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The Road to PCMH

Cora Nucci, for HealthLeaders Media, November 15, 2010
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The patient-centered medical home model is getting kudos from patients, physicians, and payers. But transitioning a practice to PCMH from a fee-for-service payment system is neither a small nor simple undertaking.

Data shows that patients are embracing the coordinated care approach, which makes them active participants in their own healthcare. Care team members like it because they can spend more time with patients and see fewer patients per day. And payers and physicians both like how the PCMH model enables changes to physician reimbursement. 

Capital District Physicians' Health Plan, Inc., a physician-founded and guided nonprofit health plan in New York state has been experimenting with the PCMH model since late 2008. Concerned with "the plight of primary care physicians," the board embarked on a multiphase pilot to test PCMH.  The primary objective was "revising the payment model," says Bruce Nash, MD, chief medical officer of CDPHP. "Delivering the same or better care at a lower cost is the quality marker," he explains.

All of CDPHP's 160 network physicians in the project serving 52,000 patients are in private practice; none is an employee of CDPHP. With the regional average annual income for primary care physicians between $150,000 and $200,000, CDPHP set a goal of raising it to between $235,000 and $285,000.
In Phase I of the pilot, CDPHP is paying physicians $50,000 as an opportunity for a bonus incentive based on quality and efficiency metrics and $35,000 as a stipend to compensate for their work in changing over their practices to the PCMH model.

Nash sees fee-for-service as "a major problem," and in a move to resolve it, CDPHP has adopted software that calculates payments using risk-adjusted capitation. This way, higher payments are pegged to sicker patients.

Phase II of its pilot will transition 21 more practices to the PCMH model, with the goal of helping them reach the National Committee for Quality Assurance's top PCMH level III certification.

Data for Phase I is just beginning to be analyzed. Costs for patients have gone up, Nash says, but not sharply. Network spending is trending at a rate of 12%, while the PCMH pilot is trending at 8%. He's awaiting more data, but, Nash says, "We're very excited about the potential."

To be considered for the pilot, practices had to have an EHR system in place, they had to be physician-led, and they had to be flexible.

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