Incentives for P4P 1/7/2009. AAPC Audio Seminar January 7, P4P (Pay for Performance) and the Private Payer: Apples to Oranges

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1 AAPC Audio Seminar January 7, 2009 P4P (Pay for Performance) and the Private Payer: Apples to Oranges Michael Stearns, MD, CPC President and CEO e MDs, Inc. Incentives for P4P Institute of Medicine Recommendations (as early as 2001) Provide incentives that align profitability of hospitals, clinics, pharmacies, insurance companies, and manufacturers with patient safety goals Referred to as Pay for Performance Existing Reimbursement Systems Over 100 P4P Programs underway Do not reflect the relative monetary value of adherence to quality metrics and coordination of care. Instead reward poor performance or high volume performance Medicare Programs State Programs Private Sector Programs (focus of today s discussion) Incentives for P4P The annual cost of care for a Medicare beneficiary in Hawaii, one of the highest quality states, was around $4000 The cost of care for an average Medicare beneficiary in Louisiana was $8000 and this was the state where the lowest quality of care was measured. Higher cost does not equal better care Payers and industry are frustrated by rising costs Payers directing patients to physicians who are perceived to be delivering higher quality for lower cost 1

2 P4P Trends Physicians reluctant to embrace P4P as they are concerned over how data is interpreted They do not wish to be ranked like a consumer product People outside of healthcare, h however, want detailed d information on the provider performance Physicians are being increasingly profiled on the Internet, often by systems they have no ability to influence What is Pay for Performance? Physician reimbursement traditionally tied to volume rather that quality of care provided Goal is improve patient care by rewarding physicians who provide the highest level of care Also known as "P4P" this payment model dl rewards healthcare providers for meeting certain performance measures for quality and efficiency. Disincentives, es,such as eliminating payments for negative consequences of care (medical errors) or increased costs, have also been proposed. Requires a great deal of structure Criteria (e.g., Guidelines) Reporting Structured data (i.e., codified data) Technology(e.g., Electronic Health Records) AMA P4P Principles 1. Ensure quality of care Prevent bias towards certain patient populations 2. Foster the patient/physician relationship Prevent any barriers that could form 3. Offer voluntary physician participation Do not undermine the economic viability of non participating physician practices Minimize potential financial and technological barriers including costs of startup. 4. Use accurate data and fair reporting Use accurate data and scientifically valid analytical methods Physician involvement and appeals process 5. Provide fair and equitable program incentives Provide new funds for positive incentives to physicians for their participation, progressive quality improvement, or attainment of goals within the program These programs support the goal of quality improvement across all participating physicians. 2

3 P4P in the United Kingdom The National Health Service (NHS) 2004: launched major pay for performance initiative Quality and Outcomes Framework (QOF). General practitioners: Agreed to increases in existing income according to performance with respect to 146 quality indicators Covering clinical care for 10 chronic diseases, organization of care, and patient experience. Funding for primary care was increased 20% over previous levels Allowed practices to invest in extra staff and technology; 90% of general practitioners use electronic prescribing Up to 50% use electronic health records for the majority of clinical care Results Data showed that substantially increasing physicians pay based on their success in meeting quality performance measures is effective. 8,000 family practitioners included in the study earned an average of $40,000 more by collecting nearly 97% of the points available. [17] Medicare Programs PQRI PQRI(Physician Quality Reporting Initiative) Meet limited quality reporting requirements 1.5% over Medicare reimbursement in % in 2009 Permanent program Best suited for larger organization with health information technology resources 3

4 PQRI Program Federal law enacted in December 2006 established PQRI PQRI pays physicians 1.5% bonus for reporting quality measures July 1 December 31, 2008 Increased to 2.0% in 2009 Select up to three measures applicable to practice from a list of 74 and report on 80% of eligible encounters for each measure selected (e.g., internists generally have to report three measures) Increased to 119 measures in 2008 and growing Inpatient and outpatient measures Report against measures on standard CMS claim form CMS determines who reported successfully and pays bonus and provides reporting/performance score feedback 3 PQRI Medicare Improvements and Patients and Providers Act (MIPPA) For 2009 and 2010 Incentive payments increased to 2.0% CMS will post list of providers on website who participated in PQRI satisfactorily Claims based reporting CPT Category II (or temporary G codes where CPT Category II codes are not yet available) In general, three or more measures are chosen for reporting At least tthree of the measures must be reported tdfor at least t80% of the cases in i which h a measure was reported In 2009 there are two reporting periods January 1, 2009 December 31, 2009 July 1, 2009 December 31, 2009 The 2009 PQRI consists of 153 quality measures and 7 measures groups In 2007, 56,722 (52 percent of participants) earned an incentive payment (met criteria of satisfactory reporting by reporting data on 1 3 applicable measures for 80 percent of applicable cases); 48% did not receive payment as they did not report correctly e Prescribing Medicare Improvements and Patients and Providers Act (MIPPA) for 2009 and 2010 Incentive payments to eligible professionals who are successful electronic prescribers using certified systems 2% incentive payment 2009 and % incentive payment in 2011 and 2012 ½% incentive payment in 2013 Beginning in 2012 eligible providers who are not successful electronic prescribers will receive reduction in payment 4

