Physician Group Incentive Program (PGIP) Frequently Asked Questions

Physician Group Incentive Program (PGIP) Frequently Asked Questions The PGIP FAQ document is a living document, which is owned and maintained by BCBSM s Value Partnerships department. It represents a point-in-time snapshot of the PGIP program. Please be aware that the program is continually evolving, and as such, the PGIP FAQ document is updated on a continual basis. Individual questions and answers from this document may be shared externally as appropriate, but this document in its entirety SHOULD NOT be shared with non-pgip affiliated, external parties. 1 Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association.

Physician Group Incentive Program (PGIP) Frequently Asked Questions Table of Contents Click on the question topics listed below to access that particular section of the PGIP FAQ document. Table of Contents Physician Group Incentive Program (PGIP) Overview... 5 PGIP Participation... 7 PGIP Funding and Reward Pool... 9 PGIP Organization and Oversight... 12 Patient-Centered Medical Home (PCMH) Overview... 15 PCMH Participation and Designation... 15 PCMH Reimbursement Procedures... 19 Organized Systems of Care (OSC) Overview... 21 OSCs and Reimbursement... 24 OSCs in Relation to PGIP and PCMH... 24 OSC Participation... 26 PO Recruitment Information... 26 Provider Delivered Care Management (PDCM)... 28 Specialist Participation and Specialist Uplifts... 34 2

Value Partnerships What is Value Partnerships? Value Partnerships is a collection of clinically oriented initiatives that are significantly improving the quality of patient care throughout the state of Michigan. Through these initiatives, BCBSM is partnering with Michigan physicians, physician organizations, and hospitals to create an innovative and quality-based approach to reward the transformation of health care. Through collaboration and data sharing, these initiatives are: Enhancing clinical quality Decreasing complications Managing costs Eliminating errors Improving health outcomes. Value Partnerships is significantly improving the quality of patient care across Michigan and is impacting the lives of nearly two million Blues members, as well as the quality of care for all Michigan residents. Through the Value Partnerships program, BCBSM works collaboratively with the majority of the acute-care hospitals in the state and with nearly 15,500 primary care physicians and specialists to improve the health care provided to all Michigan residents. What programs comprise Value Partnerships? Value Partnerships includes the Physician Group Incentive Program (PGIP), which is comprised of 34 initiatives aimed at capability building, improving quality of care delivery, and appropriate utilization of services. PGIP initiatives are divided the following categories: Condition-Focused Service-Focused Core-Clinical Process-Focused Clinical Information Technology-Focused. Value Partnerships also encompasses the Patient-Centered Medical Home (PCMH) Designation Program, which is the largest of its kind in the country. The PCMH Designation Program has experienced steady growth, measureable results, and regional and national recognition. The number of designated PCMH physicians has grown from 1,200 in 2009 to more than 2,500 physicians in 776 practices in 2011. In addition to PCMH, Value Partnerships also includes Organized Systems of Care (OSC) and Provider-Delivered Care Management (PDCM). PGIP, PCMH, and OSC focus on incentivizing the provider community to achieve improved quality and lower cost through collaborative sharing of data and initiatives such as use of registries and alert systems to become prepared proactive practice teams. Additionally, Value Partnerships includes Hospital and Professional Collaborative Quality Initiatives (CQIs). The driving factor in framing a CQI as hospital-based or professional revolves around where the service(s) being addressed by the CQI are rendered. CQIs address some of the most common, costly areas of surgical and medical care through collaboration between Michigan providers and hospitals. Participating hospitals and providers collect, share, and analyze data through the use of clinical registries, then design and implement changes to improve outcomes associated with complex, technical areas of care. CQI registries permit a more robust analysis of the link between processes and outcomes than can be achieved by examining one group or institution. As of 2012, BCBSM is providing funding and active leadership for twelve hospital CQIs and six professional CQIs. 3

Value Partnerships also includes BCBSM s ongoing collaborative relationships with the Center for Healthcare Research and Transformation (CHRT), the Michigan Quality Improvement Consortium (MQIC) and the MHA Keystone Center for Patient Safety and Quality. What is the philosophy of Value Partnerships? Below are the tenets of BCBSM s Value Partnerships program: Focus on investments in transformation of care processes, rather than just top of mind behavior Recognize and reward performance of hospitals and physician organizations Reward improvement, not just highest performance to create meaningful incentives for all Focus on population-based cost measures, rather than per-episode cost to avoid micromanagement of care by the insurer and to foster development of effective systems of care which meet patients needs in an efficient manner Design and execute programs in a customized and collaborative manner rather than "one size fits all" How is BCBCSM s Value Partnerships program addressing the shrinking primary care workforce? BCBSM is helping to strengthen and transform primary care by empowering primary care physicians (PCPs) to effect change in Michigan through the Physician Group Incentive Program (PGIP). In 2005, PGIP began its health care transformation journey with a primary focus on stabilizing, strengthening, and transforming primary care in Michigan. At that time, PGIP participation was restricted to MDs or DOs who were PCPs or who were on a list of select specialties which frequently collaborate with PCPs in caring for patients with common chronic conditions. Though PGIP s scope has since broadened to include all physician specialties, the transformation of primary care remains a main focus of the program. PGIP PCPs collaborate on initiatives designed to improve and transform the health care system in the state. Each initiative offers financial incentives based on clearly defined performance improvement and program participation metrics. BCBSM s efforts to strengthen Michigan s primary care foundation are guided by the Patient-Centered Medical Home (PCMH) model. BCBSM s PCMH program is the largest of its kind in the nation. In 2011, over 2,500 PCPs in 776 Michigan practices were designated by BCBSM as patient-centered medical homes (more than double the number that were designated in 2009). The PCMH model, as embodied by BCBSM s PCMH-designated practices, has the potential to result in improved patient flow, better teamwork within primary care practices, more time with patients, higher job satisfaction for physicians and higher patient satisfaction. PGIP providers play an integral role in the development of the program and initiatives; all of our PGIP initiatives are co-developed with participating physicians throughout the state, who are empowered to have a voice in the transformation process that BCBSM is facilitating through PGIP. For nearly five years, we have been working collaboratively with the PGIP Primary Care Leadership Committee (PCLC), which provides advice and counsel on the planning, design, implementation and modification of PGIP and PGIPrelated initiatives. The PCLC also helps to define the future direction of the program. The PCLC is comprised of physician, nursing, and administrative leaders of PGIP physician organizations (POs), as well as individual PGIP physicians. PCLC members do not specifically represent their member POs but serve as overall representatives of the PGIP community. BCBSM is finding that by making primary care physicians the focal point of PGIP s health care transformation efforts within the state, and by empowering PCPs to play a key role in the development of PGIP and PGIP initiatives, PCPs are reaping financial benefits and gaining more leverage to discuss key issues such as resource utilization, the role and expectations of specialists, and care management at the individual and population level. Through PGIP, PCPs are empowered to transform their practices, establish multi-disciplinary teams and focus their energies on relationship-based care in ways which are energizing and fulfilling. 4

