Statement Attributable to:

Marci Nielsen, PhD, MPH
Chief Executive Officer, Patient Centered Primary Care Collaborative

Health Affairs recently released a study entitled, Patient-Centered Medical Home Initiative Produced Modest Economic Results For Veterans Health Administration, 2010–12, authored by Paul Hebert and colleagues from the Veterans Affairs (VA) Health Services Research and Development Center for Veteran-Centered, Value-Driven Health and the University of Washington School of Public Health.  

The abstract is provided here:

Abstract: In 2010 the Veterans Health Administration (VHA) began a nationwide initiative called Patient Aligned Care Teams (PACT) that reorganized care at all VHA primary care clinics in accordance with the patient-centered medical home model. We analyzed data for fiscal years 2003–12 to assess how trends in health care use and costs changed after the implementation of PACT. We found that PACT was associated with modest increases in primary care visits and with modest decreases in both hospitalizations for ambulatory care–sensitive conditions and outpatient visits with mental health specialists. We estimated that these changes avoided $596 million in costs, compared to the investment in PACT of $774 million, for a potential net loss of $178 million in the study period. Although PACT has not generated a positive return, it is still maturing, and trends in costs and use are favorable. Adopting patient-centered care does not appear to have been a major financial risk for the VHA.

Although some media reports are focused on the early findings that a positive financial return has not yet been achieved, the PCPCC is encouraged at the authors’ conclusion that trends are moving in the right direction.  Specifying that most of the investment thus far has focused on hiring and training health professionals, the authors acknowledge that this  study examines the short term impact of the PACT program.

• “After two and a half years, the PACT initiative appears to have had a modest effect on three categories of utilization within the VHA: Hospitalizations for ambulatory care-sensitive conditions and specialty mental health visits decreased slightly, while outpatient primary care visits by patients ages sixty-five and older increased slightly.”
• “The VHA is a very large and complex system in which large-scale change requires prolonged effort. Implementation of PACT was still progressing during our study period, and a more conclusive analysis must await the initiative’s full implementation. Studies are currently under way to determine whether the utilization changes in the post-PACT period are correlated with degrees of implementation at the facility level. Our analysis also does not account for any long-term cost implications of improvements in population health, such as diabetes control, that have been found in other studies of patient-centered medical homes.”
• ”Our analysis suggests that the PACT initiative has not yielded a positive return on investment. However, the initiative was still in its formative stages during our study period, and trends in use and costs appear to be in a favorable direction. This suggests that an organization’s decision to adopt the patient-centered medical home model should be based not upon unrealistic expectations of substantial cost savings but upon expected benefits, such as improved quality of care and high satisfaction with care. Over time, however, there may well be incremental savings.”
• “The discounted investment in PACT through FY 2012 was $774 million. The investment was overwhelmingly in hiring new personnel to staff the primary care teams. In addition, approximately $23 million was spent on training.”

Even in the short time period examined after implementation of PACT, the PCPCC notes that three important outcomes were statistically significant, using a sound methodological approach to the analysis.

• Outpatient visits with mental health specialists decreased significantly (7.3 percent)  
  • “These savings may have been facilitated by the initiative to integrate primary care and mental health.  When mental health care was made more accessible within primary care, the need for PACT teams to refer patients for specialty mental health care may have been reduced. Because the integration initiative predated the PACT initiative, the savings that were related to mental health care may augur well for the future: Additional savings may be realized if, as planned, other components of PACT become equally well integrated into primary care.”
• Primary care visits increased significantly among patients ages sixty-five and older ( 1.0 percent)
  • “This utilization increase may reflect PACT’s focus on population health management. For example, PACT nurse care managers engage in telephone counseling of patients with complex chronic conditions.”
• Hospitalizations for ambulatory care–sensitive conditions among all patients (4.2 percent)
  • “The fact that we detected the effect in the younger cohort is important because this is the age group and category of utilization in which we would most expect to see a beneficial effect of PACT if one existed.”

Not all outcomes measures, however, resulted in statistically significant findings and there were some limitations in the study. Authors noted that they may not have had enough data to find differences in some of the outcomes, specifically, emergency department and urgent care clinic use – both important utilization measures that other PCMH studies have been found to impact.

• “Previous studies have observed reductions in visits to the ED and urgent care clinics after the implementation of a patient-centered medical home, but we did not observe this effect within the VHA. This is likely because of the unique characteristics of VHA emergency care, which is provided at only 111 of the 908 VHA sites of care included in our study.”
• “Many VHA patients use non-VHA emergency care that is paid for by the VHA. However, claims for these non-VHA visits through FY 2012 are incomplete, so they could not be included in our analysis.”
• “Only thirty-seven facilities with an ED (out of the 111 facilities that had an ED at some time during the study period) had sufficient data to contribute to our models.”

