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Arkansas Bets Farm on Value-Based Care

By Christopher Cheney  
   September 01, 2016

Providers shift delivery of care to value-based models
Clinton, Arkansas–based Ozark Internal Medicine and Pediatrics is among the state's early adopters of PCMH. A practice with about 3,500 active patients, OIMP was among the first five physician practices selected for the Arkansas BCBS PCMH Pilot Project in 2010 and among the first 69 Arkansas practices selected for CPC participation in 2012.

PMPM payments have eased the financial pain that small rural physician practices face in the shift to value-based care, says Stacy Zimmerman, MD, FACP, FAAP, the leader and sole doctor at OIMP. "Care management is the most important area and also the most expensive, especially for the small practice. PMPMs must consistently support care manager salaries and staff overhead, or the PCMH model will fail," she says.

At small practices, matching financial resources with costly investments in PCMH capabilities such as electronic medical record systems is daunting, Zimmerman says. "Decreasing our total cost of care for all of our patient populations has allowed us to be eligible for shared savings; but, unfortunately, the small practice panel put us at a statistical disadvantage compared to the large practices."

So far, the OIMP journey has been financially arduous, she says. "Ours has been net negative because we have to put a larger percentage of overhead toward the model than larger practices. For example, all overhead items associated with a PCMH like care management duties and salaries cost me the same as a 10-doctor practice."

Searcy, Arkansas–based Unity Health has experienced a payer-mix boost from Medicaid expansion but the health system, which is centered on 286-bed White County Medical Center, is seeking to offset Medicare reimbursement reductions, says Vice President and Treasurer Stuart Hill.

"We did see an improvement in our payer mix. From an inpatient perspective, we did see a payer shift to fewer self-pay patients. We did see a few more Medicaid patients; but in Arkansas, Medicaid expansion was mostly on the private insurance side. Those who were 138% over the poverty guideline qualified for commercial insurance as opposed to traditional Medicaid," he says.

"We're still taking greater Medicare cuts than we are getting benefits from the private option Medicaid expansion. In 2016, we're estimating probably a $3.5–$4 million net deficit because Medicare essentially got zero market basket increases. You add that to sequestration," Hill says.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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