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Physician-focused option shows savings

CMS’ first pay-for-performance initiative for physicians within the Medicare program is turning the classic DM model of call center–based care on its head.

The results of the first year of CMS’ Physician Group Practice (PGP) project, which ran from April 2005 to March 2006, shows two groups earned performance payments for quality and cost efficiency of $7.3 million as part of their share of the $9.5 million savings in the Medicare program. The payments work this way: Practices whose Medicare spending growth rate for assigned beneficiaries is more than 2 percentage points lower than their comparison population earn performance payments of up to 80% of the savings they generate with the remaining 20% going to The Medicare Trust Funds.

Two groups, Forsyth Medical Group in Winston-Salem, NC, and St. John’s Health System in Springfield, MO, met all 10 diabetes clinical quality measures in the PGP project. All 10 of the physician groups (which represent 5,000 physicians and 224,000 Medicare beneficiaries) achieved benchmark or target performance levels on at least seven of the measures. Reviewing the first-year findings, John Pilotte, senior research analyst at CMS, said the areas of concern are foot exams, blood pressure, and flu vaccinations. “I think it’s important to not only look at the cost side, but also the quality side, especially in the ambulatory care environment,” said Pilotte, who spoke at DMAA: The Care Continuum Alliance’s (formerly the Disease Management Association of America) Disease Management Leadership Forum in September. The idea behind the three-year project is to reward physicians for “improving the quality and cost efficiency of healthcare services delivered to a Medicare fee-for-service population,” according to CMS. CMS hopes the demonstration “encourages physician groups to proactively coordinate beneficiaries’ total healthcare needs, provides incentives to physicians to provide services efficiently and effectively, rewards improvements and delivery of high quality care, and creates a framework to collaborate with providers to the advantage of Medicare beneficiaries.”

Marshfield (WI) Clinic and the University of Michigan Faculty Group in Ann Arbor, MI, earned performance savings of $7.3 million. Other groups achieved lower Medicare spending growth rates than their local markets during the first year, but the growth rates were not low enough to share in the savings.

Marshfield Clinic

Marshfield Clinic, a 41-location system that provides patient care, research, and education in northern, central, and western Wisconsin, has 42,000 people assigned by CMS. Although the physician group had already planned the programs that they expanded in the PGP project, Theodore A. Praxel, MD, MMM, FACP, Marshfield Clinic’s medical director of quality improvement and care management, says it is too early to have specific ROI for the interventions used. Participation in the demonstration accelerated the process, according to Praxel. “Part of the reason Marshfield Clinic was interested in participating was that the tenets of the project were consistent with the tenets of the clinic’s mission to provide accessible, high-quality healthcare to our patients, and we felt we could learn from participating in this project,” says Praxel. The following are goals of Marshfield’s care management program:

Enhance the electronic health record (EHR) to implement care management and coordination processes

Expand the anticoagulation care management program across the entire system and develop a heart failure care management program

Promote use of a nurse triage line

Marshfield has used EHRs in some form for 20 years, and Praxel says it hopes to be completely chartless by the end of this year. The electronic records are more than just a collection of notes. They allow a provider to call up multiple applications showing patient diagnosis, recent appointments, allergies, medications, alerts, and prevention services, such as making sure the patient is up to date on tests and immunizations. Praxel says the electronic record is necessary for Marshfield’s success because it helps to ensure the patients are getting the services they need.

Regarding the anticoagulation care management program, Praxel says Marshfield decided to enroll patients in the service even though it’s not being reimbursed by Medicare. Praxel says Marshfield believes the program brings better care through coordinating care, such as educating patients about their medications and drug interactions. The care management nurses act as an extension of the physician practices and relay patient information to the physician. The nurse advice line is successful because of the electronic records and guidelines that allow the nurses to take an active role in a patient’s health, according to Praxel. “All the documentation between the various programs are part of the electronic records . . . so we’re really an extension of that provider’s practice rather than separate entities in the system,” says Marilyn Follen, RN, MSN, Marshfield Clinic’s administrator of quality improvement and care management.

If the care managers connect with the patients before doctor office visits, they are able to collaboratively handle comorbid conditions and allow the physician to spend more productive time with the patient.

Praxel gives the example of one diabetic patient who stopped taking medication after reading online that cinnamon helped her condition. During one of the calls, the patient told the care manager, who was able to contact the patient’s physician and help to get the patient back on the medication.