5 Medicare Hospital Demonstration Programs Hospital Quality Initiative 10 quality measures linked to payments Based on discharge 98.7% of hospitals eligible to participate are complying Premier Hospital Quality Incentive Demonstration 300 hospitals/34 quality measures related to 5 conditions Scores will be posted Hospital scoring in the top 10% on the performance measure will get a 2% bonus on top of DRG charges, those in the top 10 20% will get a 1% bonus In third year those who do meet a predetermined threshold score will face a penalty Physician Group Practice Demonstration First Medicare P4P program (launched in 2005) In third year, extended to fourth 5,000 clinicians in 10 large groups Physician groups can earn up to 80% of Medicare savings However, only 4/10 met requirements (earned $13.8 million) Mixed results regarding overall cost and reimbursement Scheduled to end March 31, 2009 The First Evaluation Report to Congress in 2006 showed: that the model rewarded high quality, efficient provision of health care however, the lack of up front payment for the investment in new systems of case management "have made for an uncertain future with respect for any payments under the demonstration." Medicare Care Management Performance Demonstration Project Modeled on Bridges to Excellence Program Small and medium practices 3 year project intended to encourage adoption of health information technology Will run from Reimbursement rates of up to $10,000/year per physician or $50,000 per practice/year 26 quality measures for diabetes, CHF, CAD 5

6 Medicare Health Care Quality Demonstration Project Start in year program Enrollment closed Test effectiveness of different methodologies to improve quality and reduce cost Similar design to the Physician Group Practice Demonstration Project CMS Care Management for High Cost Beneficiaries Demonstration Six organizations selected Test ability of direct care provider models Coordinate care for high cost, high risk beneficiaries Provide clinical support beyond traditional settings to manage their conditions. 3 year program Launched in October 2005 Results pending California Pay for Performance Program Response to public backlash to managed care in the 1990s California health care plans and physician groups developed a set of quality performance measures and public "report cards", emerging in Now the largest pay for performance program in the country Financial incentives based on utilization management were changed to those based on quality measures Provider participation is voluntary Physician organizations are accountable though public scorecards Financial incentives provided by participating health plans based on their performance. 6

7 Current Level of P4P Activity in HMOs Approximately one third of the physician oriented incentive programs were designed to reward only the top rated physicians or groups In addition, 62.0% offered rewards for the attainment of a predetermined performance threshold, and 20.4% explicitly rewarded improvement (14.3% offered rewards for both attainment and improvement; data not shown). Representative national sample document that 52.1% of health plans representing 81.3% of persons enrolled in HMOs used such programs in 2005 Uncommon in independent physician practice settings History of Private Sector P4P In 2002, the Robert Wood Johnson Foundation, California HealthCare Foundation and the Commonwealth Fund sponsored 7 Rewarding Results projects This group designed, implemented and evaluated several foundational private sector P4P programs 7

8 Blue Cross Blue Shield of Michigan (BCBSM) DRG payment increases to 86 acute care facilities 4% DRG increase for scoring at or above threshold standards Used JCAHO measures, medication safety, community health project, and efficient utilization as metrics Bridges to Excellence Program A group of employers, physicians, health plans and patients have come together to create Bridges to Excellence. Guided by three principles, its purpose is to create programs that will realign everyone's incentives around higher quality Based on six key attributes identified by IOM around which the health care system should be redesigned (called STEEEP ): Dedication to transforming care processes to reduce mistakes will require investments, for which purchasers should create incentives Safe Timely Significant reductions in defects (misuse, underuse, overuse) will reduce the waste and inefficiencies in the health care system today Effective Efficient Increased accountability and quality improvements will be encouraged by the release of comparative provider performance data, delivered to consumers in a compelling way Equitable Patient centered Bridges to Excellence Program 4 regions in U.S. involved in test Met requirements for: Diabetic Care Link program Cardiac Care Link program Physician Office Link program Based on NCQA measures Bonuses linked to innovative use of health information technology Bonuses also tied to savings to employers 8

