The Washington State Multi-Payer Medical Home Reimbursement Pilot is testing one way to reduce potentially avoidable emergency room and hospital admissions by paying primary care practices in a way that rewards positive outcomes. It combines fee for service reimbursement with a pre-payment to primary care based on attributed patient counts. In exchange, practices strive to reduce avoidable costly care in the emergency department (ED) or hospital. Practices and plans potentially share financial losses as well as savings, a unique feature in this payment design. The targeted conditions are avoidable events in the Emergency department (ED) or inpatient setting among commercial and Medicaid members with fee for service reimbursement plans.
The payment model has two parts: Care management fee, calculated at $2.50 per member per month (PMPM) in the first 8 months of the pilot. The PMPM fee reduces to $2.00 PMPM for the remaining 2 years of the pilot. This is paid to the participating medical practice site in addition to the normal reimbursement from a participating health plan for clinical services to its enrollees. The calculated amounts are intended to cover basic elements of medical homes such as care management, expanded access/hours, registry maintenance and team management. Shared savings, imputed on the basis of reduced incidence of preventable ED and inpatient care, at practice-specific standard prices for those services. Practice sites will be eligible for a 50% share of imputed savings above the amount paid them in PMPM, if they maintain clinical quality. If a site fails to achieve savings at least equal to its PMPM total payment, it is liable for a penalty of the shortfall up to a maximum of 50% of PMPM. Payment of shared savings or penalties accrued in one observation period are realized by adjustments to PMPM in the subsequent payment period.