Finally, even with the positive trends noted above, the PCPCC recognizes that the population studied may not be generalizable to general public, given that patients receiving care at community VA clinics are mostly male, white, and older.  Additionally,  the authors  found wide variation by clinic.

• “For the five million patients enrolled in primary care at the beginning of PACT, patients’ mean age was 63.5 years, 72.4 percent of patients were white, and 93.6 percent were male.”
• “There was substantial heterogeneity in utilization trends across VHA clinics. Some facilities may be yielding a higher return on investment than others. Ongoing studies are addressing the extent to which the degrees of PACT implementation at the facility level are correlated with changes in utilization.”

Access original study here.

February 20, 2014

Dear Speaker Boehner, Majority Leader Reid, Minority Leader McConnell, and Minority Leader Pelosi:

The Patient-Centered Primary Care Collaborative (PCPCC), commends the Senate Finance, House Ways and Means, and Energy and Commerce Committees on their bipartisan agreement to repeal the Sustainable Growth Rate (SGR) and replace it with a reimbursement model that moves the U.S. health care delivery system away from the current volume-based payment system to one that rewards quality, efficiency, and innovation.  

Representing more than 1,000 medical home stakeholders and supporters throughout the U.S., including clinicians, employers, consumer groups, hospitals, health plans, and various health care industries, the PCPCC is dedicated to advancing an effective and efficient health system built on a strong foundation of primary care and the patient-centered medical home (PCMH).  

The PCPCC strongly supports the bipartisan and bicameral “SGR Repeal and Medicare Provider Payment Modernization Act of 2014,” and is particularly pleased with the agreement’s recognition of the PCMH as an alternative payment model to provide high value cost-effective care for Medicare beneficiaries.  The PCPCC commend the agreement for including the following elements:

Repealing the flawed SGR and replacing it with a payment system focused on quality, value, and accountability.

• Improving the existing fee-for-service system by focusing on rewarding value over volume and ensuring payment accuracy. We especially are pleased that the new Medicare Incentive Program would credit certified PCMHs with the highest possible score for clinical practice improvement activities.
• Incentivizing physicians to move toward alternative payment models (APMs).
• Providing a 5 percent bonus to providers who receive a significant portion of their revenue from an APM or PCMH.
• Establishing a Technical Advisory Committee (TAC) to review and recommend physician-developed APMs based on criteria developed through an open comment process.
• Consolidating the three existing quality programs (Physician Quality Reporting System, Value-Based Payment Modifier, and meaningful use of electronic health records) into a streamlined and improved quality measurement program that rewards providers who meet performance thresholds. This will improve care for seniors and provide certainty for providers.
• Incentivizing care coordination efforts for patients with chronic care needs, including authorizing payment in 2015 for chronic care management services provided by certified PCMHs.
• Introducing physician-developed clinical care guidelines to reduce inappropriate care that can harm patients and results in wasteful spending.
• Requiring development of quality measures and ensures close collaboration with physicians and other stakeholders regarding the measures used in the performance program.

As outlined in the January 2014 PCPCC report, The Patient-Centered Medical Home’s Impact on Cost & Quality: An Annual Update of the Evidence, 2012-2013,using the PCMH as a supportive framework for alternative value-based payment models makes economic sense.  The review of 20 recent academic and industry studies demonstrates that when primary care practices embrace the team-based and person-centered PCMH model of care, they see impressive improvements across a broad range of categories, including: cost, utilization, population health, prevention, access to care, and patient satisfaction.

We support swift action on “The SGR Repeal and Medicare Provider Payment Modernization Act of 2014” and encourage the Committees to continue working together in a bipartisan and bicameral fashion to pass this landmark legislation into law as soon as possible.  Should you have any questions, please contact Marci Nielsen, Chief Executive Officer at the PCPCC, either by email at mnielsen@pcpcc.net or by phone at (202) 417-2074.

Sincerely, 

Marci Nielsen 

Chief Executive Officer 

PCPCC

Statement Attributable to:

Marci Nielsen, PhD, MPH
Chief Executive Officer, Patient Centered Primary Care Collaborative

Dear Members of the Senate Finance/House Ways and Means Committee:

As a large and diverse stakeholder group, we thank you for this opportunity to comment on the bipartisan, bicameral legislative “discussion draft” proposal that seeks to repeal the Medicare Sustainable Growth Rate (SGR) and move the US health care delivery system away from the current volume-based payment system to one that rewards quality, efficiency, and innovation.  We applaud the work of the Committees and support your efforts to enhance the value of primary care through physician incentives that support patient-centered medical home (PCMH) transformation.