Physician Group Incentive Program (PGIP) Overview What is PGIP? BCBSM s Physician Group Incentive Program (PGIP) part of BCBSM s overarching Value Partnerships Program is an innovative incentive program that brings together physician organizations (POs) from across Michigan to encourage information-sharing about various aspects of health care. This approach supports and rewards system transformation and population level management. The program catalyzes physicians to work collaboratively with their POs to more effectively manage populations of patients and build an infrastructure to more robustly measure and monitor care quality. Program participants, including both primary care physicians and specialists, collaborate on more than 30 initiatives designed to improve the health care system in the state. Each initiative offers incentives based on clearly defined metrics to measure performance improvement and program participation. PGIP in its entirety is aimed at empowering the provider community to transform the Michigan health care system, guided by the Patient-Centered Medical Home model, in ways which allow it to better serve the whole population from a cost, quality, and experience of care perspective. Why and when did PGIP start? PGIP began in 2005 as a result of conversations between BCBSM and the Michigan State Medical Society. PGIP s collaboratively established goals are to: Transform systems of care to more effectively manage populations of patients and build the infrastructure needed to more robustly measure, monitor, and optimize quality of care Strengthen the performance improvement infrastructure available to clinicians Promote collaborative relationships with physicians, and among physician organizations, that support improved care outcomes Achieve measurable savings in specified areas including (but not limited to) pharmacy costs, diagnostic imaging and other domains of resource use Reward physicians for their improved performance and adoption of best practices in the cost-effective delivery of care while optimizing patient health outcomes What BCBSM products are in PGIP? Physicians who have PPO/TRUST and Traditional contracts are currently eligible to participate in PGIP. How do I find out more information about PGIP? The BCBSM website (www.bcbsm.com) contains detailed information about PGIP. Once you are on the BCBSM website, go to the Provider area and click on Value Partnerships on the left-hand side. Then, click on the Physician Group Incentive Program (PGIP) link. Included on the website are descriptions of initiatives and program contact information. Additionally, your BCBSM Provider Consultant can provide you with PGIP information. In addition to the BCBSM website, you can also visit www.valuepartnerships.com and click on the Physician Initiatives tab to find more information on PGIP. For further information, please review the BCBSM.com PGIP website, which can be found at www.bcbsm.com/provider/value_partnerships/pgip/initiatives.shtml. Does BCBSM endorse and/or mandate the use of certain vendors for participating PGIP POs and their physicians? BCBSM s position is that the right place for discussions about particular vendors and vendor tools/offerings is with the POs, not the payer. Our programs at BCBSM place the responsibility on the provider community to establish care management systems and shared decision making approaches rather than to insert the health plan in these processes. Since PGIP catalyzes all payer system development, not payer-specific system development, and because different POs have different approaches to promoting self 5

management and implementing care management efforts, BCBSM leaves decisions about which tools to incorporate into PO processes up to the POs themselves. Another reason PGIP does not promote particular tool sets is because any pronouncement on our part becomes a tacit endorsement, which some POs may take to mean as an expectation that they should use that particular tool set. This is particularly a concern when the vendor is also a PGIP physician organization. Does PGIP only impact individuals who are BCBSM/BCN members? BCBSM s Physician Group Incentive Program encourages all payer collaboration, catalyzing all payer system development, rather than payer-specific system development. Through PGIP, BCBSM is helping to improve the quality of care for all Michigan residents. Patients throughout the state, regardless of payer, benefit from the improved care processes developed through the PGIP provider community. Developing systems of care which are used for all patients helps assure that providers don't have to alter care processes based on whether patients have insurance, or which insurance they have. This is an important factor in ensuring that the best practices and care processes are reliably provided to all patients, all of the time. This all-payer approach to practice transformation is good for patients with coverage from BCBSM and BCN and helps further BCBSM s social mission of cultivating a healthier future for all Michigan residents. How is PGIP affecting health care costs? PGIP is helping to reduce health care benefit costs. This is commonly known as Bending the Curve, a strategy being used by BCBSM to focus on reducing the growth of health care spending, while also improving quality. It is our belief that by working collaboratively with Michigan s physician and hospital community, we can address the process issues that currently prevent patients from consistently getting the best quality care at the lowest cost. Through PGIP, BCBSM is able to better contain rising health care costs while improving overall quality delivered to members and all other Michigan residents. What awards has BCBSM received in recognition of the Physician Group Incentive Program? BCBSM has received numerous awards for PGIP since its inception in 2005, including multiple Best of Blue Clinical Distinction Awards from the Blue Cross Blue Shield Association (BCBSA) for best practices that focus on reducing medical costs while improving quality, affordability and patient safety. Best of Blue Clinical Distinction Awards are bestowed by BCBSA through the annual BlueWorks Awards program, which ultimately recognizes the single Blue Cross and/or Blue Shield company that best demonstrates taking a leadership role in transforming the quality, affordability, and delivery of care. BlueWorks entries are reviewed by the Harvard Medical School Department of Health Care Policy and independent judges from key medical societies for their innovation, scope, approach and impact on healthcare delivery in Blue companies' local markets. By promoting evidence-based solutions to relevant challenges, the BlueWorks Awards are designed to benefit the entire Blue System and the overall health care system. BCBSM has received Best of Blue awards for PGIP, the Patient-Centered Medical Home (PCMH), and various hospital-based Collaborative Quality Initiatives (CQIs) part of BCBSM s Value Partnerships program. In 2011, BCBSM received three Best of Blue Awards: two were awarded for CQIs (the Michigan Surgical Quality Collaborative (MSQC) and the Michigan Bariatric Surgery Collaborative (MBSC)), and one was awarded for a particular PGIP initiative the Michigan Oncology Quality Consortium (MOQC). Additionally, BCBSA, in collaboration with the Harvard Medical School Department of Health Care Policy, also awarded its most prestigious award the BlueWorks Award to BCBSM in 2011. The prestigious BlueWorks Award is given annually by the Blue Cross Blue Shield Association to the top program chosen from the Best of Blue Clinical Distinction Award winners. 6