The physician group has received $3.42 million as part of its savings to the Medicare program. Marshfield was one of the two physician groups that received financial bonuses.

If Marshfield remains cost-effective in the project’s remaining two years, CMS will award Marshfield another $1.14 million in 2009. Praxel says the money is going into clinical infrastructure to improve quality of care in the areas of CHF, CAD, hypertension, preventive services, and adult immunizations.

Pharos Innovations

Pharos Innovations, LLC, in Northfield, IL, was involved with two physician groups in the PGP project totaling about 40,000 Medicare patients. Randall E. Williams, MD, FACC, CEO of Pharos, says Park Nicollet Health Services in St. Louis Park, MN, and Billings (MT) Clinic utilized Pharos’ Tel-Assurance system with heart failure patients.

Williams says the choice to focus on heart failure patients was because heart failure is an area in which medical groups could avoid costs and unnecessary hospitalizations.

Heart failure patients are enrolled in daily telephony and Web-based interaction, which requires the patient to log in or call each day to report or track their test results, behavior, and medication compliance.

“Part of the challenge is building a technology that patients will use,” says Williams. “We use whatever communications the patient prefers. Therefore, the system itself is architected by the phone, computer, PDA, whatever the patient is comfortable using.”

Tel-Assurance captures the data, and algorithms identify which patients need interaction with care management nurses, who are based in the patients’ physicians’ practices. The early identification process allows for averted potential trips to ERs and the hospital, according to Williams.

The telephone system, which is utilized by most of the patients in the program, features a human voice with a slower speech pattern geared to the demographic. Williams says even patients with mild dementia are able to use the Tel-Assurance system.

The system also allows for communication between the case management nurse and physician, and an opportunity for troubleshooting. For instance, if the algorithms report a problem, the care management nurse can contact the physician and adjust medication or schedule an appointment.

Williams says PCPs have been receptive because the case manager is in the practice. “The physicians can see these patients as high maintenance and challenging,” says Williams. “Physicians favor this approach because of the fact that they are not getting phone calls in the middle of the night because the troubleshooting caught the problem in the middle of the day.”

Hospitalizations averted

Williams says Park Nicollet Health Services and Billings Clinic have averted one heart failure admission per year per enrollee. He estimates about 70% of the cost for care for heart failure patients is because of hospital charges. “The overwhelming cost is through hospitalization, so if we are able to avoid one admission per patient per year, there is a robust cost savings,” says Williams.

Williams estimates there are 250 patients for one full-time case manager nurse. The technology costs are about $50 per enrolled patient per month. When analyzing the technology and salary costs to the savings on hospitalizations, Williams estimates the Tel-Assurance program enjoys a three-to-one ROI.

Because Tel-Assurance avoids hospitalization, the next question is reimbursement. Providers are not reimbursed for using programs like Tel-Assurance because the services are not rendered at a physician’s office or hospital. Williams says the healthcare system needs to review this reimbursement issue and revise what services should receive reimbursement.

“The biggest challenge to the approach in general is that CMS and other payers have not yet reimbursed the incremental time and effort a program like this requires,” says Williams.

The second year of the demonstration project, which ended earlier this year, dealt with CHF and CAD. Hypertension and cancer are the focus of the third year.

Tale of two projects

The release of the CMS Physician Group Practice (PGP) demonstration project’s first-year findings this summer shows a possibly successful new avenue for DM programs.

Rather than the call center–based model on which DM was founded, the PGP project places doctors squarely in the middle of DM care.

“There certainly is a difference when the providers are engaged in disease management in their own organizations,” says Randall Williams, MD, FACC, CEO of Northfield, IL–based Pharos Innovations, LLC, which took part in the demonstration project. “When a provider endorses a program to patients, they are more likely to participate in the program.”

The release of PGP’s year one performance results comes on the heels of the findings from the first six months of CMS’ Medicare Health Support (MHS) program, which was based on a more traditional DM model. Although the PGP project is being lauded as the model of chronic care management in the Medicare population, the results from the MHS projects have been disappointing.

The congressionally mandated report Evaluation of Phase 1 of Medicare Health Support Pilot Program Under Traditional Fee-for-Service Medicare found that fees spent in the first six months of the MHS program far exceeded the savings produced. Faced with needing to guarantee savings of 5% in their intervention groups when compared to control groups, two vendors have already quit the MHS program.