Representing more than 1,000 medical home stakeholders and supporters throughout the U.S., including providers, hospitals, health plans, employers, health IT, consulting, and pharmaceutical firms, the PCPCC is dedicated to advancing an effective and efficient health system built on a strong foundation of primary care and the PCMH. The PCPCC achieves its mission through the work of our five Stakeholder Centers, led by experts and thought leaders who are dedicated to transforming the U.S. health care system through delivery reform, payment reform, patient engagement, and employee benefit redesign.

The proposal contains a number of important provisions that better align Medicare payments with physicians’ performance on practice process improvements, quality, efficiency and effectiveness measures. The PCPCC has long supported an incremental approach to payment reform that transitions from fee-for-service (FFS) to new payment methodologies that encourage value and quality of care, over volume of tests and procedures.  Accordingly, the PCPCC applauds the Committees’ proposal for making significant strides towards rewarding physicians, nurse practitioners, and physician assistants with incentives to become PCMHs – providing both higher pay through performance bonuses as well as payment for chronic care management – which ultimately translates to improved care and better outcomes for patients and their families.  Those participating in a PCMH, ACO, or other alternative payment model will have pathways and opportunities to earn higher pay that is aligned with the value of care that they provide.

Recommendations and Comments

The PCPCC’s comments are focused on three sections of the proposal: the Clinical Practice Improvement Activities section – which is one of the assessment categories under the new Value-Based Performance Payment Program (Section II); Encouraging Care Coordination for Individuals with Complex Chronic Care Needs (Section IV), and Encouraging Alternative Payment Model Participation (Section III).  We conclude our comments with a summary of the growing body of evidence from patient-centered medical home initiatives across the US, highlighting cost, quality, and health outcome metrics from both the academic peer-reviewed literature as well as from industry reports.

Value-based Performance Payment Program (Section II)

The new Value Based Performance Payment Program (VBP) combines three existing reporting and incentive programs – the Medicare Physician Quality Reporting System (PQRS), the Value-Based Modifier, and Meaningful Use – into a single budget neutral incentive payment program, beginning in 2017.  This new program would assess eligible health professionals’ performance in the following categories: quality, resource use, clinical performance improvement activities (highlighted below), and Electronic Health Record (EHR) meaningful use. Health professionals would then be assessed and receive payment adjustments based on a composite score that encompasses all of the applicable categories and measures, as outlined in the discussion draft. Funding for the payment adjustments would come from the existing penalties for the current reporting programs.

Clinical practice improvement activities, which will prepare professionals to transition to an advanced APM(s), would be established through a collaborative process with professionals and other stakeholders and give special consideration to those practicing in rural areas and Health Professional Shortage Areas (HPSA). Specific activities from which professionals can select would fall under the following sub-categories:

• Expanded practice access, such as same-day appointments for urgent needs and after-hours access to clinician advice;
• Population management, such as tracking individuals to provide timely care interventions;
• Care coordination, such as timely communication of clinical information (e.g., test results) and use of remote monitoring or telehealth;
• Beneficiary engagement, such as establishment of care plans for patients with complex needs and self-management training; and
• Participation in any Medicare APM.

Because many of these criteria are components of a PCMH, a primary care or specialist practicing in one would receive the highest possible score for this category. A professional participating in any Medicare APM would automatically receive half of the highest possible score and could achieve the highest possible score by engaging in additional clinical improvement activities.

The PCPCC strongly supports this language because it creates meaningful incentives for clinicians to adopt the PCMH model of care.  We specifically support the proposal that certified PCMHs be able to qualify for the highest possible score for the clinical improvement component of the new VBP.

We recommend that the "weight" being given for clinical performance improvement activities be increased relative to the other categories, as clinical practice improvement is a prerequisite for achieving gains in quality, meaningful use, and resource use.  
One way, for example, to begin to increase the weight given to clinical performance improvement activities would be to establish a policy that if EHR adoption reaches 75% and the weighting for that performance category drops to 15% (as proposed in the discussion draft), the “freed-up” 10% be added to the clinical practice improvement activities category weighting, thus bringing it up to 25%. As already noted, the clinical practice improvement activities listed in the proposal are all part of the PCMH foundation, and therefore should be given additional weight.
We recommend that the Secretary develop a certification process and standards for PCMHs through a collaborative process with input from a wide range of stakeholders, including clinicians, consumers, accreditation entities, Medicaid agencies, state governments, employers, and private insurers.   Such standards should create multiple pathways for practices to demonstrate that they meet the standards and balance the needs of pediatric and adult populations.