In 2011, BCBSM was recognized with an unprecedented two BlueWorks Awards for its efforts to improve the quality of surgical care in the state of Michigan through the MSQC and MBSC. Of the 48 entries submitted by Blue Cross and Blue Shield companies nationwide, BCBSM s MSQC and MBSC programs were named the best of the best. 2011 marks the second consecutive year that BCBSM has won this highly regarded award; in 2010, BCBSM was recognized with this award for the development and launch of the Patient-Centered Medical Home. PGIP Participation How do I participate in PGIP? Physicians, both primary care and specialists, participate in PGIP through a PGIP Physician Organization. There are currently 40 POs in PGIP and they are located across the state. The list of POs is available on the PGIP website at www.bcbsm.com/pdf/pgip_po_list.pdf. Additionally, your BCBSM Provider Consultant is familiar with PGIP POs in your area. You may contact them for information. Physicians are limited to participation in one physician organization for the program. That is, while physicians can be affiliated with more than one physician organization, they can only be associated with one for purposes of PGIP. While specialists may only participate in one PO for PGIP purposes, specialist practices may partner with more than one Organized System of Care (OSC). Physicians must be actively participating in the BCBSM PPO/TRUST or the Traditional lines of business, be in good standing with the network, and be a Medical Doctor (MD), Doctor of Osteopathy (DO), Doctor of Chiropractic (DC), or Doctor of Podiatric Medicine (DPM) in order to be eligible to participate in PGIP. This includes all physician specialties, except anesthesiology (some anesthesiologists will be eligible based on the services provided and billed.) Prior to program year 2011, PGIP was restricted to MDs or DOs whose profiling or primary specialties were on a list of PGIP Defined Specialties. Effective with program year 2011, the roster of available PGIP initiatives was robust enough to support bringing in all specialties; however, mid-level providers such as nurses, physician assistants, therapists, etc. are not eligible to participate in PGIP. Psychologists will be eligible to join PGIP in early 2012. Why doesn t BCBSM work directly with physicians like other incentive programs? To create highly functioning systems of care that reliably produce high quality, efficient care, physicians need to work with Physician Organizations that have sufficient structure and technical expertise to support the development of shared information systems and shared processes of care. Exhorting individual physicians to improve the quality and efficiency of their practice is unlikely to succeed. Individual physicians are currently challenged to find enough time in the day to do all that needs to be done in caring for patients; they rarely have the time and resources to, on their own, engage in practice transformation activities. Physician Organizations can leverage economies of scale and establish the infrastructure and processes to assist individual physicians and physician practices in managing costs while improving care delivery for patient populations, so that the burden of practice transformation does not fall on physicians individually. How is a physician organization selected to be in PGIP? POs must apply to participate in PGIP. The 2012 application period is July 1 to August 31, 2012. Please email providerpartnerships@bcbsm.com to receive an application packet. The major events in accepting a PO into PGIP are provided below: June 2012 Announcements published in The Record and Physician Update inviting POs to apply. July to August 2012 Inquiries/Application materials accepted through Aug. 31, 2012. September 2012 Application materials reviewed by PGIP. Field Operations staff conduct initial site visit. October 2012 List of new POs finalized; accepted POs formally invited to join PGIP. NOTE: The PGIP Agreement for a new PO is not effective until the January 1 st of the following year. New POs 7

November 2012 December 2012 January 2013 February 2013 April 2013 July 2013 are not eligible to receive payments until their PGIP Agreement is in force. New POs receive Self-Reported Data Tool for completion; Field Operations staff conducts return visit(s) and orient PO to PGIP. New POs are formally invited to attend first PGIP quarterly meeting and select their initiatives for 2013 program year (01/01/2013 12/31/2013). New PO s PGIP Agreement begins. New PO s providers are included in the PGIP physician list. PGIP data distribution (monthly claims feeds, datasets, etc.) begins New POs eligible to receive first PGIP reward payment. NOTE: BCBSM reserves the right to determine when the PO will be eligible to begin receiving incentive payments. The PGIP Application Overview document provides more details about the PGIP PO application process and can be accessed at http://www.bcbsm.com/provider/value_partnerships/pgip/join-po-apply.shtml. How do I join a PO for PGIP? Each PO has its own criteria for working with physicians and having them join their organization. For instance, some POs may require physicians to sign with multiple health plans to be part of the PO. Furthermore, POs may have additional requirements for membership that go above and beyond what BCBSM requires. You would need to contact the PO directly to discuss their criteria. You can contact your Provider Consultant for a list of PGIP POs in your area. However, there are some general requirements that physicians must meet in order to join a PGIP PO. Physicians must: Participate with BCBSM s TRUST PPO or Traditional lines of business and be in good standing with the network/company Choose to voluntarily participate with only one physician organization for the purposes of the incentive program Choose to voluntarily participate with only one practice unit that is in turn affiliated with only one physician organization for the purposes of the incentive program Be committed to working on improving health care and outcomes for your attributed patients Agree to implement process changes using an all-payer approach (i.e. the care provided to the patients is the same despite the payer) Is there a cost associated with joining a PO? If so, what does this money go toward? It is common practice for a PO to charge a membership fee. POs do so when they have staff members who provide substantial services. For example, some POs provide their physicians access to discounted malpractice insurance, group negotiated rates with HMOs, technical support for patient and provider portals, e-rx implementation, and other technical infrastructure support. Additionally, there are costs associated with joining a physician organization. These costs relate to the organization s ability to adequately support physicians practice needs in a changing environment, as well as the need to modernize. Charging annual fees enables POs to not only support their physicians needs, but also remain competitive from a business perspective. A physician may choose to remain entirely independent and not join a group, but over time, this will marginalize the physician s practice, as it will be less likely to be included in a health plan network and less likely to be eligible for reimbursement rate increases. Changes in the environment are substantial and business as usual (or as previously carried out) is no longer an option. In the current environment, the focus is not on getting higher fees without contributing, but is instead on pooling resources to improve systems of care among communities of caregivers in service to communities. 8

