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Payer Action in the ACO Market: Part 1

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A look at what Cigna is doing to shake up the medical group market

Something Jeff Petry, vice president of strategic initiatives for Premier Health Alliance, said at the Healthcare Informatics Executive Summit in May, really struck me. Petry said during the “ACOs: Policy, Strategic, and IT Issues” panel that the organizations that are currently investing the most money in ACO creation are payers. Petry did however point out that the payer-led ACO arrangements, like Aetna’s hospital-centric efforts and Cigna’s physician-driven collaboratives, are fueled by claims data, rather than by clinical information. My question is how long will it take to incorporate clinical data in these ACOs and will most of these payer-led efforts focus on reducing medical costs like unnecessary testing, rather than other population health elements like reduced readmissions and chronic disease management? I’ll take a look at what payer action is happening now in the ACO market in a two-part blog series.

In a National eHealth Collaborative session, “Spotlight on Payer Engagement in Health IT: Case Study on Cigna Healthcare,” earlier this week Cigna Healthcare presented some results from its “Collaborative Accountable Care” model. The Medical Clinic of North Texas, one of Cigna’s provider networks, has seen some positive results:

  • 7 percent better than market emergency room avoidable visit rate
  • 2 percent decline in hospital readmissions
  • 2 percent lower than market medical cost trend
  • 3 percent improvement in blood sugar control in diabetic patients

Cigna patients in the Darmouth-Hitchcock medial home had these improvements:

  • 10.4 percent improvement in overall gaps-in-care closure rates
  • 16 percent greater closure rate for hypertension gaps
  • 8.1 percent greater closure rate for diabetes gaps

Currently, Cigna has 27 Collaborative Accountable Care arrangements in place. The insurer plans to be have 40 to 50 arrangements by the end of 2012, and around 100 end of 2014, which would be close to 10 percent of its population. “We think that will begin to make a material difference in both our total medical cost value proposition to clients and our quality value proposition,” said Richard Salmon, M.D.,  Ph.D., national medical executive for performance measurement and improvement, Cigna Healthcare.
Cigna is also doing some ACO pilots that incorporate exchange of clinical data in addition to claims data.

Before Cigna engages in this ACO partnership with a medical group, it looks at the commitment of the medical group’s C-suite for the triple aim of providing information, clinical integration, and incentives to providers. The partners must also have NCQA accreditation or agree to achieve it shortly after the program starts. “We also look for groups that have successfully improved traditional quality metrics in the past because it’s easier to get physicians to improve their practice patterns around encouraging more care, than it is around physicians tackling the much harder care coordination that results in a reduction in services,” said Salmon.

A big piece of the Cigna ACO is employing a new nursing position, the embedded care coordinator, to close healthcare gaps. The care coordinator is electronically sent a census of patients in hospital, and then makes transition of care calls to reduce readmissions, as well as identifies chronic disease patients to engage to reduce hospital admissions. Coordinators also perform monthly gaps in care analysis and reach out to those patients.

Cigna drives its ACOs by an action plan that requires medical groups to adopt three elements: e-prescribing, inputting Cigna preferred specialists into their EMRs, and expanding their regular office hours to reduce ED visits. “Based on that specific action plan, we make a conservative estimate of what we think that plan is worth,” said Salmon.  “Then we agree to pay the group a care coordination fee for each of their virtually-aligned patients from the start of year one going forward.”

The care coordination fee, which is based on adherence to evidence-based medicine measures, as well as HEDIS measures, is modest, he said. The fee is about a fourth of what is typically paid in PCMH initiatives, around $1.50 to $2 per member, per month. “If the group improves both quality and affordability, then they are eligible for an adjustment in their care coordination fee from what it was set at initially to a larger amount,” said Salmon. If medical cost savings occur, then organizations can receive a higher fee of $2 to $3.50 per member, per month, for the next year’s care collaboration payment. So far half of the medical groups have hit quality and medical cost improvements, but Salmon says Cigna isn’t satisfied yet.