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Want to be paid extra for providing appropriate, cost-effective medical care? Doctors in Arkansas are about to find out what that’s all about as the state’s Medicaid program – along with two private insurance companies – kicks off a gainsharing program.
Under Arkansas’s Health Care Payment Improvement Initiative, health care payers have asked physicians and hospitals to keep costs for five high-volume episodes of care while still meeting quality standards. The episodes of care are perinatal care, attention deficit/hyperactivity disorder, upper respiratory infection, hip and knee replacement, and heart failure.
If providers succeed, they can share in the money saved by the insurers. If they don’t, they’ll need to return some of the excess fees.
"If you provide a service and you can do it with quality standards and good outcomes and do it less expensively than the other guy, we’re going to give you a bonus. The better doctors should do well," said Dr. William E. Golden, medical director of the Arkansas Medicaid program.
Other states, especially rural ones, will be watching how things play out in Arkansas, Dr. Golden said. "Everybody is going in this direction. We’ve just bitten off more of the apple faster than most."
The shift from simply paying for services provided to a cost-and-quality approach was undertaken in part to put the state’s Medicaid program on firmer financial footing ahead of the coming expansion in 2014 under the Affordable Care Act.
Right now, Arkansas’ Medicaid program is one of the few in the country that is actually solvent. But it won’t stay that way unless there are fundamental changes to how health care providers get paid, said Dr. Golden, also professor of medicine and public health at the University of Arkansas, Little Rock. By rethinking the way Medicaid pays for care, officials are hoping to avoid across the board cuts in providers’ pay or limits in beneficiaries’ eligibility, he said.
The program began in July with physicians getting report cards showing them how their 2011 performance might stack up under the new system. That past performance won’t count toward payment, but should give physicians an idea of whether they need to rethink some of their practices.
This fall, Medicaid will start collecting data; actual adjustments to pay won’t come for about a year.
The private payers involved in the gainsharing project – Arkansas Blue Cross Blue Shield and Arkansas QualChoice – will start their data collection in January 2013.
All together, about 1 million Arkansans will be affected by the program, Dr. Golden estimated.
Physicians have greeted the program with skepticism, mostly due to initial, confusing reports about what would be involved. When the program was first announced in 2011, it was billed as a bundling initiative that would have awarded a single payment to a group of physicians and would have let them figure out how to divide it.
Those bundling discussions left everyone "terrified," Dr. Golden said. So Medicaid officials and their private sector partners agreed to move to a hybrid, accountable care program.
Dr. Lonnie Robinson, a family physician in Mountain Home, Ark., said he had some significant concerns back when the program called for bundling payments. "That sounded like a recipe for strife and a food fight," he said.
Dr. Robinson said he doesn’t expect any major changes in his day-to-day operations, unless significant data entry is involved. Right now, most data will be taken from claims, though physicians may be asked to submit additional information for the attention deficit/hyperactivity disorder, hip and knee replacement, and congestive heart failure episodes.
For primary care, the upper respiratory infection episodes are likely to have the biggest impact, Dr. Robinson said. He said he’s excited about the program’s emphasis on not prescribing antibiotics unnecessarily.
"That’s something I’ve been preaching to my patients since I’ve been in practice," Dr. Robinson said. "Now I have the backup of the payer to say not only do I not think it’s indicated, they don’t really want to pay for it."
But from a financial perspective, this program won’t touch too many doctors, he said.
"I feel that most physicians who are practicing mainstream medicine are probably not going to be affected by this," Dr. Robinson said. "It’s going to be people that are on the fringe as far as high cost per episode that are probably going to have to make some adjustments."
David Wroten, executive vice president of the Arkansas Medical Society, agreed that most physicians aren’t at risk for penalties. With upper respiratory infections, the physicians who could be in trouble are those who are routinely prescribe antibiotics, or routinely order labs and x-rays, or inappropriately upcode for the office visit.
"This is going to spotlight those folks," Mr. Wroten said.
