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Report: Complex and Rapidly Changing Payment Models Challenge Physician Practices

October 26, 2018
by Heather Landi, Associate Editor
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Physician payment models are becoming more complex and the pace of change is increasing, creating challenges for physician practices that might hamper their ability to improve the quality and efficiency of care despite their willingness to change. Those are among the findings of a new joint study by the RAND Corporation and the American Medical Association (AMA).

RAND researchers examined how alternative payment models (APMs)—payment models other than fee-for-service—have affected physician practices. For the report, “Effects of Health Care Payment Models on Physician Practice in the United States: Follow-Up Study,” researchers interviewed and surveyed physicians and other staff in 31 practices in six markets, including a variety of practice sizes, specialties, and ownership models.

The work was a follow-up to a 2014 study that also examined APMs’ effects on physician practices. Whenever possible, researchers re-interviewed the same physicians and practice leaders that participated in the previous study, according to a press release about the study.

“The complexity and pace of change in how physicians are paid for their services has required practices to spend substantial resources just to keep up with program details,” Mark W. Friedberg, M.D., the study’s lead author and a senior physician policy researcher at RAND, a nonprofit research organization, said in a statement. “While the practices in our sample generally voiced support for the goals of alternative payment models, these implementation challenges could make it difficult to achieve them.”

The study findings suggest that physician practice engagement with APMs would be enhanced by simpler APMs (to help practices focus on improving patient care); a more stable, predictable, and gradual pace of change; greater support for new capabilities and timely data; and reexamination of how practices might respond to APMs that involve downside financial risk.

Study Results

APMs are changing how physicians are compensated for the care of their patients to create stronger incentives for efficient, high-quality medicine. They often involve either bonuses for meeting quality goals or penalties for falling short.

In this latest study, researchers found that several trends have persisted since the 2014 study. Namely, practices have adopted new capabilities to respond to APMs. These included behavioral health capabilities, data analytic infrastructure, and information technology. Similar to the 2014 study results, the latest study found that practices substantially modified APM financial incentives before passing them through to frontline physicians. Individual physician incentives based on costs of care were rare, even within practices with strong cost-containment incentives from payers, according to the latest study.

“Despite engagement with new APMs, most practices reported that internal financial incentives for individual physicians had not substantially changed since 2014. Modest bonuses for quality performance remained common, and with the exception of small, independent practices (for which physician-owner incentives were inseparable from practice-level incentives), individual physician financial incentives based on costs of care were almost nonexistent,” the study stated.

As in the 2014 study, practice leaders deployed a range of nonfinancial strategies to influence physician decision-making, such as internal performance reports, that appealed to physicians’ competitiveness and self-esteem.

Researchers found that all the challenges described by respondents in 2014 persisted in the current study. In particular, issues related to data continued to constrain practices’ ability to understand and improve their performance. As in 2014, many physician practices -- especially those that are small and independent -- reported that they lacked the skills and experience with data management and analysis that are needed to perform well in alternative payment methods, according to the report. Building in methods to help these practices master the use of health data would improve the potential success of many alternative payment methods.

Operational errors in payment models also continued to be a source of frustration for physician practices, at times with financial consequences, according to the report.

“In some cases, these negative experiences reduced practices’ future willingness to participate in alternative payment models, even when offered by different payers. Because physician practices typically participated in multiple payment models from a variety of payers, challenges related to interactions between payment models also persisted,” the report stated.

Researchers also identified new findings regarding APMs. Across the markets studied, leaders perceived an acceleration in the pace of change in alternative payment models from both private insurers and government programs since 2014, at least partially driven by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program.

Sudden or unexpected discontinuations of APMs were particularly challenging for physician practices and other market participants that had made commitments or investments under the assumption that APMs would continue, according to the latest study.

APMs have become more complex, due to an expanding number of performance measures and uncertainty concerning performance thresholds for penalties and rewards, the respondents reported. Practices reported that understanding complex new payment models often entailed a significant resource investment. Some practices used their knowledge of complex APMs to receive more credit for their preexisting quality without materially changing patient care.

What’s more, physician practices have become more averse to APM downside financial risk. Risk aversion was especially prominent among practices that had previously experienced losses in APMs or that were inexperienced in managing risk. Some practices responded to APMs, the report stated. “In some cases, practices renegotiated contracts with payers to reduce their excessive downside risk or transfer some of that risk to partners such as hospitals or device manufacturers,” the researchers wrote.

