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PCMH Model Soaring, Despite Funding Challenges

January 20, 2016

"Showing payers the ROI of the [patient-centered medical home] model will help them want to [support] it. Payers are realizing increasingly that it is a good investment on their part," says NCQA executive Paul Cotton.

Patient-centered medical homes are exploding in popularity as healthcare organizations look for new models of care to lower costs and improve quality and outcomes. 

Research from the National Committee for Quality Assurance finds that the number of PCMH incentive programs around the country has increased from 26 in 2009 to over 160 today, a growth of about 82%.


Paul Cotton

NCQA recently shared its findings on trends and challenges within the PCMH construct in a Google Hangout session.
 
A More Patient-centered Approach
PCMH models are appealing to providers that are trying to shift toward value and away from fee-for-service medicine because they place an emphasis on primary care services in order to reduce the overutilization of expensive healthcare resources, particularly by patients with chronic conditions, says Paul Cotton, NCQA's director, federal affairs.


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"I think the patient-centered medical home model can really be the cornerstone of the transition from volume to value because it focuses on primary care and on what patients themselves most value. The traditional primary care model has been the patient waits in the waiting room, then sees the doctor for five or ten minutes. Patients didn't have a long-term relationship with the doctor and you were on your own to coordinate your care," he says.

"The PCMH makes sure you are looked after by a team of providers who know who you are and what you need. They know who your other providers are, and they have your back. They also have access to electronic health records that allow them to coordinate care in a more patient-centered way."

Better coordinated and more effective primary care helps health systems lower the overall cost of care while also improving the patient experience, Cotton adds.

"By providing patient-centered primary care, providers can do a much better job of caring for that individual. What we are seeing [from the data] is that because they have better primary care, patients are much less likely to get complications that require them to go to the emergency department or to have a hospital stay. This is reducing expenses because those are much more expensive than a visit to a primary care doctor. PCMH patients … also tend to be happier with their care, which is one part of the movement toward value," he says.

Also, in a traditional primary care setting, a patient who does not follow her treatment plan is labeled as non-compliant and blamed by clinicians for not getting better. In a PCMH, Cotton says, the patient is at the center of the planning process and receives more support to be successful.

"With a PCMH, they ask the patient why the plan didn't work for them. Perhaps it was too costly or too difficult to maintain. [The team] tries to figure out another care plan that is going to work better for what is going on in the patient's life. It's a conversation now, and that kind of personal approach is getting better results," he says.


Margaret O'Kane

Funding the Transformation
While PCMHs are demonstrating success in lowering costs and improving patients' health, they are typically not being funded by payers at a high enough level to be sustainable in the long run, NCQA president Margaret O'Kane said during the Google Hangout.

Citing a study that was published recently in the Annals of Family Medicine, O'Kane said the most common reimbursement model is a per-member-per-month payment from payers, but that most are typically below the roughly $5 PMPM it costs a primary care practice to operate a PCMH.

"Practices are often not given the money that they need to implement the model fully. PCMH is a delivery model that really is quite different from regular primary care in that it takes the responsibility for managing a panel of patients for population health," O'Kane said.

The care management being done by PCMHs creates a lot of additional work and cost as compared to the traditional model of primary care, O'Kane says, because practices need to hire more support staff, implement electronic health records systems and data tools, and expand access to care.

One way for providers to negotiate a higher PMPM from payers, Cotton says, is to show them the 2015 NCQA PCMH Evidence Report that indicates the positive impact of the PCMH model. NCQA has also conducted several studies that show PCMHs reduce emergency department utilization and lower the total cost of care for patients in a PCMH program.

"Providers can share the evidence report with payers to show that they should be supporting the PCMH because it is good for their bottom line and for their patients. It's a win, win… It's not just about making the transformation, it's about sustaining the new model of care. It does cost more because you are adding hours to increase access and investing in technology and electronic health records," he says.

"Studies show there is a pretty substantial ROI depending on the population a practice cares for. So, looking at the evidence and showing payers the ROI of the model will help them want to do it. Payers are realizing increasingly that it is a good investment on their part."

Other Payment Arrangement Options
In addition to the PMPM model, Cotton says some larger practices are entering into shared savings arrangements with payers to fund the PCMH.

"It takes a pretty sophisticated practice to take that on," he says. "It's very challenging, but the idea is that if the PCMH is reducing cost for patients by keeping them out of the ED and hospital, then the provider can share in those savings."

A more common approach, Cotton says, is for the primary care practice to use a separate billing code for the PCMH's care management program, which allows it to collect from the payer for those extra services that are being provided.

"Only a PCMH can bill for that because one key to success is to carefully manage that patient through the care management program."

Overcoming Barriers
The two biggest challenges for an organization looking to launch or sustain a PCMH, Cotton says, are assuring adequate funding through payer negotiations and having consistent leadership support.

"The number one thing is to make sure you have sufficient resources to sustain it because it does cost more to be a PCMH. You have to make sure the practice is being reimbursed enough to sustain it," he says.

"Also, leadership within the practice at the top is so important for making sure you have all members of the team understanding that they are in this together. You need to have leadership committed in order to have buy-in throughout the practice."

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