He expressed concern about the perinatal episode of care. Some physicians have a higher cesarean delivery rate, which drives up their costs, but there is no evidence to show that it’s unnecessary, Mr. Wroten said.
Going forward, Medicaid and the other payers plan to expand the number of episodes of care included in the program. Episodes involved in long-term care are on their agenda, Dr. Golden said. They are also working on how they could potentially pay physicians more for providing a patient-centered medical home, he said.
Not all doctors will benefit, even if they provide a portion of the treatment for a particular episode of care in these areas. As part of the program, the payers will identify a principal accountable provider (PAP) who is the main source of care. For instance, with an upper respiratory infection, the PAP is likely to be the primary care provider. For heart failure, the PAP likely would be the hospital where the patient was first admitted.
Even though the PAP directly controls only a portion of the spending for the episode of care, he or she is responsible for the global cost of that episode. For example, for an upper respiratory infection, the episode would begin with the initial office visit and would include all follow-up care for the next 21 days. The global cost includes office visits, labs, imaging, and any prescribed medications.
The idea is that other providers who may be involved in the episode – perhaps a radiologist or a pharmacist – are passive players, according to Dr. Golden. The PAP, who acts as a quarterback for the patient’s care, is responsible for holding down the overall costs.
For most physicians, the program won’t make a difference in their bottom lines. Medicaid and the private insurers will continue to use the traditional fee-for-service system. For the five episodes of care, the payers will set thresholds for appropriate spending, ranging from "acceptable" to "commendable." Based on claims data, the payers will retrospectively review spending and identify those physicians who are outliers.
Physicians whose average costs for a particular episode of care exceed the "acceptable" cost level will have to return a portion of the extra fees, likely about half, according to Dr. Golden. However, there will be a limit on how much physicians have to pay back to ensure that the penalties aren’t excessive, he said.
Those with costs that are lower than the "commendable" level will share about half of the savings they have generated. Those in the middle won’t see any change in payment.
Very-high-cost patient events will be excluded when calculating an average cost of care, Dr. Golden said. For instance, with upper respiratory infection episodes, infants and patients with chronic obstructive pulmonary disease could be excluded from the calculations.
Each of the participating payers will apply the program slightly differently. For example, Arkansas Blue Cross Blue Shield will start off with just three episodes of care: perinatal care, hip and knee replacement, and heart failure.
Want to be paid extra for providing appropriate, cost-effective medical care? Doctors in Arkansas are about to find out what that’s all about as the state’s Medicaid program – along with two private insurance companies – kicks off a gainsharing program.
Under Arkansas’s Health Care Payment Improvement Initiative, health care payers have asked physicians and hospitals to keep costs for five high-volume episodes of care while still meeting quality standards. The episodes of care are perinatal care, attention deficit/hyperactivity disorder, upper respiratory infection, hip and knee replacement, and heart failure.
If providers succeed, they can share in the money saved by the insurers. If they don’t, they’ll need to return some of the excess fees.
"If you provide a service and you can do it with quality standards and good outcomes and do it less expensively than the other guy, we’re going to give you a bonus. The better doctors should do well," said Dr. William E. Golden, medical director of the Arkansas Medicaid program.
Other states, especially rural ones, will be watching how things play out in Arkansas, Dr. Golden said. "Everybody is going in this direction. We’ve just bitten off more of the apple faster than most."
The shift from simply paying for services provided to a cost-and-quality approach was undertaken in part to put the state’s Medicaid program on firmer financial footing ahead of the coming expansion in 2014 under the Affordable Care Act.
Right now, Arkansas’ Medicaid program is one of the few in the country that is actually solvent. But it won’t stay that way unless there are fundamental changes to how health care providers get paid, said Dr. Golden, also professor of medicine and public health at the University of Arkansas, Little Rock. By rethinking the way Medicaid pays for care, officials are hoping to avoid across the board cuts in providers’ pay or limits in beneficiaries’ eligibility, he said.
The program began in July with physicians getting report cards showing them how their 2011 performance might stack up under the new system. That past performance won’t count toward payment, but should give physicians an idea of whether they need to rethink some of their practices.