“Physicians tell us that it’s more difficult than ever to understand the growing complexity of payment models and they are straining against a conflicting muddle of public and private value-based policies and rules that are continually in flux,” AMA president Dr. Barbara L. McAneny, said in a statement. “The resulting administrative burdens take physicians away from patient care. Today’s report is a call to action to align multiple payers and payment models with consistent measures aimed at improving patient care. It is clear the long-term sustainability of payment reform hinges on value-based payment models that must be operationally and financially sound, sustainable over time, aligned across payers, and must work for physician practices and patients. The AMA is committed to spearheading and engaging these efforts.”

In addition to finding ways to reduce the complexity of alternative payment methods, study findings suggest that a slower and more-predictable pace of change might benefit medical practices, payers and other stakeholders.

As in their previous study, researchers found that physicians were broadly supportive of alternative payment methods that enabled their practices to make noticeable improvements in patient care. They voiced satisfaction with clinical improvements, even when they did not result in financial bonuses.

However, when the alternative payment methods created new reporting and documentation burdens or when they created no perceptible improvements in patient care, physicians reported disengagement and skepticism, according to the report.

Allowing practicing physicians and other practice leaders to help design alternative payment methods might help improve physician engagement and improve the likelihood that such strategies will produce improvements in patient care, according to the report.

The study findings are intended to help guide system-wide efforts by the AMA, which sponsored and co-authored the study, and other health care stakeholders to improve alternative payment models and help physician practices successfully adapt to the changes.


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EXCLUSIVE: NAACOS President Foresees “Shrinkage in Accountable Care Movement” Pending MSSP Final Rule

December 5, 2018
by Rajiv Leventhal, Managing Editor
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If CMS doesn’t scale back some of its proposed changes to the MSSP, the government’s largest value-based payment program will be significantly affected, says one ACO leader

When the Centers for Medicare & Medicaid Services (CMS) released its proposals to overhaul the federal Medicare Shared Savings Program (MSSP), it was expected that industry associations, along with the ACOs (accountable care organizations) themselves, would push back strongly.

After all, in the August proposed rule, CMS, which has the core aim to push these organizations into two-sided risk models—so that Medicare isn’t on the hook when ACOs overspend past their financial benchmarks—suggested to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years.

One option, per CMS’ proposal, would be the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk. The second option would be the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.

But where CMS, in its proposals, truly clamped down was through two core recommendations that stakeholders took issue with: shortening the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years to two years; and cutting potential shared savings in half, from 50 percent to 25 percent for one-sided risk ACOs. These proposals, if finalized, will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.

One of the trade groups that has done much of the heavy lifting when it comes to pushing back on the government’s proposals, and offering evidence as to why ACOs need more time in one-sided risk models while being able to reap more of the shared savings, is NAACOS (the National Association of ACOs,) an association comprised of more than 360 ACOs across the U.S.

In a recent interview with Healthcare Informatics, Clif Gaus, president and CEO of NAACOS, confirmed that the reduction of shared savings and the shortened time allowed in one-sided models are two of the biggest problems the group has with the proposal. Specifically, Gaus says that the reduction in potential shared savings “would be very devastating to the growth of new ACOs.”

He explains that after polling NAACOS’ members, asking them if they would hypothetically apply to be an ACO knowing that at first, they would be limited to 25 percent of shared savings at most, “the near universal response was no, they wouldn’t have joined the program.” Gaus adds, “The potential of 25 percent savings just isn’t enough to offset our investment costs of starting and operating the ACOs,” noting that ACOs have to obviously put up money to get going, and sometimes it’s very hard for medical group practice-dominant ACOs to buy IT systems, not to mention the whole clinical transformational aspect of ACOs where they are typically hiring nurse coordinators, and in some cases opening 24/7 call centers.

“There is a real start-up and operational cost that’s involved, and [getting] 25 percent of the shared savings doesn’t return enough income to offset those,” he says.

Regarding the proposal to shorten the time in a one-sided risk model from the current six years to two years, Gaus points to CMS’ own data which shows that more experience in a federal ACO model drives more savings, but typically the first few years are not profitable for the ACO.

“We have many examples where an ACO has been in the program and was able to turn the corner by the fifth or sixth year,” he says. “Medicare has to have a long-term view of this. We are investing in a totally new redesign of the healthcare system, so give us time to learn how to transform that care into more efficient and higher-quality care. We are troubled by two years,” Gaus frankly admits. He believes that capping the time in a one-sided risk model at three to four years “is reasonable,” and is what many other associations have proposed.

