This document provides an overview and assessment of issues impacting the healthcare environment and medical practices. It discusses key areas medical practices should assess to remain viable, such as participating in incentive plans, pursuing patient-centered medical home certification, and moving to ICD-10. The document also summarizes data on healthcare costs, the Affordable Care Act, Medicare payment reforms like alternative payment models, and changes being made by commercial insurers.

1. Practice Assessments for the
Changing World of
Healthcare
Opelika – East Alabama MGMA
June 18,2014
William F. (Bill) Cockrell, FACMPE
Cockrell and Associates, LLC

2. Who we are – What we do – What we’ll
do today
 Healthcare management and resource organization
 Research
 Plan
 Manage
 Services
 Credentialing
 CME
 Today
 Overview of the healthcare environment
 Areas to assess to determine your practice’s readiness to remain viable

4. Medical Practice Assessments – Why are
These Questions Important? – It’s All About
Planning and Preparing
 Do you or have you?
 Know your data
 Know your referral network data
 Know your sweet spot
 Fully participate in incentive plans
 Considered PCMH
 Monitor patient Satisfaction
 Utilize an EMR
 Moved ahead on ICD-10
 Participate in surveys
 Manage your office processes (Co-Pays, HDHP, Bank fees)

5. The Evolving World of Healthcare

6. “
”
How the Fee For Service
Model is Viewed by Policy
Advisors
“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”…”
“Will Pay-For-Performance Pay Off”, Gary Young, Director of the Center for Health Policy
and Healthcare Research at Northeastern University

7. Affordable Care Act
 It’s Not Going Away
 The ACA will get modified, not scrapped
 Modern Healthcare, January 8, 2014 – “The U.S. Chamber of Commerce has
accepted that the Patient Protection and Affordable Care Act is here to
stay and, rather than continue calling for its complete repeal, will work this
year to change what it sees as flaws in the 2010 law, the business group's
president and CEO said Wednesday.”
 Continued pressure to find new delivery models to drive down physician and
hospital costs
 Medicare is already making changes independent of the ACA
 Commercial payers are already on board with new models
 Medicaid has to change
 The number of beneficiaries can sway an election – taking something away
loses elections

8. RAND Corporation – ACA Impact Survey –
Thru March 28, 2014
 Net gain of 9.3 million with healthcare coverage from:
 ACA
 Employer sponsored coverage (ESI)
 Medicaid
 Of the first 3.9 million in the ACA market plans only 1.4 were
uninsured
 Margin probably decreased with late surge.
 As a result of the ACA plans, ESI and Medicaid growth, the number
of uninsured dropped from 20.5% to 15.8%
 Total voters in the 2012 election – 130 million

9. Healthcare Costs
Even as his health care law divided the nation, President
Barack Obama's first term saw historically low growth in health
costs, government experts said in a new report Monday.
The White House called it vindication of the president's health
care policies, but it's too early to say if the four-year trend that
continued through 2012 is a lasting turnaround that Obama
can claim as part of his legacy.
For the second year in a row, the U.S. economy grew faster in
2012 than did national health care spending, according to
nonpartisan economic experts at the Centers for Medicare
and Medicaid Services.
Associated Press, January 6, 2014

10. Healthcare Costs – The Rest of the Story
Below the topline figures, spending grew faster in some areas and more slowly in others, making
it more difficult to piece the puzzle together.
Spending for hospital care and doctors' services grew more rapidly.
So did out-of-pocket spending by individuals. That reflects the trend of employers increasing
annual deductibles and copayments to shift a greater share of medical costs directly on to
employees and their families. An issue for practices dealing with high deductibles.
Spending on prescription drugs barely increased, reflecting an unusual circumstance in which
patent protection expired for major drugs like Lipitor, Plavix and Singulair. Generic drugs
accounted for an ever-increasing share of prescriptions.
Medicare spending grew more slowly, reflecting a one-time cut in payments to nursing homes
and some of the spending reductions in Obama's health care law.
Spending for private insurance also grew more slowly, reflecting the shift to high-deductible
plans that offer lower premiums.
Associated Press, January 6, 2014

11. Medicare

12. Medicare
 SGR – What was proposed
 Three Congressional Committees combined efforts
 ”SGR Repeal and Provider Payment Modification Act”
Repeal SGR – 23% cut in 2014
Annual Update of 0.5% from 2014 to 2018
Cost of $126 Billion (down from $230+ Billion)
Starting in 2018
Merit Based Incentive Payment System
Replaces e-Prescribe, PQRS, other
5% Bonuses Starting in 2018
Alternative Payment Model (25% of Medicare
funds through APM)
Shared Savings (ACO, etc.)
Patient Centered Medical Home (PCMH)

