Medicare Physician Group Practice Demonstration Overview & Lessons Learned

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1 Medicare Physician Group Practice Demonstration Overview & Lessons Learned John Pilotte Director, Division of Payment Policy Demonstrations Office of Research, Development and Information Centers for Medicare & Medicaid Services Academy Health Annual Research Meeting Chicago, Illinois June 29, 2009

2 Value Based Purchasing Momentum for rewarding performance Incentives for improving quality and efficiency Advancing concepts in new programs and demonstrations Institutional providers Physician practices Bundled payment Challenges Diverse & unique needs of aged, disabled and ESRD 44 million beneficiaries, 700,000 physicians, etc. Fragmented care 2

3 PGP Demonstration Overview Section 412 of BIPA 2000 (P.L ) No change in Medicare FFS payments Performance payments earned from savings from patient management Payments linked to financial & quality performance Quality assessed using 32 ambulatory care measures 10 physician groups representing 5,000 physicians & 220,000 Medicare FFS beneficiaries 3 year demonstration Extended to 5 performance years 3

4 Selection Criteria Multi-specialty practices with 200+ physicians Well developed information, clinical and management systems Organizational structure Leadership and management Financial stability Quality assurance Process and outcome improvement Implementation strategy 4

5 Physician Group Practices Source: RTI International 5

6 Assigned Patient Population No lock-in or enrollment Retrospective annual assignment Plurality of office or other outpatient E&M services allowed charges Accountable for total Part A & Part B expenditures Incentives to standardize care processes across all patients and all payers 6

7 Patient Population Characteristics Patient populations range 10,035 to 37,026 per PGP Assign 43% to 73% of patients with visit at PGP Assigned patients average five to seven visits PGP accounts for 74% to 90% of total office or other outpatient E&M allowed charges 20% to 25% of assigned patients are hospitalized 4% have three or more hospitalizations 27% have three or more HCCs 11% have five or more HCCs Diabetes, CHF, COPD, heart arrhythmias most common 7

8 Shared Savings Model No upfront payment or insurance risk Business risk for PGP Savings is a function of expenditure control and health status changes Total Medicare risk adjusted expenditure growth rate is more than 2 percentage points below target growth rate Share up to 80% of savings 50/50 based on quality and financial performance Local market area used to set target growth rate Counties with 1% or more of assigned patients 91% of assigned patients live in local market area Maximum performance payment capped at 5% of Part A and Part B target 8

9 Quality Measures Diabetes Mellitus Congestive Heart Failure Coronary Artery Disease Hypertension & Cancer Screening HbA1c Management LVEF Assessment Antiplatelet Therapy Blood Pressure Screening HbA1c Control LVEF Testing Drug Therapy for Lowering LDL Cholesterol Blood Pressure Control Blood Pressure Management Weight Measurement Beta-Blocker Therapy Prior MI Blood Pressure Plan of Care Lipid Measurement Blood Pressure Screening Blood Pressure Breast Cancer Screening LDL Cholesterol Level Patient Education Lipid Profile Colorectal Cancer Screening Urine Protein Testing Beta-Blocker Therapy LDL Cholesterol Level Eye Exam Ace Inhibitor Therapy Ace Inhibitor Therapy Foot Exam Influenza Vaccination Pneumonia Vaccination Warfarin Therapy Influenza Vaccination Pneumonia Vaccination Claims based measures in italics 9

10 Care Management Strategies Not prescriptive Flexibility to redesign care and improve quality Develop/expand care management initiatives Reduce avoidable admissions, ER visits, etc. Facilitated by health information technology Focus on care transitions, provider based chronic care management, palliative care 10

11 Lessons Learned Leadership, clinical champions and dedicated resources critical Measures should be consistent with clinical practice and high quality care and have physician/provider buy-in Defined methodology and education and outreach critical Changing measures frequently creates provider angst Measuring quality creates opportunity to standardize processes and redesign workflows to improve delivery at point of care Providers volunteer to get early experience with initiatives consistent with their strategic visions and market objectives Demonstration findings and methodologies are being used to shape overall program policy PQRI group practice reporting option 11

12 Lessons Learned Reducing expenditure growth challenging Difficult to link savings to specific interventions Measuring savings is highly sensitive to target setting methodology, risk adjustment, demo population size Administrative, clinical, data (EHR) and financial integration appears necessary (but not sufficient) to produce savings Small financial incentives can change behavior Incentives for improvement and attainment may help maintain interest and support 12

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