Indeed, while NAACOS and other industry groups have made their arguments to CMS clear, the federal agency has so far taken a firm stance that upside risk-only ACOs have not been effective. A such, CMS seems to be fine with these ACOs leaving the MSSP— by far the largest federal ACO model, with 561 participants—if they are unwilling to take on more risk.

But Gaus believes that even though CMS did come out of the box with an “aggressive negative message” about one-sided ACOs, the agency has now moderated its views. To this end, a recent study from NAACOS and Dobson Davanzo & Associates, based on a different way of measuring financial success—by comparing actual costs over time in the ACO’s market as opposed to CMS’ method of calculating an initial risk-adjusted spending benchmark for each ACO based on its historical spending, without considering underlying market factors—revealed that MSSP ACOs generated gross savings of $1.84 billion for Medicare from 2013 to 2015, nearly double the $954 million estimated by CMS.

“The whole dialogue has changed,” says Gaus. “We have met with Seema and a number of her staff over the last two months, and the driving factor to this change in dialogue is that the 2017 data, from CMS’ benchmarks, turned the corner and showed that net-net the ACO program was saving Medicare money. You don’t see CMS coming out anymore arguing that the program is losing money,” he says.

What a Final Rule Might Look Like

Gaus acknowledges that a core challenge for CMS is being in the precarious position of pushing down too lightly in its regulations, which could result in the pace of change being too slow, or pushing down too hard, which could result in provider organizations fleeing value-based care initiatives.

“We know the government is wrestling with this issue, and so are we,” Gaus says. “In the crafting of our comments to CMS, as well as the comments from the AHA [American Hospital Association], AMA [American Medical Association], and others, we felt that the balance is the issue here, and there needs to be some movement toward the direction that CMS is pushing. We do respect their concerns, to a degree, but we just thought they were too aggressive in their speed to risk, or speed to remove an ACO from the program,” he says.

Gaus is hopeful that the final rule on the future of the MSSP—which he believes could come by the end of the year, but no later than the end of January—will reflect the industry’s concerns. “History says that this administration, like many others, does listen to input from stakeholders that the rule affects. I believe that they really do understand our positions,” he adds.

At the same time, NAACOS’ position is that the reduction in potential shared savings, as currently proposed, is a “total deal breaker,” and that there is no wiggle room for a number between 25 and 50 percent, Gaus asserts. He adds, “If they don’t go back to 50 percent, we will see a long-term significant shrinkage in the ACO movement and a significant emanation of accountable care.”

Importantly, Gaus also notes that ACO programs are voluntary in nature, a key consideration that he believes CMS often forgets. “Nobody has to be an ACO. [Providers] are making a bet of their capital, that they can invest that capital in cost containment, in care transformation, and [in return], they will get back in the shared savings more than they invested. It’s almost like buying stock—you made the investment and you hope the return is worth it,” he says.

Gaus says that he has told Verma in their many conversations that in many ways “we are at a crossroads, and we have to get the balance right, or we are going to see a denigration of what still remains the largest government value-based payment program.”

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Recent Humana Report Points to Encouraging Progress in the Shift to Value-Based Care

November 26, 2018
by Heather Landi, Associate Editor
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Humana's CMO, Roy Beveridge, M.D., shares his perspective on the cultural shift that is necessary for providers to be successful under value-based care models

A recent value-based care study by Louisville, Ky.-based insurer Humana found that patients treated by physicians in Humana Medicare Advantage (MA) value-based agreements had more preventative care screenings and better health outcomes compared to patients in Humana MA fee-for-service agreements.

The Humana report details results in the areas of prevention and outcomes, quality measures, and cost for Humana MA members affiliated with physician practices in value-based agreements with Humana. This is the fifth year Humana has published a value-based report and the insurer reports ongoing progress in improving health outcomes and lowering costs.

As of Sept. 30, 2018, Humana’s total Medicare Advantage membership is more than 3.5 million members, which includes members affiliated with providers in value-based and standard Medicare Advantage settings. According to the report, Humana reached its 2017 goal of having 66 percent of its 2.9 million individual MA members affiliated with primary care physicians in value-based agreements.