Is there a PGIP physician organization in the Upper Peninsula (UP)? Yes, the Upper Peninsula Health Plan (UPHP) is currently the PGIP PO in the UP. Contact your BCBSM Provider Consultant for contact information regarding UPHP. PGIP Funding and Reward Pool How do I receive incentive rewards? Twice a year, BCBSM distributes incentive dollars from the PGIP Reward Pool to the POs. The PO s payment is dependent upon performance improvement and accomplishing goals that the PO has agreed to work on with their PGIP physicians for any given year. Each PO determines how they will distribute incentive dollars to their member PGIP physicians. Primary care physicians participating in PGIP can also work to become a BCBSM designated patient-centered medical home provider, which makes them eligible to receive additional reimbursement for select evaluation and management (E & M) services. See below for additional information regarding codes for PCMH designation. Additionally, physicians participating in PGIP are eligible to bill for T-codes, which are specific procedure codes delivered by ancillary providers for care management services incident to a physician s E & M services. T Code services apply to the individual care management and/or self management training of a patient with any chronic condition of sufficient complexity that warrants additional management beyond the guidance typically provided in a standard E & M visit. The ancillary provider carries out the service and the physician or physician group bills for the service. This model rewards PGIP physician groups and their community of caregivers for their investment in building the infrastructure to support efficient chronic disease management. As of April 1, 2012, physicians participating in the MiPCT Demonstration/Provider Delivered Care Management Program will be eligible to bill G-codes for care management services, rather than T-codes. However, PGIP practices that are not participating in MiPCT may continue to bill T-codes. The following ancillary provider types are acceptable disciplines to provide T Code Services: Licensed nurses (registered nurses and licensed practical nurses) Masters of social work Certified diabetes educators Registered dietitians or masters of science trained nutritionists Clinical pharmacists Respiratory therapists Certified asthma educators Certified health educator specialists (bachelor s degree or higher in health education) Licensed professional counselors and licensed mental health counselors Certified nurse practitioners or physician assistants (services by a CNP or PA may not include clinical decision making such as ordering tests, prescribing medications, or making diagnoses) How do PGIP POs use their incentive dollars? It is left to the discretion of each PO how to best utilize the incentive reward dollars that are received through PGIP; each PO determines how they will distribute incentive dollars to their member PGIP physicians. POs can use their incentive dollars to support the building of infrastructure and/or infrastructure support (such as buying particular clinical tools or information systems). POs can also use their incentive dollars to meet clinical information needs among their providers, among many other uses. These incentive dollars are intended to be used by each PO to further PGIP s goals of improving health care quality and transforming health care value. 9

Should physicians both specialists and PCPs view PGIP as merely a means to receive financial rewards? No, physician opportunities to participate in PGIP are in the areas of clinical integration with other physicians (PCPs and other specialists) and contributing to population level performance improvement on cost and quality measures. For physicians, the main opportunity regarding clinically integrating with other physicians is the development and implementation of structured approaches to referrals and information sharing between PCPs and specialists regarding patients that they share in common. The specifics of the granular capabilities inherent in a robust specialist referral system are included in the relevant domain of the PCMH Interpretive Guidelines. Regarding population level performance, PCP attributed populations for PGIP Physician Organizations are measured on overall cost and cost increase trends. When specialists provide care to members in such PCP attributed populations with low absolute cost and/or costs which rise at a notably slower rate than elsewhere, BCBSM rewards those specialists in future office visit payments by increasing fees. There is no pre-determined opportunity to earn rewards just by joining a PGIP Physician Organization. On my voucher it says Physician Organization Component. What does this mean? This represents the PGIP Physician Organization Component, which is currently 4.7% (as of July 1, 2012). The PGIP PO Component is used to fund the Physician Group Incentive Program. In 2004, the BCBSM Board of Directors approved the Physician Group Incentive Program with the understanding that the Board would not support an overall fee increase for physicians unless a PGIP Reward Pool and accompanying Physician Organization Component was created to support an incentive program to engage physicians, via Physicians Organizations, in healthcare quality and value transformation. To fund the PGIP Reward Pool, BCBSM commits an amount of money equivalent to a set proportion of total professional payment each year through the PGIP Physician Organization Component (formerly referred to as the Contribution to Reward Pool ).The professional fee schedule is the administrative mechanism used by BCBSM to determine the PGIP PO Component amount, and ultimately the annual PGIP Reward Pool amount. Most professional fees contain two Components a Physician Component and a PGIP Physician Organization Component. The Physician Component honors BCBSM s Approved Amount reimbursement commitment to individual physicians. The PGIP PO Component is a percentage of the Allowed Amount for most professional services. The PGIP PO Component percentage increases are approved annually by the BCBSM Chief Medical Officer, and have increased by approximately 0.5% each year. See below for an example of a standard reimbursement voucher with the PO Component included. A sample calculation for a specific procedure code (86580) is also included below the voucher. Example: Standard Reimbursement (w/ PO Component) - Calculation for Procedure Code 86580)* 10