13. “
”
A lot of thought went into crafting the repeal and replace law, with
MGMA and others in the healthcare community working with key
staffers to reach a bipartisan, bicameral repeal solution so it is very
likely that should comprehensive reform arise again next year, many
of the same provisions would be retained. Value and cost based
reimbursement is the way that CMS has been moving with their
reimbursement models as evidenced by the ACA’s Value Based
Payment Modifier, the Medicare Shared Savings Program (ACOs)
and other various quality reporting programs (PQRS, MU) – all of
which are required to be implemented by law.
April 14, 2014
Jeb Shepard
Government Affairs Representative
Midwestern and Southern Sections
Medical Group Management Association

14. Alternative Payment Model (APM)
 Professionals who receive a significant share of their revenue
through a qualifying APM would be paid an incentive
payment equal to 5% of covered professional services from
2017 (3 years) to 2022.
APMs include
A model under the Center for Medicare and Medicaid
Innovation definition (PCMH)
A Medicare Shared Savings Program ACO
Bundled Payments

15. ACO’s and Shared Savings
 Shared savings are starting on the hospital level but can include
physicians
 Accountable Care Organizations (ACO’s) (3 year terms)
 Not any real traction in Alabama, yet
 Primary care driven but control could be through a hospital or
large specialty network

16. Medicare Advantage Plans
 Example - BCBS Blue Advantage
 2013 $3.6 million paid out
 2013 $ 4.9 million left on the table
HRAs
HEDIS gap in care closure
Other
 Approximately 1,900 BCBS PCP’s eligible
 Reporting issues (i.e. Blood pressure)

17. Medicare Physician
Payments

19. npi
nppes_pr
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ovider_fi
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line_srvc
_cnt
bene_uni
que_cnt
average_
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_allowed
_amt
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_paymen
t_amt
1639125222SINGH BK 93458 L hrt artery/ventricle angio 92 89 $279.82 $1,650.00 $218.12
1639125222SINGH BK 93459 L hrt art/grft angio 11 11 $317.80 $2,700.00 $241.15
1639125222SINGH BK 93460 R&l hrt art/ventricle angio 12 12 $353.73 $2,000.00 $268.84
1639125222SINGH BK 93922 Upr/l xtremity art 2 levels 12 12 $11.31 $32.67 $8.30
1639125222SINGH BK 99204 Office/outpatient visit new 75 75 $117.74 $255.00 $92.70
1639125222SINGH BK 99204 Office/outpatient visit new 32 32 $146.89 $246.28 $90.73
1639125222SINGH BK 99205 Office/outpatient visit new 33 33 $151.49 $318.00 $118.28
1639125222SINGH BK 99214 Office/outpatient visit est 733 519 $71.43 $165.00 $55.50
1639125222SINGH BK 99214 Office/outpatient visit est 343 310 $95.57 $160.79 $49.45
1639125222SINGH BK 99215 Office/outpatient visit est 176 133 $100.46 $222.00 $78.33
1639125222SINGH BK 99215 Office/outpatient visit est 55 47 $128.73 $216.87 $71.79
1639125222SINGH BK 99223 Initial hospital care 191 173 $182.15 $308.00 $142.38
1053384974CONLEY THOMAS 93458 L hrt artery/ventricle angio 108 108 $253.18 $1,650.00 $199.05
1053384974CONLEY THOMAS 93460 R&l hrt art/ventricle angio 17 17 $343.33 $2,000.00 $274.66
1053384974CONLEY THOMAS 93571 Heart flow reserve measure 26 26 $85.62 $321.00 $68.50
1053384974CONLEY THOMAS 93922 Upr/l xtremity art 2 levels 18 18 $11.31 $37.56 $9.05
1053384974CONLEY THOMAS 99204 Office/outpatient visit new 25 25 $117.74 $252.80 $90.73
1053384974CONLEY THOMAS 99204 Office/outpatient visit new 15 15 $146.89 $250.20 $105.76
1053384974CONLEY THOMAS 99205 Office/outpatient visit new 18 18 $151.49 $318.00 $117.80
1053384974CONLEY THOMAS 99205 Office/outpatient visit new 13 13 $183.29 $311.77 $120.90
1053384974CONLEY THOMAS 99214 Office/outpatient visit est 791 671 $71.43 $165.00 $54.72
1053384974CONLEY THOMAS 99214 Office/outpatient visit est 487 429 $95.57 $161.42 $52.67
1053384974CONLEY THOMAS 99215 Office/outpatient visit est 73 67 $100.46 $222.00 $78.78
1053384974CONLEY THOMAS 99215 Office/outpatient visit est 58 54 $128.73 $216.83 $72.92
Medicare Data Excerpt

