Overview of the Patient Centered Medical Home

(PCMH)

Neil Kirschner, Ph.DSenior Associate, Regulatory and Insurer Affairs

Division of Government Affairs & Public PolicyAmerican College of Physicians

Email: nkirschner@acponline.orgPhone: 202-261-4535

Presentation to the Maryland ChapterAmerican College of Physicians

November 20, 2008

Need for a New Healthcare Delivery Model

Increasing costs

Healthcare costs are growing faster than the economy and

the cost of care is becoming difficult for employers,

government and individuals to meet.

Need to improve quality

Patients receiving recommended treatment 55 % of the time

Poor U.S. performance on healthcare benchmarks

compared to other developed countries despite spending

more.

Regional variation

Healthcare cost and quality vary substantially among

geographic regions. Little relationship between cost and

quality.

Need for a New Healthcare Delivery Model

Inadequate response to chronic care needs

Increasingly aging and chronically ill population with payment

system that doesn’t recognize services found necessary for

essential care e.g. care coordination, evidence-based

population management, disease self management

Decreased Interest in Primary Care

The number of new students entering into primary care is

decreasing and physicians who have chosen the field are

disproportionately leaving compared to other specialties.

Both domestic and international data indicating that higher

proportion of primary care physicians related to higher

healthcare quality and lower costs.

A Joint Proposed SolutionThe Patient-Centered Medical Home (PCMH)

Modern “medical home” concept originally in Pediatric

literature in the 1960’s—a central source of care for

“Special Needs” children.

AAFP—Future of Family Medicine Project (2004)

“Personal Medical Home”

ACP—Advanced Medical Home (2006)

Key elements of a PCMH are described in a March 2007

joint statement of principles from ACP, AAFP, AAP and

AOA. Often referred to as the “Joint Principles”.

Nexus of patient-centered care, primary care and

chronic care model concepts

The Patient-Centered Medical Home

Redesigns clinical delivery and payment to facilitate Patient-centered, longitudinal, coordinated care

delivered by a “recognized” practice with a personal physician

Who accepts responsibility for the patient’s “whole person”

Who acts in partnership with patients and in collaboration with multidisciplinary teams (nurses, physician specialists, health educators, pharmacists)

Who uses practice level systems to improve access and communication, care integration, patient safety and outcomes

Who accepts accountability for care provided through on-going performance measurement and quality improvement.

Professional Societies Endorsing “Principles”

American Academy of Hospice & Palliative Medicine

American Academy of Neurology American Academy of Pediatrics American Academy of Family Physicians American College of Cardiology* American College of Chest Physicians* American College of Osteopathic Family

Physicians American College of Osteopathic Internists American College of Physicians American Geriatrics Society* American Medical Association

* Denotes CSS membership

American Medical Directors Association American Osteopathic Association American Society of Clinical Oncology American Society of Addiction Medicine Association of Professors of Medicine Association of Program Directors in Internal

Medicine Infectious Diseases Society of America* Clerkship Directors in Internal Medicine Society for Adolescent Medicine* Society of Critical Care Medicine* Society of General Internal Medicine*

Process to Define PCMH Using NCQA’s Physician Practice Connections

AAFP, AAP, ACP and AOA reviewed PPC elements, documentation requirements and scoring methodology for voluntary recognition process

Using consensus-driven process identified standards for PCMH and the associated documentation

Developed scoring methodology that includes “must have” elements and Establishes the “first rung” of the ladder

Practices meeting this standard evidences basic practice systems consistent with PCMH model.

Identifies more sophisticated levels of the PCMH

PCC-PCMH tool available January, 2008

Sections (Points)

PPC 1: Access & Communication (9)

PPC 2: Patient Tracking & Registry Functions (21)

PPC 3: Care Management (20)

PPC 4: Patient Self-Management Support (6)

PPC 5: Electronic Prescribing (8)

PPC 6: Test Tracking (13)

PPC 7: Referral Tracking (4)

PPC 8: Performance Reporting & Improvement (15)

PPC 9: Advanced Electronic Communication (4)

TOTAL POINTS: 100

Physician Practice Connections – PCMH Levels

Level 1: 25-49 Points; 5/10 Must Pass

Level 2: 50-74 Points; 10/10 Must Pass

Level 3: 75+ Points; 10/10 Must Pass

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Model Clarifications

PCMH model is NOT a gatekeeper model

Pt can see any physician, specialist/subspecialist

allowed by plan…..does not require approval by PCMH

practice

Nature of the model encourages closer ties to PCMH to

help meet pt’s medical needs/preferences and help pt

navigate complex health care system .

PCMH model is NOT specialty specific

Model is most consistent with primary care practices

There are patient subgroups where

specialty/subspecialty practice would be more

appropriate PCMH.