Calculation Charged Amount $17.00 Allowed Amount $10.72 Copay $0.00 Benefit Cost to ASC Group Customer (Allowed Amount minus Copay) $10.72 PO Component (4.2% of Allowed Amount) $0.45 Approved to Pay Provider $10.27 *This voucher and calculation will be replaced with an updated version (reflecting the increased PGIP PO Component of 4.7%) when available. Are the PGIP incentives for primary care physicians being funded by drawing money from specialists? Alternatively, are PGIP specialty incentives drawing from primary care physician incentives? There are not two separate PGIP reward pools for primary care and specialists. Rather, there is one PGIP Reward Pool which is intended to fund practice level transformation for both PCPs and specialists. This combined reward pool provides reward opportunities for PCPs and specialists alike. I am a physician in the Upper Peninsula and previously did not have a PGIP Physician Organization Component as part of my fee. When did that change? Effective 10/1/09, the PGIP Physician Organization Component became a part of your fee; this was reflected on your vouchers. I am a physician who bills the BCBSM Traditional line of business only and previously did not have a PGIP Physician Organization Component as part of my fee. When did that change? Effective 10/1/09, the PGIP Physician Organization Component became a part of your fee; this was reflected on your vouchers. Is the PGIP PO Component applied to professional claims for BlueCard members? The PGIP PO Component is applied to BlueCard Host claims (claims received by BCBSM from Michigan providers for members of another, out-of-state Blue Cross Blue Shield plan). However, the PGIP PO Component is not applied to BlueCard Home claims (claims where a BCBSM member sees a Blues out-of-state Control Plan provider); these claims are excluded from the PGIP PO Component and fee uplifts. Are there any other BCBSM groups/products that are excluded from the application of the PGIP PO Component? The Federal Employee Program (FEP) is excluded from the PGIP PO Component. Additionally, Medicare Advantage and Medicare Supplemental claims are also excluded. Why bother with the Reward Pool? Why don t you just pay the doctors more? Physicians often contend that we should just give them the 4.7% in their fee directly and they ll improve themselves; however, BCBSM s experience shows that that model has not worked well. Further, the fact is that if we did not have a Reward Pool, those monies would not have been approved by the Board to go into physician fees. 11

PGIP serves as a mechanism for incremental reimbursement reform, redirecting a meaningful proportion of professional payment away from volume-based, fee-for-service (e.g., pay for production), and toward population level performance and reinvigoration of health care delivery, and ultimately towards a pay for quality system. Where is the documentation of the funds distributed in the PGIP Program? Is there a ranking of the POs? BCBSM does not have a ranking of PGIP POs that is made publicly available. All funds from the PGIP incentive pool are distributed to the POs annually; no monies are retained by BCBSM for administrative costs. Payments are made based on performance and utilization measures, as well as participation. This process is audited on a regular basis. However, details are not published externally. Have fees for (name of service) decreased or increased in recent years? Various factors are taken into consideration in determining whether fees should increase or decrease each year. For example, changes in Resource-Based Relative Value Scale (RBRVS) values can impact fees. Generally, procedure code maximum fees will increase or decrease based on the new relative value units and BCBSM s conversion factor. Each year, BCBSM conducts a comprehensive analysis of professional provider performance and current economic indicators to calculate practitioner fees, with consideration for corporate and customer cost concerns. BCBSM remains committed to reviewing professional provider performance to determine the need for increases or decreases in our maximum payment amounts. Does the PGIP PO Component only fund the PGIP Program, or are other programs funded with it as well? BCBSM is committed to putting a set amount into the PGIP Reward Pool each year to fund the PGIP Program exclusively. This amount is based on a set percent of professional payment, and each year, all the funds in the reward pool are spent. These funds are spent only on the PGIP Program, and no PGIP reward pool funds are retained by BCSBM. Because each BCBSM customer (employers who purchase insurance) is responsible for their proportionate share of professional payment, and because the only mechanism for assuring this is so is through claims payment and reporting for each BCBSM member, the accounting for the Physician Organization Component of payment (the incentive pool) is done through the claims payment system. So, for example, with a service with a payable fee of $100, BCBSM adds $4.70 to that fee creating a total of $104.70 and then subtracts $4.70 (the same amount) as the PGIP Physician Organization component which is added to the reward pool. This is accounted for when tallying the costs for members for each group purchaser of BCBSM insurance coverage. PGIP Organization and Oversight How does a PO decide what initiatives to work on for the year? POs decide what to focus on based on an assessment of their opportunities for the greatest improvement. There are five categories of Initiatives that a PO can work on for the year: Condition-focused Initiatives Cardiac care (expanded in 2012 to include Phase III a diagnostic therapeutic cascade component) Chronic kidney disease Encouraging evidence-based utilization of hysterectomy Encouraging evidence-based utilization of labor induction Environmental cancer Michigan Oncology Quality Consortium (MOQC)/Quality Oncology Practice Initiative (QOPI) Michigan Oncology Clinical Treatment Pathways Program 12