Encouraging Care Coordination for Individuals with Complex Chronic Care Needs (Section IV)

The proposal would establish payment for one or more codes for complex chronic care management services, beginning in 2015. Payments for these codes could be made to professionals (physicians, physician assistants, nurse practitioners, and clinical nurse specialists) practicing in a PCMH or comparable specialty practice certified by an organization recognized by the Secretary who are providing care management services. In order to prevent duplicative payments, only one professional or group practice could receive payment for these services provided to an individual. Payments for these codes would be budget-neutral within the physician fee schedule.

The PCPCC has noted the importance of care management processes that are inadequately reimbursed in a traditional fee-for-service environment, especially as the population ages and those with multiple chronic conditions require additional support from their clinicians and care teams, as well as their families and caregivers. Accordingly, we commend the Committees for encouraging care coordination for individuals with complex chronic care needs by adding payment codes for these services beginning in 2015.  Other recommendations include:

Under this proposal, only one professional or group practice could receive payment for these services provided to an individual. We encourage the Committees to develop a clear and fair methodology for providing the payment to the appropriate provider given that there could be unintended consequences on patient care if providers must “compete” to receive the payment. 

The Comprehensive Primary Care Initiative (CPCI) has implemented criteria for the payment of a care management fee that we feel appropriately recognizes the important role of coordination in the primary care setting.  We encourage the Committees to either adopt this methodology or develop a similar policy.

We recommend that the legislation request that the Secretary work with health professionals organizations to define those services covered by the care coordination codes.
We recognize that as the Secretary implements new codes and payment policies to allow for billing and payment for complex care management for the Medicare population, there also is a need to establish payment policies and codes that address care coordination of children and adolescents under the Medicaid and CHIP programs.

Encouraging Alternative Payment Model Participation (Section III)

Recognizing that practice changes – as well as alignment of incentives across payers – are needed to support successful APM participation, professionals who have a significant share of their revenues in an APM(s) that involves two-sided financial risk and a quality measurement component would receive a five percent bonus each year from 2016-2021. Alternatively, professionals who have a significant share of their revenue in a PCMH model that has been certified as maintaining or improving quality without increasing costs, are also eligible for the bonus.

We commend the Committees for recognizing the valuable role the PCMH has played by allowing professionals in a qualifying PCMH to receive a 5% annual bonus in the years 2016-2021 and we support allowing PCMHs that demonstrate to CMS that they can improve quality without increasing costs, or decreasing costs with decreasing quality, to qualify as an APM -- including the 5% FFS bonus payments -- without having to take direct financial risk (two-sided risk). Other recommendations include:

The 5% annual bonus for qualifying PCMH and other APMs ends in 2021, but the transition to across-the-board 2% updates for all providers in APMs and negative 1% updates for all other providers remaining in fee-for-service, do not begin until 2024. This leaves a two-year gap where it is unclear what payment adjustments, if any, providers will be eligible to receive. If none, providers would be forced to transition to the VBP Program to receive bonuses for those two years, but then switch back to an APM in 2024 to receive the higher 2% payment. In order to avoid a disruptive and counter-productive scenario, we recommend that the Committees continue the 5% annual bonus for qualifying PCMHs and APMs through 2023.

The revenue thresholds necessary to qualify for the PCMH bonus are determined at the end of the year, but providers must determine at the beginning of the year whether to engage in the administrative work and reporting needed to comply with the VBP Program.  Since participation in a qualifying PCMH or APM exempts providers from the VBP Program requirements, we recommend that revenue determination is based on the previous year’s revenue. This will give providers the certainty they need to fully engage in either the VBP Program, or their PCMH.
While qualifying PCMH bonuses begin in 2016, the existing penalties under PQRS, EHR MU, and the VBM do not sunset until the end of that year.  We recommend that early adopters who qualify for the PCMH bonus in 2016 be exempt from reporting requirements and associated penalties for that year.
The proposal includes resources to assist small practices with transformation activities.  We encourage the Committees to increase this allocation from the $50 million included in the proposal and remove the geographic criteria, thus making this available to all small practices regardless of geographic location.  In our opinion, the current funding level is far too low to have any meaningful impact.

In addition, although we are not making specific policy recommendations, we are concerned that the costs of transformation for many primary care practices is prohibitive and recommend that the Committees consider provisions that would provide primary care physicians and their care teams with higher payments during the 10-year budget window as a means to build the primary care workforce and provide a stable revenue source that will facilitate practice transformation. 