21. Physician Payment Initial Observations
 High drug prices skewing payouts to some physicians (Modern
Healthcare April 10, 2014)
 Could expose fee-for-service models that reimburse sub-specialists
at a higher rate that PCPs. (Medical Economics April 9, 2014)
 Medicare Pulls Back The Curtain On How Much It Pays Doctors (NPR
April 9, 2014)
 Data trove shows U.S. doctors reap millions from Medicare (USA
Today April 9, 2014)
 Doctors in McAllen Texas perform 5 times the CABG volume as in
Pueblo Colorado yet patients are no sicker. (USA Today April 9,
2014)

22. Birmingham News
 “Why Medicare Paid One Doctor $4.8 M”
 The Birmingham News – April113, 2014
 The “headline society” issue
 Lists doctors
 Highlights a Huntsville Oncologist
 It does disclose AMA’s “9 Cautions”
 To look up your doctor go to www.tinyurl.com/MedicareMapAL
 Or www.cms.gov

23. Commercial Payers

24. Other Payers
 United Healthcare
 July 10, 2013
 UnitedHealth Group on Wednesday announced that it expects to double its
accountable care contracts over the next five years across employer-
sponsored, Medicaid, and Medicare plans. Currently, more than $20 billion
in United Healthcare reimbursements to hospitals, physicians, and other
providers are paid through contracts linking pay to quality and efficiency
measures. Those contracts include more than 575 hospitals, 1,100 medical
groups, and 75,000 physicians nationwide.
 Humana
 May 17, 2012
Humana has begun working with providers on several new,
collaborative delivery system models that already have yielded
successful results, the insurer told a Senate panel Wednesday. “the
insurer is working toward aligning payment and care through its
different accountable care organizations (ACO) and patient-
centered medical homes (PCMH).”

26. 2015 Changes
 All three factors worth 10% - 30% total
 Fewer options in the Administrative section
 Adding specialty
 Cardiology
 Ortho
 Others

27. BCBS
 Qualifiers
PMD doctor for at least one year in good standing
Must practice Geriatrics, Family Practice, Internal
Medicine, General Medicine or Pediatric Medicine
Must utilize ETF
Must file claims electronically
Must have 24 hour on call coverage
Must be Board Certified
Must participate in all applicable BCBS of Alabama
Networks

28. What Base Do We Use for Bonuses
 Cognitive encounters for Primary Care
 Major surgery codes for general surgeons
 Specialty codes
 New measurements
 Quality
 Cost

29. Primary Care Base for Bonuses
 Typically, Primary care bonuses are based on these:
Office/outpatient visits, CPT 99201-99215;
Nursing facility services, CPT 99304-99318;
Domiciliary, rest home, or custodial care services, CPT 99324-
99340; and
Home services, CPT 99341-99350.
 In many cases, surgery and other non-diagnostic codes are
included
BCBS list is 20 pages long

30. BCBS Primary Care Value Based
Payment Program
 Current Participants (April 2014) 1,783 (of roughly 2,500 eligible)
 5% 919
 10% 602
 15% 104
 20% 158

31. BCBS Sample Primary Care Value-
Based Payment Program Benefit
 4 Internists
 Busy Practice
 25 % BCBS
 57% Medicare
 4% Medicaid