For the annual study, Humana compared quality metrics and prevention measures for calendar year 2017 for approximately 1.74 million MA members who were affiliated with providers in value-based reimbursement model agreements to approximately 130,000 members who were affiliated with providers under standard MA settings, which doesn’t offer added incentives to providers who meet quality or cost targets.

Humana also compared medical cost and utilization for calendar year 2017 for approximately 1.5 million MA members who were affiliated with providers in value-based reimbursement models to approximately 146,000 members who were affiliated with providers under standard MA settings as well as to original fee-for-service Medicare.

The study found that patients affiliated with physicians in Humana MA value-based agreements had more favorable outcomes in all Healthcare Effectiveness Data and Information Set (HEDIS) Star measures. HEDIS is a measurement tool developed by the National Committee for Quality Assurance (NCQA) to assess health plans’ performance on various dimensions of care and service.

Humana MA members affiliated with physicians in value-based agreements experienced 7 percent fewer emergency room visits and 5 percent fewer hospital admissions per thousand compared with standard MA settings in 2017, and the number of preventive screenings was 11 percent higher for colorectal cancer and 10 percent higher for breast cancer.

Patients with diabetes who are affiliated with value-based physicians had more condition-specific screenings and better adherence to medications, demonstrating tighter control of blood glucose and blood pressure levels. The report indicates similar results for patients with hypertension—better medication adherence rates and better management of their blood pressure.

What’s more, the study found that medical costs for patients who are affiliated with physicians in Humana MA value-based agreements were 15.6 percent lower than original Medicare FFS. In addition, more physician practices in Humana MA value-based arrangements received a shared savings surplus in 2017 compared to 2016, up to 70 percent from 60 percent the prior year, according to the latest report.

“We believe value-based care is essential to achieving improved population health. Thus, we continue to work closely with physician practices to support them in the transition to value-based care—with actionable data, care coordination, clinical programs, predictive models and innovative solutions,” Stanley Crittenden, M.D., a physician and lead medical director, national medical review, at Humana, wrote in the report.

According to the report, citing statistics from MedPAC and the Henry J. Kaiser Family Foundation, about 10,000 people join Medicare daily, and the Medicare population is expected to increase from 56 million in 2015 to 81.5 million in 2030. Eighty-three percent of Humana’s 3.3 million Humana MA members, as of December 31, 2017, are living with at least two chronic diseases. Humana is using a holistic approach, leveraging value-based reimbursement models, to address this challenge, according to company officials.

Speaking with Healthcare Informatics earlier this month, Roy Beveridge, M.D., Humana’s Chief Medical Officer, notes that the important takeaway from the value-based care report is the consistent progress of physician practices in value-based care arrangements to improve quality and reduce health care costs.

Roy Beveridge, M.D.

“Based on the report, there’s continued improvement in breast cancer screening, in cervical cancer screenings, and there’s improvement in hospitalizations and ER visits. We’re five years out, and we’re continuing to improve on those metrics that everyone agrees are really important,” he says, noting in particular the 7 percent fewer ER visits among Humana MA members in value-based arrangements. “If you continue to have a decrease in ER visits, that’s an indication that the patient is more engaged with her primary care physician or her specialist so that when she is sick, she is reaching out to her primary care doctor. I look at those quality metrics and I’m very excited by that progress; that change didn’t happen over a year or so, but it continues to accelerate.”

Practicing value-based care works to address the nation’s chronic disease epidemic by giving physicians the support and data they need to focus more on prevention and reduce acute care episodes, Beveridge says. “This model allows physicians to focus time and energy on those patients who need the most support to stay well at home, and out of the hospital. Physicians are clearly seeing the benefit of improved patient outcomes and more shared savings.”

Continuing challenges in the shift to value-based care

While the report points to ongoing progress in the shift to value-based care and successful outcomes for those practices in value-based care arrangements, there continue to be significant barriers for healthcare provider organizations attempting to make that shift. For physicians, moving into value-based care often requires an increase in population health management capabilities and access to accurate, actionable data.

“They need technology; they need data from places like Humana and other big payers; they need to be given time so they can transition; they need the educational tools,” Beveridge says of physician practices transitioning to value-based care models.

Currently, many healthcare organizations find themselves straddling two different reimbursement models, fee-for-service payment models and value-based payment models, or what’s offered referred to as “having a foot in two canoes,” and that continues to be a significant challenge for physicians, he says. “It’s this in-between time, the transition time, where physicians are struggling, and they continue to struggle as they are moving from traditional fee-for-service to outcomes-based reimbursement,” he notes.

