as fewer ER visits by its patients
Community Care of North Carolina
Serves all Medicaid beneficiaries
Designed to improve access and quality, strengthen care coordination between providers and between providers and community resources
Two part structure: primary care practices and 14 regional support networks operated by community organizations
Practice paid PMPM fee and network is paid similar PMPM fee
Networks often partner with other programs (mental health) to enrich resources available to support patients
Helping Shape These Choices
Our health care payment systems should support effective, equitable delivery of care, at the right time at the right cost
This often means a current system must change
Consumer and patient advocates must insist on being a player in making these important decisions and assure that appropriate consumer safeguards are put in place
So we must join these committees, learn about the issues, speak up and speak out. We can make a difference!
Lee Partridge Senior Health Policy Advisor [email_address]