32. BCBS Financial Impact
Code Volume BCBS Fee Base 5% Extension 10% Extension 15% Extension 20% Extension
90471 252 $21.61 $5,445.72 $5,718.01 $5,990.29 $6,262.58 $6,534.86
90472 1 $11.50 $11.50 $12.08 $12.65 $13.23 $13.80
96372 461 $17.00 $7,837.00 $8,228.85 $8,620.70 $9,012.55 $9,404.40
99201 5 $37.00 $185.00 $194.25 $203.50 $212.75 $222.00
99202 24 $49.00 $1,176.00 $1,234.80 $1,293.60 $1,352.40 $1,411.20
99203 96 $73.00 $7,008.00 $7,358.40 $7,708.80 $8,059.20 $8,409.60
99204 60 $104.00 $6,240.00 $6,552.00 $6,864.00 $7,176.00 $7,488.00
99205 1 $155.00 $155.00 $162.75 $170.50 $178.25 $186.00
99211 11 $26.00 $286.00 $300.30 $314.60 $328.90 $343.20
99212 30 $39.00 $1,170.00 $1,228.50 $1,287.00 $1,345.50 $1,404.00
99213 690 $62.75 $43,297.50 $45,462.38 $47,627.25 $49,792.13 $51,957.00
99214 2680 $95.00 $254,600.00 $267,330.00 $280,060.00 $292,790.00 $305,520.00
99217 43 $63.00 $2,709.00 $2,844.45 $2,979.90 $3,115.35 $3,250.80
99218 9 $74.00 $666.00 $699.30 $732.60 $765.90 $799.20
99222 50 $107.00 $5,350.00 $5,617.50 $5,885.00 $6,152.50 $6,420.00
99223 68 $139.00 $9,452.00 $9,924.60 $10,397.20 $10,869.80 $11,342.40
99224 13 $28.50 $370.50 $389.03 $407.55 $426.08 $444.60
99231 62 $39.00 $2,418.00 $2,538.90 $2,659.80 $2,780.70 $2,901.60
99232 407 $59.00 $24,013.00 $25,213.65 $26,414.30 $27,614.95 $28,815.60
99233 136 $86.00 $11,696.00 $12,280.80 $12,865.60 $13,450.40 $14,035.20
99234 31 $116.00 $3,596.00 $3,775.80 $3,955.60 $4,135.40 $4,315.20
99235 7 $192.00 $1,344.00 $1,411.20 $1,478.40 $1,545.60 $1,612.80
99238 106 $72.00 $7,632.00 $8,013.60 $8,395.20 $8,776.80 $9,158.40
99305 1 $91.00 $91.00 $95.55 $100.10 $104.65 $109.20
99306 4 $114.00 $456.00 $478.80 $501.60 $524.40 $547.20
99307 1 $30.00 $30.00 $31.50 $33.00 $34.50 $36.00
99308 20 $50.00 $1,000.00 $1,050.00 $1,100.00 $1,150.00 $1,200.00
99309 6 $70.00 $420.00 $441.00 $462.00 $483.00 $504.00
99310 6 $87.00 $522.00 $548.10 $574.20 $600.30 $626.40
99316 0 $64.00 $0.00 $0.00 $0.00 $0.00 $0.00
99385 3 $86.00 $258.00 $270.90 $283.80 $296.70 $309.60
99396 1 $78.00 $78.00 $81.90 $85.80 $89.70 $93.60
99406 166 $13.90 $2,307.40 $2,422.77 $2,538.14 $2,653.51 $2,768.88
$401,820.62 $421,911.65 $442,002.68 $462,093.71 $482,184.74
$20,091.03 $40,182.06 $60,273.09 $80,364.12

33. BCBS Financial Impact
Base 5% Extension 10% Extension 15% Extension 20% Extension
$401,820.62 $421,911.65 $442,002.68 $462,093.71 $482,184.74
$20,091.03 $40,182.06 $60,273.09 $80,364.12

34. Patient Centered Medical
Home (PCMH)

35. Definition
 The patient-centered medical home is a way of organizing primary
care that emphasizes care coordination and communication.
 National Committee for Quality Assurance (NCQA) has
documented that medical homes can lead to higher quality and
lower costs, and can improve patients’ and providers’ experience
of care.
 NCQA Patient-Centered Medical Home (PCMH) Recognition is the
most widely-used method to transform primary care practices into
medical homes.

36. Levels of Participation
 NCQA National
 6,800 locations as of March, 2014
 33,000 PCMH Clinicians as of March, 2014
 BCBS Data for Alabama
 PCMH 190 Locations(164 Physicians )
Level 1 84 Locations
Level 2 42 Locations
Level 3 64 Locations
 Growing interest in Patient Centered Specialty Practice Recognition