9 Bridges to Excellence Program: Physician Office Link P4P program for physician offices A report card for each physician office describes its performance on the program measures and is made available to the public Office practice sites can earn up to $50 for each patient covered by a participating ii i health h plan and/or employer. Three methods of qualifying for the BTE Office Link Program: 1. Practices that qualify for NCQA s Physician Practice Connections (PPC) assessment program will be recognized by BTE for the Physician Office Link (POL) program at the corresponding level 2. Having a CCHIT certified EHR 3. QIO Office System Survey Bridges to Excellence Program: Physician Office Link and The Patient Centered Medical Home Physician Practice Connections Patient Centered Medical Home (PPC PCMH ). Three tiers of recognition tied to level of reimbursement Level I: Use of evidence based standards of care Maintenance of patient registries for the purpose of identifying and following up with at risk patients Provision of educational resources to patients. Level II: Use of electronic systems to maintain patient records, provide decision support, enter orders for prescriptions and lab tests and provide patient reminders. Level III: Electronic systems that interconnect and are interoperable with other systems Use of nationally accepted medical code sets Ability to automatically send, receive and integrate data such as lab results and medical histories from other organizations systems. BTE Programs: Diabetes Care Link Physicians may achieve two year recognition for high performance in diabetes care Suite of products and tools provided dto patients Physicians can earn up to $ additional per patient List publically as a recognized provider 9

10 BTE Programs: Cardiac Care Link (CCL) Physicians may achieve two year recognition for high performance in cardiac care Suite of products and tools provided to patients Listed publically as a recognized provider BTE Programs: Spine Care Link Physicians may achieve two year recognition for high performance in spine care Suite of patient oriented products and tools provided Listed publically as a recognized provider BTE Programs: Depression Care Management Link Physicians may achieve to achieve two year recognition for high performance in depression care management Based upon the principles of the evidencebased collaborative care model (called the DIAMOND project) for depression care in Minnesota 10

11 Integrated Healthcare Association Measure included clinical quality (50 percent), patient satisfaction (30 percent) and information technology investment (20 percent) for physician groups. Financial incentive payments were paid from seven health plans to contracted groups in accordance with individually designated and independently operated health plan P4P programs. The Center for Health Care Strategies (CHCS) Local Initiative Rewarding Results Seven Medicaid health plans in California sought to improve pediatric care Capitated provider groups Financial Incentives: Performance based risk pool distributions Tiered capitation increases Bonus payments for guideline adherence Specific dollar amount paid to providers per child that met the measure(s) Massachusetts Health Quality Partners (MHQP) Statewide data infrastructure Enabled six major health plans to aggregate HEDIS (Healthcare Effectiveness Data and Information Set) clinical effectiveness measures across health plans at the physician, group and integrated delivery system levels Aggregated profiles were used to create a new program of performance feedback and public release of comparable, trended quality performance information 11

12 Rochester Independent Practice Association (RIPA) and Excellus Health Plan Collaboration between these two groups Formed a physician reimbursement program Based on locally developed care quality guidelines for: chronic conditions cost efficiency measures patient satisfaction Patient Centered Medical Home A practice that scores over CMS thresholds in: Continuity of care Clinical information systems Delivery system design Decision support Patient/family engagement Coordination of care across providers and settings Improved access to care 12

13 Two Tiers of CMS Medical Homes Tier 1: Basic medical home services, basic care management fee Tier 2: Advanced medical home services, full care management fee Tier I Requirements 17 required capabilities, for example: Discuss with patients the role of the medical home Establish Etblih written standards d for patient t access Use data to identify/track patients Use integrated care plan Provide patient education/support Track tests/referrals Tier II Requirements Tier I requirements met Use electronic health record (EHR), certified by the Certification Commission on Health Information Technology (CCHIT), to capture clinical i l information Have systematic approach to coordinate facility based and outpatient care Review post hospitalization medication lists 3 of 9 additional capabilities (for example, use e prescribing, collect performance measures, etc.) 13

14 Medical Home Reimbursement Care management fee based on RUC work RVUs, practice expenses, and insurance In addition to activities already reimbursed by Medicare Risk adjusted, based on hierarchical condition categories (HCC) score of the patient Care Management Fees (Medical Home Model) Per Member Per Month Payments HCC Score <1.6 HCC Score 1.6 Tier 1 $27.12 Tier 2 $80.25 Tier 1 $35.48 Tier 2 $

15 The Leapfrog Group Group of large public and private sector employers came together in 1998 to evaluate the quality and cost effectiveness of healthcare for their employees. Group felt that progress could be made by rewarding hospitals for providing high quality care through pay for performance and through recognition Has become consortium of major companies and other large private and public healthcare purchasers that provide health benefits to more than 37 million Americans in all 50 states. 4 Leapfrog Practices (i.e., Leaps ) Computer Physician Order Entry (CPOE) which has been shown to reduce serious prescribing errors in hospitals by more than 50%. Evidence Based Hospital Referral (EHR): High risk surgeries and patients with severe medical conditions should be cared for in hospitals with extensive experience. An estimated 40% reduction in mortality would result ICU Physician Staffing (IPS): Staffing ICUs with intensivists could also reduce mortality by 40%. Leapfrog Safe Practices Score: 30 Safe Practices are recommend by the National Quality Forum including the three above. A remaining 27 NQF safe practices assessment are used to evaluate hospitals. American College of Surgeons National Surgical Quality Improvement Program (ACS NSQIP) Surgical quality initiative Join program for a fee Inpatient and outpatient procedures Likely to be tied to P4P Nearly 100 Hospitals enrolled in the program to date Stated goals: Promote accountability to public sector Allow for improved data capture and fair utilization Change from payer data to risk adjusted data to determine quality of care provided Allow for accurate Internet profiling of physicians and medical centers 15