Evidence for Primary Care and the Patient Centered Medical Home

As the discussion draft recognizes, the PCMH model provides direct and tangible impacts on quality of care, patient outcomes, and health care costs. Findings from dozens of providers, health systems, health plans, employers and state Medicaid programs have demonstrated up to 70% reductions in emergency room visits, 40% lower hospital readmissions, and hundreds of millions in health care dollars saved.  The magnitude of savings and quality improvements depend on a range of factors, including program design, enrollment, payer, target population, and implementation phase, successful examples of medical home programs include the following:

• Geisinger’s Proven-Health Navigator Model, which serves Medicare patients in rural northeastern and central Pennsylvania, found 71 percent savings over expected costs.
• Evidence from the Genesee Health Plan in Flint, Michigan, indicates that increasing access to primary care services and using health navigators to help patients adopt healthy behaviors and manage chronic diseases reduced enrollee use of emergency department services by 51 percent between 2004 and 2007 and reduced hospital admissions by 15 percent between 2006 and 2007.
• One study found that that WellPoint’s medical home model in New York yielded risk-adjusted total PMPM costs that were 14.5 percent lower for adults and 8.6 percent lower for children enrolled in a medical home.
• Preliminary results from CareFirst Blue Cross Blue Shield’s medical home program showed an estimated 15 percent savings in its first year of operation, before accounting for provider bonuses. Results from the formal evaluation reveal $98 million in total savings over two years.
• Similar levels of savings have been found in medical home models that include a mix of public and private payers For example, UPMC’s multi-state medical home pilot, which includes a mix of commercial, Medicaid, Medicare, and dually eligible patients, showed a net savings of $9.75 PMPM for individuals enrolled in the medical home pilot.

In addition to the successes described above, the PCPCC continues to compile and codify results from medical home initiatives that illustrate effects on the Triple Aim goals. As an appendix to this letter, we highlight outcomes from peer-reviewed journals and industry generated studies.

As Congress addresses the flawed physician payment system in Medicare and moves us toward a payment system that rewards quality, efficiency, and innovation, we support your efforts to create incentives for physicians and their care teams to transform their practices into PCMHs, and enter into risk-sharing practice arrangements such as Accountable Care Organizations. We commend the bipartisan, bicameral process the Committees have embraced to repeal the SGR which has created uncertainty for millions of Medicare providers and beneficiaries for over a decade, and we thank you for the opportunity to share with you our comments.

Statement Attributable to:

Marci Nielsen, PhD, MPH 
Chief Executive Officer
Patient-Centered Primary Care Collaborative 

AUGUST 1, 2013 – (Washington, DC) – On behalf of the Patient-Centered Primary Care Collaborative (PCPCC), we congratulate the Energy and Commerce committee on passage of the Medicare Patient Access and Quality Improvement Act of 2013. The bipartisan legislation, which passed the full committee on a 51-0 vote, repeals the Sustainable Growth Rate (SGR) and replaces it with a fair and stable Medicare physician payment system. It also rewards providers for the quality of care they provide to Medicare beneficiaries and solicits input from expert medical organizations and other stakeholders to develop those quality measures in a transparent and collaborative fashion.

The PCPCC is particularly pleased with the inclusion of language that recognizes the important role of the patient-centered medical home (PCMH) in improving access to continuous, coordinated, and patient-centered primary care for patients with complex chronic diseases. Based on the significant mounting evidence that demonstrates that the medical home has a direct and tangible impact on quality of care, patient outcomes, and health care costs (see PCPCC’s Summary of Medical Home Cost & Quality Results, 2010-2013 for available data), we strongly encourage the full House of Representatives to include the patient-centered medical home as a permanent program under the new Alternative Payment Model. Additionally, we support the inclusion of a diverse marketplace of medical home accreditation programs (e.g. AAAHC, URAC, the Joint Commission, and commercial health plans) in order to ensure that innovation and improvement of the model continues in a competitive marketplace.

The PCPCC congratulates the House Energy and Commerce Committee on this significant bipartisan achievement, and looks forward to working with Congress in supporting our mission of health system transformation. Representing more than 1,000 medical home stakeholders and supporters throughout the U.S., including providers, hospitals, health plans, employers, health IT, consulting, and pharmaceutical firms, the PCPCC is dedicated to advancing an effective and efficient health system built on a strong foundation of primary care and the PCMH. The PCPCC achieves its mission through the work of our five Stakeholder Centers, led by experts and thought leaders who are dedicated to transforming the U.S. health care system through delivery reform, payment reform, patient engagement, and employee benefit redesign.