37. Sample Scoring Elements
PCMH Standard/Element Points
Possible
Points
Earned
Explanation
PCMH 1: Enhance Access and
Continuity 20 14
Most policies will need to be created, but most
elements are being done in spirit
Element A Access During Office
Hours 4 4 Need policy
Element B After-Hours Access 4 3
Policy needed; After hours call log created to track
and document; Don't offer extended hours
Element C Electronic Access 2 1
Overlap with Meaningful Use; Other factors require
patient portal
Element D Continuity 2 2 All factors met
Element E Medical Home
Responsibility 2 1
Factors being met in spirit; Can advertise PCMH
status on TV in lobby
Element F Culturally and
Linguistically Appropriate
Services (CLAS) 2 2 All factors met
Element G Practice Team 4 1
Policy needed; Need to have regular team meetings;
Designated PCMH roles for staff

38. Sample Scoring Elements
PCMH Standard/Element Points
Possible
Points
Earned
Explanation
PCMH 3: Plan and Manage Care 17 11.25
Generally meeting requirements; Requires patient
chart audits
Element A Implement
Evidence-Based Guidelines 4 4 Overlap with Diabetes Recognition Program
Element B Identify High-Risk
Patients 3 0 Need policy and report; can be done easily
Element C Care Management 4 2
Meets a lot of the factors, but can improve
communication/visit preparation
Element D Medication
Management 3 2.25 Completing half of the factors, but must document
Element E Use Electronic
Prescribing 3 3 Meeting all factors

39. Sample Scoring Elements
PCMH Standard/Element Points
Possible
Points
Earned
Explanation
PCMH 5: Track and Coordinate
Care 18 13.5
Generally meeting requirements; Need work on
referral tracking/follow-up
Element A Test Tracking and
Follow-Up 6 6 Need to create policy, but all factors met otherwise
Element B Referral Tracking and
Follow-Up 6 1.5
Meeting one factor because it is a Meaningful Use
Objective
Element C Coordinate with
Facilities/Care Transitions 6 6 Need to create policy, but generally meeting factors

40. Medicaid

41. Medicaid in Alabama
 Transitioning to a Regional Care Organization (RCO)
 Probably hospital led
 5 Regions – Huntsville Hospital / Sentera just announced
 Multiple RCO’s
 Uses the Medicaid fee schedule
 How does it save money
 Better sharing of data (diagnostics)
 Eliminating high cost providers through steerage
 Steerage through shared savings?

42. Oregon Results
 Known as Coordinated Care Organizations (CCO)
 Include capitated (PMPM) and non-capitated
 Goal is better health, better care and lower costs (Triple Aim)
 Focused on the use of Medical Homes
 One year results include
 Primary care utilization up 18%
 ED utilization down 13%
 CHF hospitalization down by 32%
 COPD hospitalization down 36%
 Thirty day readmissions down 8%
 PCMH enrollment up 51%

43. Data Sources

44. Data Sources for Patients, Payers and
Providers
 Physician Compare
 Other Payer Sites
 Healthgrades
 Angie’s List
 Facebook
 Why Not The Best
 Other Sources

46. Other Items to Be On Top Of
 EMR and Meaningful Use
 If you don’t do it it’s more than just a 1% penalty. It affects your
ability to participate in delivery in the future.
 ICD-10
 It’s going to happen sometime so go ahead and get ready
 Medicare PQRS and ePrescribe
 Keep participating but these will roll into some other program
 Surveys
 MGMA – The data is great in that it helps point you in the right
direction
 HDHP
 Do you know what it costs to collect on credit / debit cards and
how to improve you opportunities?

47. Summary of Strategies

48. Assessments for Primary Care
 Do you or have you?
 Know your data
 Know your referral network data
 Know your sweet spot
 Fully participate in incentive plans
 Considered PCMH
 Monitor patient Satisfaction
 Utilize an EMR
 Moved ahead on ICD-10
 Participate in surveys
 Manage your office processes (Co-Pays, HDHP, Bank fees)

49. Assessments for Specialists
 Do you or have you?
 Know your data
 Know your sweet spot
 Educated your referrers and your patients
 Participate in incentive plans
 Been watching for the Specialty Centered Medical Home
program
 Monitor Patient Satisfaction
 Utilize an EMR
 Moved ahead on ICD-10
 Participate in surveys
 Manage your office processes (Co-Pays, HDHP, Bank fees)

50. Webinars and Slides
 Slides
 www.caahms.com
 Links - Slideshare

51. Questions

52. Contact Us
 Bill Cockrell
bcockrell@caahms.com
(205) 637-6880 (Ext 1)
 Rodger Egeland
regeland@caahms.com
(205) 637-6880 (Ext 2)
www.caahms.com