In the past five years that Humana has been measuring and reporting progress, one of the biggest lessons learned has been the pace of change, Beveridge says. “I think we, and the government and the industry, underestimated the time that it takes for there to be cultural change in the movement from fee-for-service to value. I naively thought, five or six years ago, that this would be a faster process,” he says, adding, “We are moving collectively in that direction, and at a good clip, but I thought that it would go faster.”

Data and analytics play an integral role in the transition to value-based care payment models and are foundational to success under these models, Beveridge says, and to this end, Humana supports physicians with actionable data to give them a deeper understanding of their patients. However, there also are cultural and operational shifts that are required to succeed under value-based care, he says.

“We have physicians coming in who say, ‘I want to move to value very quickly because I understand it.’ We will tell them it’s really a three- to five-year process. You want to make sure that your data systems can do this. You need to make sure that, from a cultural standpoint, your physicians and nurses understand this. There is a lot of effort in being successful in value-based care. People who underestimate the complexity often don’t do so well. We try to be the shock absorber, and remind people, this is harder than they may think and that you need data systems, you need analytics, and you need the right mindset,” he says.

He continues, “Someone once explained it to me like this—in the fee-for-service world, in the morning huddle, you sit and talk about the patients that are coming in to the office in the next eight hours. In the value world, you sit down with data and you say, ‘Who hasn’t come in to the office in the last eight weeks or in the past year? What do we need to do to engage those patients so that we can help the people who are not coming in to the office that day?’ It’s a cultural change that has to occur. It’s not about taking care of the patient in front of you, it’s about taking care of the patients who are not in front of you.”

He adds, “Until everyone’s trained and thinking that way and you’ve got the data to know who’s not there and why there are not there, it’s hard to be successful.”

Beveridge also contends that primary care physicians are vital to delivering more integrated care to patients, and, moving forward, healthcare organizations that want to be successful under value-based care payment arrangements need to place primary care physicians at the center, he says.

The American Academy of Family Physicians (AAFP) reports that primary care physicians receive 6 percent of the total distribution of health care payments nationally. According to the Humana report, primary care physician practices in value-based arrangements with Humana received 16.8 percent of every dollar spent on member care in 2017. Non-value-based primary care physician practices contracted with Humana received 6.9 percent of total payments Humana distributed in 2017.

“If you believe in the value model, then primary care is king, it’s the most important part. You have to pay for that. And what you see with the data is that we believe that the PCP is the lead and that she needs to be compensated appropriately, because historically, primary care physicians have been underpaid, undervalued and under respected,” Beveridge says.

Humana’s experience with value-based payment arrangements has indicated that, with the evolution of value-based care, primary care physicians are relying on a team-based approach to stay connected to their patients in their everyday lives. To support this, Humana is increasingly focused on augmenting the reach of primary care providers with in-home care services for recently discharged patients.

Beveridge notes that Humana is accelerating its investments in an integrated care delivery strategy, which encompasses supporting physician practices and care providers and leveraging technologies and clinical analytics to enhance the company’s holistic health approach.

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In Northern Virginia, Rethinking ACO Strategies—For PCPs and Specialists

October 30, 2018
by Mark Hagland, Editor-in-Chief
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Inova Health's Dr. Tricia Nguyen shares her perspectives on what she and her colleagues are learning about some of the underlying challenges in ACO work

With the U.S. healthcare system undergoing rapid, transformative change, one of the big unanswered questions is, what will happen to hospital-physician alignment over time? Many physicians, burdened by bureaucracy and practice management challenges, are fleeing into employment by hospitals or by large hospital-affiliated or hospital-owned physician groups, while others are entering into a variety of contractual relationships designed to keep them afloat in practice. In a sense, physician alignment is a sort of “wild card” in the emerging healthcare system. How will accountable care and value-based healthcare delivery and payment work—will physicians mostly participate in those arrangements simply as hospital and health system employees, or will they chart a different course, somewhere between the extreme autonomy they’ve had under discounted fee-for-service reimbursement, and straight hospital system employment? No one really knows for sure, and it appears that things could evolve forward distinctly in the diverse metropolitan and regional healthcare markets across the U.S.