Michigan Urological Surgery Improvement Collaborative (MUSIC, new for 2012) Service-focused Initiatives Advance Care Planning (new for 2012) Emergency department utilization Increasing the use of generic drugs Michigan Anticoagulation Quality Improvement Initiative (MAQI 2 ) Radiology management Core Clinical Process-focused Initiatives Coordination of care* Extended access* Individual care management* Linkage to community services* Patient provider partnership* Performance reporting* Preventive services* Self-management support* Specialist referral process* Test tracking and follow-up* Evidence Based Care Tracking Lean for Clinical Redesign CQI Michigan Transitions of Care (M-TC 2 ) Organized Systems of Care Integrated Patient Registry Organized Systems of Care Integrated Performance Measurement Organized Systems of Care Processes of Care (new for 2012) Clinical Information Technology-focused Initiatives Accelerating the adoption and use of electronic prescribing Patient web portal* Patient registry* The initiative plan and initiative fact sheet for each initiative are available on the PGIP PO Collaboration Site, on each specific initiative site. The PO Collaboration Site can be accessed through the BCBSM secured provider portal on www.bcbsm.com. Once in the site, click on the Initiatives tab; then select the initiative. The documents will be found under BCBSM Documentation. *These initiatives relate to the 12 Domains of Function of the Patient-Centered Medical Home. What is a Practice Unit? A Practice Unit consists of one or more physician(s) within a PGIP PO who share clinical responsibility for a group of patients and are formally organized to provide medical care, consultation, and diagnosis/treatment through joint use of clinical information and care processes. In the vast majority of practice units this collaboration occurs in the context of shared facilities/equipment/personnel. A Practice Unit is the entity that is eligible to receive Patient-Centered Medical Home designation, and is the primary point of contact between the PGIP provider community and patient/bcbsm members. 13

How does the PO work with its physicians? The expectation of each PO is to communicate the PGIP objectives to their physicians. A PO selects initiatives on a yearly basis and establishes goals and objectives, developing their own plans for working with their PGIP physicians. For any questions about how your physician organization works with physicians and practice units or the various PGIP units, please contact your PO. What kind of reporting or information is provided back to PGIP physicians regarding their patients? PGIP physician organizations and physicians receive both dashboards and datasets, which are designed to provide data and metrics that do the following: Identify improvement opportunities Assist in diagnosing the process problems Track progress of implementation effort Measure improvement success POs receive dashboard files semi-annually. Dashboards provide PO-level claims data organized by specific initiative metrics; dashboards are distributed to all POs regardless of participation in a particular initiative. They also include data on all POs regardless of participation in specific initiatives. Dashboards include: Physician Organization demographics and attribution volumes Risk adjustment comparisons (where applicable) Tables and figures to show POs outcomes for initiative metrics PGIP-overall and benchmark comparison Providing metrics at the PO-level allows for PO to PO comparison. Additionally, POs receive their own Microsoft Access Datasets on a quarterly basis. Datasets include practice-level and physician-level information, which allows for practice unit to practice unit and/or physician to physician comparisons within a PO. Data tables are included for member (patient) level activity information. The effective use of data (including data provided through Dashboards and Datasets) on the part of PGIP POs is essential for PGIP success. How is physician efficiency of care measured among PGIP physicians? In the fall of 2011, BCBSM introduced the CCGroup Marketbasket System, an efficiency measurement system, to PGIP POs. The CCGroup Marketbasket System, also known as CAVE, is based on longitudinal episodes of care, which allow for the assessment of global patterns of treatment for specific conditions. CAVE compares the efficiency of physicians or groups of physicians to a peer group of physicians within the same specialty. In order to create a more valid comparison among specialists or groups of specialists providing care via an organized physician practice unit, CAVE calculates efficiency based on the costs and utilization for the most common medical conditions treated by each specialty type. The CAVE methodology reduces the impact of patient case mix, cost outliers, and other non physician-related variation in practice patterns on efficiency score comparisons. To date, BCBSM has produced CAVE reports at the PO level for four specialty types cardiology, gastroenterology, orthopedic surgery and emergency medicine. BCBSM will produce practice unit level CAVE reports for the four specialty types in 2012. BCBSM also plans to release additional CAVE specialty reports in 2012. One of the foundational principles of PGIP is that communities of caregivers have shared responsibility for managing a patient population. CAVE will enable PGIP POs and specialist practice units to collaboratively manage populations by understanding variations in specialty-specific practice patterns. For this reason, and because individual physician level CAVE reports generally have insufficient sample sizes to produce valid and comparable results, BCBSM does not plan to produce CAVE reports at the individual physician level. 14

BCBSM is also implementing CAVE to support population-based performance assessment and related payment models for specialists, such as specialist fee uplifts. BCBSM is also exploring the use of Prometheus, which provides information on potentially avoidable complications. This data could be used to assess the performance of providers such as hospital systems - but will not be used at the individual physician level. Patient-Centered Medical Home (PCMH) Overview What is the Patient-Centered Medical Home and what does it mean? The Patient-Centered Medical Home (PCMH) model is an approach developed to yield both better health care and lower costs. PCMH provides centralized, comprehensive, coordinated primary care and cultivates partnerships between patients, their personal physicians, the care giving team, and the patient's family. Where did this concept come from and who endorses this concept? The American Academy of Pediatrics introduced the concept of a medical home in 1967. Initially it referred to merely having a single source of information about a patient, but has over time grown to mean a partnership existing to provide comprehensive, coordinated medical care. The PCMH concept is supported by such diverse agencies as the American Academy of Family Practice, American Academy of Pediatrics, American College of Physicians, American Osteopathic Association, the World Health Organization, the Centers for Medicare and Medicaid Services (CMS), the Utilization Review Accreditation Commission (URAC), and the National Committee for Quality Assurance (NCQA), among others. How do I find a PCMH Designated Physician? To find a PCMH designated physician, visit www.bcbsm.com. Click on Find Doctor on the top right section of the page, and then click on Designated Physicians List. There, you will find a list of PCMH-designated physicians listed by city. What are the PCMH Interpretive Guidelines and how are they used by BCBSM? The PCMH Interpretive Guidelines is a 40+ page document that provides details approximately 130 capabilities in the 12 PCMH domains. The field team uses this document in their site visits, during which they review and validate the POs twice per year selfreported PCMH implementation activity; this activity is reported at the practice unit level. The POs are held accountable for accurately reporting all their practices data; those who have systematic reporting errors have an accuracy factor applied to their PCMH Designation scores, which reduces scores in the domains with inaccurate reporting. The PCMH Interpretive Guidelines are separate from the PGIP agreements between the POs and BCBSM. PCMH Participation and Designation What is the BCBSM PCMH Designation Program? The Blue Cross Blue Shield of Michigan Patient-Centered Medical Home Designation Program, which was launched in July 2009, is a component of BCBSM s Physician Group Incentive Program. BCBSM s PCMH Designation program recognizes and supports those primary care physician offices that have made significant progress in implementing and using patient-centered clinical and administrative processes, resulting in the delivery of more coordinated, efficient, and effective health care. In addition, designated providers are those who have performed favorably on measures of quality, use and efficiency based on claims data. Designated primary care physicians receive a higher level of reimbursement for evaluation and management (E & M) services. All designees are reevaluated annually, along with all PGIP nominated practice units. 15