ACP and Others Recommend Supporting PCMH with Hybrid Payment Model

Three-component payment model that consists of: Per patient, per month (PMPM) care coordination

payment that accounts for The physician and non-physician clinical staff

work required to manage care outside a face-to-face visit

The practice system redesign and technology acquisition Prospective Risk adjusted Laddered

Continued per visit fee-for-service (FFS) payment Performance based component based on evidence-

based quality measure reporting and patient satisfaction

Patient-Centered Primary Care Collaborative

Articles in NEJM, Health Affairs, Annals of Internal Medicine, Trade & Lay Press

Legislation

Medicaid transformation

Multi-payer/multi-player commercial plans

Expanding Interest in the PCMH

Patient Centered Primary Care Collaborative (PCPCC)

Announced May 10, 2007

Coalition of over 250 major employers, consumer groups, professional societies, and other stakeholders

Recognizes the PCMH and need for supporting a better compensation model

http://www.pcpcc.net

Endorsers of the PCPCC*

AARP AAFP AAP ACP AHQA Aetna AOA Aurum Dx Blue Cross Blue Shield Association Bridges to Excellence The Center for Excellence in Primary Care The Center for Health Value Innovation Cigna CVS Caremark Disease Management Association of America eHealth Initiative The ERISA Industry Committee Exelon Corp Foundation for Informed Medical Decision

Making

*Not all current members are included on this list.

General Motors Health Dialogue Humana HR Policy Association IBM McKesson Corporation NACHC Nat’l Business Group on Health Nat’l Business Coalition on Health Nat’l Coalition on Health Care NCQA National Retail Foundation Pacific Group on Health Partners in Care The Roger C. Lipitz Center for Integrated Health

Care, Johns Hopkins Service Employers International Union UnitedHealth Walgreens Health Initiatives Wellpoint Wyeth Xerox

PCPCC Summary of Demonstration Projects

Medicare Medical Home Demonstration(TRHCA 2006)

Brief project description

Focus on beneficiaries with multiple chronic conditions

Includes variety of practice settings in up to eight states

to be announced by 12/08 — 50 practices per region.

2009 - practices selected and qualify for recognition

status

2010 to 2012 – demon. project implemented

Payment model

Personal physician receives care management payment

Physician still receives FFS payments

Practices receive 80% of “reductions in expenditures

(above 2%) ..that are attributable to the medical home”

(minus care coordination fees paid)

MMHD Care Management Fee

Per Member per Month Payments

HCC Score <1.6 HCC Score >1.6 Blended Rate

Tier 1 $27.12 $80.25 $40.40

Tier 2 $35.48 $100.35 $51.70

HCC score indicates disease burden

Estimate that 25% of beneficiaries with HCC > or =1.6 and Medicare costs at least 60% higher than average

First 2% of savings not shared

80% of savings above 2% (minus fees) shared with practices

State Medicaid Innovation

As of Nov, 2008…31 states engaged in efforts to advance medical homes for Medicaid or SCHIP program participants

Source: National Academy of State Health Policy (NASHP)

Map of Private Payer PCMH Demonstration Projects

Challenge: What Does it Co$t? Varying Assumptions… “apples to oranges” comparisons

• Future of Family Medicine 2004: Transition costs of $23,000 - $90,000 per physician*

−$15 PMPM for patients with chronic conditions

• Michael Bailit—review of PCMH estimates $3.00 - $9.00 pmpm**

Deloitte Analysis***

• Initial investment of $100,000/FTE

• On-going expenses of $150,000/FTE*http://www.annfammed.org/cgi/reprint/2/suppl_3/s1 ** mbailit@bailit-health.com***Deloitte: The Medical Home, Disruptive Innovation for a New Primary Care Model

Accessed at: http://www.deloitte.com/dtt/cda/doc/content/us_chs_MedicalHome_w.pdf

Challenge: What Does it Co$t? Ambulatory ICU: $40-50 PMPM for primary care – but

assumes more complex patients*

AMA RUC Evaluation for Medicare Medical Home Demonstration **

• Tier 1 $25 pmpm Tier 2 $35 pmpm Tier 3 $50 pmpm

ACP/Commonwealth “Costing the Medical Home Study” – Report Fall 2008

• Assess the incremental cost of building the medical home based on NCQA PPC-PCMH framework

* Mathematica—Medicare Medical Home design paper

** http://www.ama-assn.org/ama/pub/category/18531.html

Financing PCMH Services

International & U.S. data demonstrate relationship between primary care and improved outcomes/reduced cost

Each 1% increase in primary care associated with decrease of 503 admissions, 2968 ED visits, 512 surgeries*

Medicare Beneficiaries assigned to Medical Homes—estimated saving $194 billion over 10 years.**

*Kravet, S et al: Health Care Utilization and the Proportion of Primary Care Physicians. Amer J of Medicine, 2008; 121:142-148.

** Schoen et.al Bending the Curve. Commonwealth Fund 2007

Financing PCMH Services

North Carolina Community Care Program

• Savings FY 2005 $ 77-85 million

• Savings FY 2006 $ 154-170 million

http://www.pcpcc.net/content/north-carolina-community-care-press-release

Financing PCMH Services

Primary Sources of Savings

• Reduced unnecessary hospitalizations

• Reduced hospital readmissions

• Reduced unnecessary ER use

• Decreased unnecessary specialty referrals

• Increased efficiency in laboratory and diagnostic test expenditures

• Increased efficiency in drug expenditures

Update of CSS PCMH Activities

Develop details regarding the relationship between the PCMH and subspecialty practices in the following areas:

• Referral issues,

• Designation/transition issues,

• Issues related to situations in which the subspecialty practice provides most of the care coordination

• Information flow issues

• responsibility issues.

http://www.acponline.org/running_practice/pcmh/