Some of those issues were discussed in one of the articles in this year’s Healthcare Informatics Top Ten Tech Trends story package, in the third issue of this year, in the article “Markets and Medicine—Where Do Physicians Land, in the Emerging World of U.S. Healthcare?” And one of the industry leaders interviewed for that article was Tricia Nguyen, M.D., a senior executive at the Falls Church, Va.-based Inova Health System, and who came to Inova last year in order to help to lead and expand a clinically integrated network and joint-venture insurance company, that Inova had created with Aetna. “My title was CEO of Commonwealth Health Innovation Network,” she explains. “But as it turns out, I found within 30 days that we didn’t have much to scale, so I’ve been focused internally, and now lead our population health efforts under the title of senior vice president for population health.”

Tricia Nguyen, M.D.

Dr. Nguyen sees a host of challenges, as well as definite opportunities, in the near future, in terms of how to get physicians and hospital-based health systems on the same page, and aligned to partner for the emerging future of healthcare.

Speaking of the northern Virginia healthcare market in which the five-hospital Inova system has a significant market share, Nguyen says, “This market is in a bubble; 70 percent of the population is insured by some carrier, employer-sponsored generally,” she says. The system serves a very affluent population, with “double-income, double-degree families”; and Inova controls 60 to 70 percent market share in its area. Given that market dominance, she says, “For the system, there’s not a real pressure to change, but we saw a real opportunity in this joint venture with Aetna. Providers are still making a lot of money on the fee-for-service payment schedule, because so many of their patients are commercially covered, so they don’t have to deal with a lot of government products. Some family practice and internist physicians have a high percentage of Medicare, but many are no more than 50 percent Medicare. Many are 70 to nearly 100 percent commercial. So as far as fee for value, they’re worried about MIPS and MACRA, and they want help with that.”

The important revelation that’s emerging for her and her colleagues, Nguyen says, is the realization that physician alignment to date has been missing a key component. “The primary care physicians have essentially been doing value-based care for several years here, but only for the CareFirst population,” she says, referencing CareFirst, a regional BlueCross BlueShield company that offers a range of health plans across Maryland, the District of Columbia, and northern Virginia. “Have they changed practice patterns? A little bit, but not much.” And, importantly, she says, she and her colleagues are realizing that “Fuller value will come when we can identify the high-value specialists, those who are high-performing, low-cost, given the way they practice, and using them. That to me is the secret, and no one has that secret mastered quite yet. And that’s because the tools don’t really exist to help. I believe that ACOs are too focused on primary care, and that primary care has to bear the burden to drive down the costs of care, when in fact it’s going to take collaboration with the specialists. While care coordination is important for holistic health, to generate real savings, you’re going to have to drive down specialty care costs as well.”

Inova encompasses five acute-care facilities, and employs about 500 providers, about 120 of them primary care, the rest are specialists. Inside the broader umbrella of value-based contracting, Inova operates Signature Partners, an accountable care organization with about 34,00 lives, and with a clinically integrated network (CIN). Signature Partners has been in place for over three years. “This year, “Nguyen says, “we decided to split up into two ACOs; one is a high-performing Inova medical group; the other is the original ACO that we kept going. The 34,000 number encompasses both.

One of the challenges, Nguyen says, is that “The specialists are not yet thinking about value. But the primary care doctors have been on a semi-value journey. CareFirst has created a PCMH [patient-centered medical home] model and payment model for primary care, to keep them independent. They’ve been very successful in their model. They give PCPs a certain base, and it’s under Medicare rates. And if they deem you to be PCMH, they give you x bump in your fee schedule. Once you’ve met that, for the level of engagement and savings you generate, you get that dollar amount based on your engagement and quality, as a form of an additional increase in your fee schedule for the next year.”

One of the challenges, Nguyen notes, is around the geography of her organization’s service area. “CareFirst is a health plan. They’re in Maryland and cross over to northern Virginia. It’s interesting the relationship that CareFirst has with Anthem. There’s a Highway 123 in northern Virginia. And CareFirst does not cross 123, and neither does Anthem. The program that they’ve had in place since 2012, has created virtual pods with primary care physicians, where they aggregate them together and call them a pod, and have engagement leaders and care managers, and they’re incentivized to work with care managers from CareFirst. So the primary care physicians have essentially been doing value-based care for several years here, but only for the CareFirst population.” Thus, the moderate but still-modest change in practice patterns that has been elicited from that set of contractual relationships.