The objectives of BCBSM s PCMH Designation Program are to: Strengthen the role of primary care physicians in the delivery and coordination of care; assist them in achieving levels of patient engagement and care coordination that are consistent with the patient-centered medical home philosophy Demonstrate BCBSM s continued commitment to the improvement of core health care processes Fulfill BCBSM s responsibility, shared with health care practitioners and members, to advocate for the highest quality health care services, enabling our members to achieve and maintain optimal health Is BCBSM s PCMH program the largest in the nation? Yes, BCBSM currently has the largest PCMH program in the nation. In 2012, 994 practices representing more than 3,000 primary care physicians were PCMH designated. As of the 2012 designation cycle, more than 1 million BCBSM members are attributed to BCBSM s PCMH designated practices (please note: the number of subscribers that BCBSM claims is based on a conservative attribution model which does not attribute over 30 percent of members to PCP practices). BCBSM s PCMH program is not only larger than others in the nation, but it is also quite different from other health plans PCMH programs. Many other health plans hire care managers to support their practices, but do not support practices in establishing their own care management programs. Additionally, many other health plans deem practices to be PCMH practices if they merely sign up to participate and agree to take a risk. However, BCBSM helps physicians organizations build PCMH practices, and BCBSM calls practices PCMH-designated only when have they have achieved a critical mass of verifiable PCMH capabilities. These differences make BCBSM s PCMH program unique from other health plans PCMH programs throughout the nation. Does BCBSM s PCMH Program address and track the adoption and use of Electronic Medical Records (EMRs)? Our PCMH program supports IT infrastructure development, but not EMRs specifically. Thus, we do not have a fully comprehensive understanding of the number of EMRs in practices. We do, however, track the use of electronic prescribing and registry tools. Through the PCMH program, BCBSM encourages the use of a variety of technology tools including EMRs, disease registries, electronic prescribing, etc. Additionally, BCBSM is promoting/supporting health information technology development through our OSC initiatives. Health information technology is integral to supporting improvements in health care safety, quality, efficiency, and access and is the foundation of an effective system of care. How do I get my practice unit designated? Consistent with PGIP s partnership philosophy, the PGIP PCMH Designation selection process is highly collaborative and begins when the PGIP PO nominates Practice Units that it recognizes as having strong performance metrics and significant application of Patient- Centered Medical Home concepts. Practice units are eligible to be nominated for PCMH Designation by their PO if they meet the following criteria: Physicians are PGIP members in good standing Practice is functioning as a primary care practice Practice has at least one physician who is functioning as a PCP Practice has a minimum of 30 attributed BCBSM members Sufficiently robust claims data is available for at least 3 of the 7 metrics analyzed by BCBSM PCMH validation visits are conducted at random to ensure that each PO s assessment of its practice unit s PCMH functionality is aligned with the collaboratively developed definitions (see the PGIP PCMH Interpretive Guidelines document for additional information). For detailed information about nomination and scoring processes, please contact your PO. They have been provided with the BCBSM PGIP Patient Centered Medical Home Designation Program Objectives and Selection Process (Summer 2011) document. 16

What happens if the practice unit I am in gets designated as a BCBSM PCMH? PGIP-enrolled primary care physicians who are members of a designated PCMH Practice Unit will receive a higher level of reimbursement for office-based evaluation and management codes from July 1 of the designation year through June 31 of the following year. PCMH review and selection will occur annually. You must have been a member of that designated Practice Unit during the review period to be eligible for the higher reimbursement. POs and Practice Units are expected to continue to implement additional PCMH initiatives and capabilities. Why doesn t BCBSM recognize PCMH designation by other parties, such as the National Committee for Quality Assurance (NCQA) or the Utilization Review Accreditation Committee (URAC)? The standards and requirements used by these parties for designation differ from those employed by BCBSM. For instance, these other designation programs do not have a quality/use/efficiency component, which is 50 percent of BCBSM s PCMH designation score. Additionally, other designating parties do not conduct onsite validation visits (which BCBSM does annually) or emphasize the improvement of care processes to the extent that BCBSM does. BCBSM s PCMH Program is just one component of our overall PGIP strategy for practice transformation, whereas the NCQA and URAC designation programs are stand-alone programs. BCBSM s PCMH Program is also constantly evolving; the interpretive guidelines are updated each year in order to catalyze practice participation and transformation in the entire PGIP Program. Are all physicians eligible for PCMH designation? It should be noted that individual physicians are not designated. Only practice units are designated; individual physicians may be eligible for increased E&M fee reimbursement as a member of a PCMH Designated Practice. Only physicians with a primary care focus who are functioning as a PCP as determined by their PO, who are in good standing with the BCBSM network, and who were in the practice unit at the time it was evaluated for PCMH Designation are eligible for the increased E & M fees. Can specialists participate in PCMH? Specialists are able to participate in each of the 12 Patient Centered Medical Home Initiatives, provided their affiliated POs foster opportunities to do so. POs and their specialists are rewarded for developing PCMH capabilities at the practice unit (i.e. physician office) level and PGIP rewards go to the PO to recognize these improvements. However, a specialist practice cannot be designated as a patient-centered medical home. Why can t a specialist practice be considered a patient-centered medical home? A specialist practice cannot be considered a Patient-Centered Medical Home because the role of being a central hub for all patient information and care is optimally handled by the primary care provider a belief that is consistent with the philosophy of the Joint Principles of a Patient-Centered Medical Home, developed by the American Academy of Family Physicians (AAFP), the American Academy of Pediatrics (AAP), the American College of Physicians (ACP), and the American Osteopathic Association (AOA) in 2007. These Joint Principles form the basis of our program. However, specialists are welcome to participate in Patient-Centered Medical Home initiatives to develop PCMH capabilities for their office. What happens if I share a practice unit with specialists? While your practice unit may receive PCMH Designation, the only physicians eligible to receive additional E & M reimbursement are the primary care physicians. Primary Care Physicians are defined as physicians with a primary care focus who are determined by their PO to be functioning as a PCP. Example #1: There are 3 PCPs (Dr.s V, W, & X) and 2 Specialist physicians (Dr.s Y & Z) in one Practice Unit B. All physicians in Practice Unit B are in PGIP. 17