Thomas Wilson, PhD, DrPH, and Vince Kuraitis, JD, MBA, principal and founder of Better Health Technologies in Boise, ID, wrote a commentary on the latter’s Better Health Technologies blog in which they ran the numbers from the report. They found MHS organizations “will need to produce an average savings of 19.9% of costs of the participants in the intervention group to achieve financial ‘success’ for the project.” Summing up, they wrote, “The bottom line: We believe MHS is in big trouble.”

“The conclusion to draw is not that disease management is a failure. The conclusion is we need to try something different,” says Kuraitis.

If the MHS announcement was tempered, PGP’s first-year findings could have been preceded with the sound of trumpets. Two of the 10 physician groups will share in millions in Medicare program savings.

The physician-focused PGP program is a change in focus for DM, and the medical home concept is one that physicians support. “When you talk medical home, that’s something doctors have cooked up and there is ownership. It’s theirs, and they believe in it,” says Kuraitis.

Kuraitis says older, sicker patients in the Medicare demonstration projects trust their PCPs and rely on them as the stewards of their healthcare. When a DM company is added to the mix, the elderly patients often become confused. Plus, the issues involving an 80-year-old patient are more medical than motivational.

The question is who is going to lead the DM process, the companies or the physicians? “The disease management model and the medical home model may seem very black and white, but there’s also room for lots of shades of gray in there too,” says Kuraitis. “I would anticipate that we are going to see hybrid models perhaps where disease management companies will start to pay physicians part of their fees as an inducement to get the doctors to participate, and we also may see doctors with medical home projects recognizing a need for a health coach, a call center, and remote monitoring, and they will need to buy that from private companies.”

Speaking at DMAA: The Care Continuum Alliance’s 2007 Disease Management Leadership Forum in September, David Wennberg, MD, MPH, president and chief operating officer of Health Dialog Analytic Solutions in Boston, said providers and organizations have their own strengths and weaknesses and are usually complementary.

“There is a debate right now . . . which is, ‘Is this a doctor thing or a care management thing?’ I think that’s the wrong question,” said Wennberg. “It isn’t one or the other, but a combination of both.”

Kuraitis says there is a reimbursement question involving care management led by physicians. “In my mind, if we want doctors to do disease and care management, I think paying them for it is a necessary piece of that—and that they will in turn respond and provide services that we will pay them to do,” he says.

Whether DM’s future will mean greater physician focus is not a question. It’s only a matter of how that’s going to happen, says Kuraitis.

“This is really, in my mind, the central issue in disease management today,” says Kuraitis. “Are we going to continue to see a more carved-out model driven by the disease management companies and health plans, or do healthcare providers get reintegrated back into disease management?”

With MHS and PGP on either side of the spectrum, healthcare leaders await CMS’ next step in the process. “At this point, what Medicare is going to do is unclear. It’s very cloudy. I’m someone who has followed this since day one, and I have no clue what Medicare is going to do in relationship to disease and care management,” says Kuraitis.

Slow turnaround criticized

If the 10 groups involved in the CMS Physician Group Practice (PGP) demonstration project don’t know what areas to address until a year later, then how are they going to improve their programs?

That is a refrain being echoed throughout the managed care world.

CMS didn’t release the findings from the first year of the project until this summer, which was a year after the end of the demonstration’s first year.

If the 10 groups received the information sooner, David Wennberg, MD, MPH, president and chief operating officer of Health Dialog Analytic Solutions in Boston, said they may have been able to learn from their mistakes and improve services.

Speaking at the September 2007 DMAA: The Care Continuum Alliance’s Disease Management Leadership Forum (DMLF) in Las Vegas, Wennberg said, “There are lots of opportunities to substantially increase the delivery of data. We don’t need it perfect.”

Marilyn Follen, RN, MSN, Marshfield (WI) Clinic’s administrator of quality improvement and care management, one of the two physician groups that received financial bonuses, says receiving the data sooner would allow Marshfield to examine its programs and correct areas of concern. “One of the challenges that we had with this demonstration and continue to have is, as we talk about performance year one, we are in the middle of performance year three,” says Follen. “Such delays in data make course corrections difficult.”

The lag in time will remain a factor for year two of the demonstration project. John Pilotte, senior research analyst at CMS, said at the 2007 DMLF that the second-year results will be ready in the summer of 2008. That kind of news does not please those in the managed care field.

“The lack of data and the lack of quick data is far from optimal for these companies,” says Vince Kuraitis, JD, MBA, principal and founder of Better Health Technologies in Boise, ID.