Is this an example of the proverbial “one foot in the boat, one foot on the shore” phenomenon that so many are witnessing in U.S. healthcare right now? “Yes, absolutely,” Nguyen says. The existence of so many different payment systems “has kind of forced the market to think this way. About 120 of our employed medical group has a large book of business with CareFirst, and so they act differently with those populations now. They treat them as though it’s a fee-for-service environment, but our own primary care practices within are also different. There was a practice we acquired about a year ago that’s probably the premier primary care group within CareFirst. They’re one of the most efficient; and I can say that because their operational incentive award amounts are very high, among the highest in CareFirst.”

Speaking of that specific group, Nguyen says, “When I look at their ACO performance per beneficiary spend, their target spend is on average about $7,500 at most; many could run $11,000 per member per year. The way they practice is just very different. They try to manage everything virtually, telephonically, etc. We’ve started to try to uncover and find areas of opportunity to spread across our medical group, but also across our CIN. Our CIN doctors don’t really have an incentive to change. We’ve been able to generate change within the group, but the MSSP has not generated savings, so I think they’re becoming a bit disillusioned.”

What is the secret of their success? “It’s really in identifying the high-value specialists, those who are high-performing, low-cost, given the way they practice, and using them. That to me is the secret, and no one has that secret mastered quite yet. And that’s because the tools don’t really exist to help. I believe that ACOs are too focused on primary care, and that primary care has to bear the burden to drive down the costs of care, when in fact it’s going to take collaboration with the specialists. While care coordination is important for holistic health, to generate real savings, you’re going to have to drive down specialty care costs as well. And we have about 100 cardiologists we employ; and in a population of 100,000, how many cardiologists do you need? I probably have 20 times the cardiologists I need; I’m just guessing about the precise proportion, but we have an oversupply.”

Given the complexity of that situation, what is the solution to the path into value? “The solution,” Nguyen says, “is that they’re going to have to start tiering their network—by physician and not by group. They’re stuck in contracting by group. CMS [the federal Centers for Medicare and Medicaid Services] and the private payers will have to get to the level of contracting at the individual specialist level. This is how contracts happen today—under the tax ID number; and the performance of the individual provider in a group gets mixed in with their peers. And so it’s impossible to get down to that level.”

So what can CMIOs, chief quality officers, and other health system leaders do, to promote change in this context? “They can engage in provider profiling at the MPI level,” Nguyen says firmly. “Health system CMIOs need to start thinking about hospital-based specialist performance data, and claims data, in a broader, more strategic context. Nobody’s done that yet. Everybody’s mired in the whole concept of integrating EHR [electronic health record] and claims data. But so far, integrating EHR and claims data has led only to more robust reporting on select measures, but it’s primary care-specific. There’s no integrated provider reporting across their EHR, practice management data and claims data, to understand specialty care.”

For example, Nguyen says, “Take a cardiologist who practices in the hospitals and also bills for services. There’s a set of activities they do in the inpatient space that could be integrated. For example, if a patient is admitted for an acute MI, does the cardiologist provide that care or does the cardiologist also bring other specialists in? If they’re in for an acute MI, they could manage the person’s condition with consultation with a hospitalist internist, with follow-up by a diabetologist, for example. But unless a person is in acute renal care, then they need acute care by a nephrologist. But that data that can measure and performance by that specialist is available in the hospital data; you can also see it in the claims data as well. But if you take the case of an orthopedic surgeon that does a procedure in the hospital, one surgeon could cost more than another based on the prosthetics and implants. But that data is wrapped into the DRG that the hospital gets paid, and the hospital gets dinged, not the physician. And so it’s not in the claims data.”

In other words, she says, “We need to think about whom we’re holding accountable for the cost of care. It’s a shared responsibility. You have to manage the referral network and guide members to the high-value specialist. There are some basic things they can do with chronic conditions; but they must collaborate with their specialist peers.”

Does Dr. Nguyen have any other advice for CMIOs and CIOs? “Yes,” she says. “Don’t over-invest in EHR data for ACO quality measures at this time; focus on claims data. Everyone dismisses claims data. Inova has over-invested in EHR data that hasn’t yet generated savings. Claims data will help generate savings. Measuring quality, EHR yes, but a lot can be done through claims, if they’d just use the G-codes. And ACOs today are the price-takers from the payers and plans; they really should be the price-makers. And say, it’s going to cost $300 PMPM [per member per month] and not say, I’m going to take a percentage of premium, because percentage of premium could be a very arbitrary number.”



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