Practice Unit B is a PCMH Designated practice. PCPs V, W, & X will receive the higher level of reimbursement for E & M services. Specialists Y & Z will not receive the higher level of reimbursement. **Specialists are not eligible for the higher level of reimbursement even if they are in PGIP and are members of a PCMH Designated practice** Example #2: There are 3 PCPs (Dr s X, Y, & Z) in Practice Unit A. Drs. X & Y are in PGIP; Dr. Z is not in PGIP. Practice Unit A is a PCMH Designated practice. Drs. X & Y will receive the higher level of reimbursement; Dr. Z will not receive the higher level of reimbursement. **Physicians and practice units must be enrolled in PGIP to be eligible for the PCMH Designation Program**. Only PGIPenrolled primary care physicians within a PCMH Designated practice unit are eligible to receive the higher level of reimbursement for E & M services. In 2010 and 2011, how many specialist practices were participating in PGIP and PCMH initiatives? In 2010, there were 3,178 practice units in PGIP 929 specialist practice units in PGIP (29% of all practice units in PGIP) 497 specialist practice units not participating in PCMH (53% of all specialist PUs) 432 specialist practice units participating in PCMH (47% of all specialist PUs) In 2011, there were 4,192 practice units in PGIP 1,685 specialist practice units in PGIP (40% of all practice units in PGIP) 852 specialist practice units not participating in PCMH (51% of all specialist PUs) 833 specialist practice units participating in PCMH (49% of all specialist PUs) Despite adding 756 additional specialist practice units into PGIP in 2011 by the addition of new specialty types (including Gastroenterologists, Neurologists, Orthopedic Surgeons, Radiation Oncologists, etc.), BCBSM was able to attract an even larger percent of specialist practice units into PCMH from 2010 up to 49% of all specialists in PGIP. This translates into 401 additional specialist practice units over a year period that participated in PGIP s PCMH program working to build PCMH capabilities in their practices. In which PCMH initiatives are specialists participating? Specialists are participating in all 12 PCMH initiatives at varying levels. In 2011, the five PCMH initiatives with the highest number of specialists practice units participating were as follows: Extended Access (418 specialist practice units); Linkage to Community Services (393 specialist practice units); Patient Web Portal (379 specialist practice units); Test Tracking and Follow-up (368 specialist practice units); and Individual Care Management (366 specialist practice units). Please refer to the following graph for an overview of specialist practice units participating in all PCMH initiatives in 2010 and 2011. 18

PCMH Reimbursement Procedures What are Evaluation & Management Procedure Codes? Evaluation and Management (E&M) Codes are Current Procedural Terminology (CPT) procedure codes (office visits, hospital visits, and consultations). CPT values for E&M codes are 99201 99499. What E & M codes will receive higher reimbursement? For PCMH designated practices, the following E&M procedural code ranges receive the E&M Uplift: Office visits (99201 99215) Preventive (99381 99397) What places of service are eligible for the higher level of reimbursement? The following Place of Service (POS) codes will receive the increased reimbursement: POS 2 = Hospital, Outpatient (HIPAA value 22) POS 3 = Doctor s office (HIPAA value 11) 19

How much will the E & M increased reimbursement be? That will be determined on a yearly basis. For 2010 it was 10%. In 2011, an additional level was added to recognize those practice units who showed exceptional cost and use containment while maintaining or improving quality of care. These practice units received a 20% fee increase for E & M services. What are the applicable product lines that have the elevated E & M payment applied? PPO products (e.g. Community Blue, MIChild, Flexible Blue, Blue Preferred Plus (BPP)) BlueCard Host (out-of-state control plan member sees MI physician) Traditional Blue Choice PPO (formerly Point of Service) Federal Employee Program What product lines are excluded from additional E & M reimbursement? Pay Subscriber Blue Card Home Medicare Supplemental COB, except where BCBSM is primary Vision and Hearing (stand-alones) Ambulance Services Anesthesia Services Durable Medical Equipment Prosthetics and Orthotics Services billed by physician extenders (i.e. Certified Nurse Practioners, Independent Physical Therapists, and Physician Assistants) Will I have to follow any special billing requirements? No. Follow your normal billing procedures. No special modifiers are needed. Is there any member cost-sharing? Yes, if applicable. This won t affect flat co-pays (e.g., office visit copay = $10), but any co-insurance or deductibles will still be applicable at the standard amount or percentage of the higher E&M fee. Is the lesser of charges or standard reimbursement fee rule still applicable with the additional E & M reimbursement? Yes, claims where the providers charge is less than or equal to the BCBSM Allowed Amount are excluded from the fee uplifts. What will my voucher look like if I am receiving the E & M uplift? See below for an example of a PCMH Uplift reimbursement voucher. A sample calculation for a specific procedure code (99213) is also included below the voucher. 20