16 American College of Surgeons National Surgical Quality Improvement Program (ACS NSQIP) Reduce postoperative mortality rates Reduce postoperative morbidity rates Reduce the median length ofstay Leverage data for other internal and public reporting initiatives Meet CMS Surgical Care Improvement Program (SCIP) reporting requirements by collecting SCIP data through the ACS NSQIP SCIP data collection module It may also: Potentially allow for higher reimbursement in the emerging pay for performance environment Help to increase patient satisfaction Serve as a foundation and resource for research initiatives Help to identify possible under billings Help to increase negotiating leverage with third party payers and employers P4P Challenges Most public and private healthcare stakeholder organizations support incentive programs to increase the quality of health care However, concern exists over the validity of quality indicators, patient and physician autonomy and privacy, and increased administrative burdens Early studies showed little gain in quality for the money spent Unintended consequences like the avoidance of high risk patients can also emerge P4P Challenges: Physician Acceptance Concern has been expressed that P4P is an excuse to reduce physician reimbursement Goal of CMS is to reduce traditional physician fees and replace this income with P4P revenue. (In particular E&M services) Experience in the United Kingdom states that patient care has improved and physician reimbursement has increased U.S. physicians are reluctant to adopt P4P without a proven U.S. model that demonstrates ROI 16

17 P4P Challenge: Technology Many P4P programs (e.g., Medical Home) require electronic health records (EHRs) to attain maximum reimbursement Not cost effective to capture needed clinical data manually Automated alerts and reminders guide adherence to guidelines e Prescribing reduces medication errors Low adoption rate of EHRs has impaired further use of P4P Several efforts underway to increase EHR adoption P4P Challenges: Claims Data Limitations Commonly used administrative measures include a requirement that a patient have two visits with an encounter diagnosis of interest Unfortunately, the requirement may disqualify a significant number of patients who have thedisease In one study this requirement excluded d 25% of patient t with diabetes as it was not the primary reason for the visit so it was not entered on the claim EHRs maintain problem lists that would identify conditions independent of the visit reason coding. P4P Challenge: Structured Data Capture ICD not specific enough for accurate clinical data capture Accurate data capture and reporting requires A more granular terminology A standard code set that would allow clinical data to be shared across multiple enterprises Standard efforts underway HITSP (Health Information Technology Standards Panel SNOMED CT a leading code set under consideration 17

18 SNOMED CT 315,000 Concepts 806,000 Synonyms 945,000 logically defined relationships Meets approved federal standards Required in electronic health records in 2008 (for certification) Organism names only More will be required in future years SNOMED CT Information will be capture in electronic health records as SNOMED CT codes Mapping tables will allow for the SNOMED CT concept code to match the closest ICD 9 CM CM or ICD 10 CM code The accuracy of these maps for claims submission has not been validated Human intervention will be required Conclusions of Rewarding Results Trial Programs P4P more than mechanism to reward performance Opportunity to redesign and transform the healthcare system Stakeholders must be involved in the design and implementation if P4P programs are to be successful 18

19 Conclusions of Rewarding Results Trial Programs Medicare as the major payer should provide incentives to increase EHR adoption Dt Data collection to measure clinical i l performance is lacking as most data collected is for claims and does not represent clinical care Quality Improvement Organizations (QIOs) can support P4P programs for smaller practices Reimbursement needs to be meaningful to physicians Role of Coding Professionals Play a leading role in quality measure reporting Set up and manage PQRI programs Facilitate accurate capture and reporting of codified data dt (e.g., in SNOMED and other terminologies) i Validate mappings from new terminologies (e.g., SNOMED CT) to ICD, CPT and HCPCS for billing purposes Role of CPCs Verify integrity of shared data between facilities Evaluate P4P programs and make providers aware of their potential Provide feedback to providers that will help them meet quality measures Audit P4P programs to validate accuracy of reporting Assist in the collection of codified data for research purposes Play a role in making sure that reporting is fair and reasonable to all parties 19

20 For Questions Please see Contact Information Below Thank You Contact Information: Michael Stearns, MD, CPC President and CEO e MDs, Inc Spectrum Drive Austin, Texas mstearns@e mds.com mds.com 20