This fall, Medicaid will start collecting data; actual adjustments to pay won’t come for about a year.
The private payers involved in the gainsharing project – Arkansas Blue Cross Blue Shield and Arkansas QualChoice – will start their data collection in January 2013.
All together, about 1 million Arkansans will be affected by the program, Dr. Golden estimated.
Physicians have greeted the program with skepticism, mostly due to initial, confusing reports about what would be involved. When the program was first announced in 2011, it was billed as a bundling initiative that would have awarded a single payment to a group of physicians and would have let them figure out how to divide it.
Those bundling discussions left everyone "terrified," Dr. Golden said. So Medicaid officials and their private sector partners agreed to move to a hybrid, accountable care program.
Dr. Lonnie Robinson, a family physician in Mountain Home, Ark., said he had some significant concerns back when the program called for bundling payments. "That sounded like a recipe for strife and a food fight," he said.
Dr. Robinson said he doesn’t expect any major changes in his day-to-day operations, unless significant data entry is involved. Right now, most data will be taken from claims, though physicians may be asked to submit additional information for the attention deficit/hyperactivity disorder, hip and knee replacement, and congestive heart failure episodes.
For primary care, the upper respiratory infection episodes are likely to have the biggest impact, Dr. Robinson said. He said he’s excited about the program’s emphasis on not prescribing antibiotics unnecessarily.
"That’s something I’ve been preaching to my patients since I’ve been in practice," Dr. Robinson said. "Now I have the backup of the payer to say not only do I not think it’s indicated, they don’t really want to pay for it."
But from a financial perspective, this program won’t touch too many doctors, he said.
"I feel that most physicians who are practicing mainstream medicine are probably not going to be affected by this," Dr. Robinson said. "It’s going to be people that are on the fringe as far as high cost per episode that are probably going to have to make some adjustments."
David Wroten, executive vice president of the Arkansas Medical Society, agreed that most physicians aren’t at risk for penalties. With upper respiratory infections, the physicians who could be in trouble are those who are routinely prescribe antibiotics, or routinely order labs and x-rays, or inappropriately upcode for the office visit.
"This is going to spotlight those folks," Mr. Wroten said.
He expressed concern about the perinatal episode of care. Some physicians have a higher cesarean delivery rate, which drives up their costs, but there is no evidence to show that it’s unnecessary, Mr. Wroten said.
Going forward, Medicaid and the other payers plan to expand the number of episodes of care included in the program. Episodes involved in long-term care are on their agenda, Dr. Golden said. They are also working on how they could potentially pay physicians more for providing a patient-centered medical home, he said.
Not all doctors will benefit, even if they provide a portion of the treatment for a particular episode of care in these areas. As part of the program, the payers will identify a principal accountable provider (PAP) who is the main source of care. For instance, with an upper respiratory infection, the PAP is likely to be the primary care provider. For heart failure, the PAP likely would be the hospital where the patient was first admitted.
Even though the PAP directly controls only a portion of the spending for the episode of care, he or she is responsible for the global cost of that episode. For example, for an upper respiratory infection, the episode would begin with the initial office visit and would include all follow-up care for the next 21 days. The global cost includes office visits, labs, imaging, and any prescribed medications.
The idea is that other providers who may be involved in the episode – perhaps a radiologist or a pharmacist – are passive players, according to Dr. Golden. The PAP, who acts as a quarterback for the patient’s care, is responsible for holding down the overall costs.
For most physicians, the program won’t make a difference in their bottom lines. Medicaid and the private insurers will continue to use the traditional fee-for-service system. For the five episodes of care, the payers will set thresholds for appropriate spending, ranging from "acceptable" to "commendable." Based on claims data, the payers will retrospectively review spending and identify those physicians who are outliers.
Physicians whose average costs for a particular episode of care exceed the "acceptable" cost level will have to return a portion of the extra fees, likely about half, according to Dr. Golden. However, there will be a limit on how much physicians have to pay back to ensure that the penalties aren’t excessive, he said.
Those with costs that are lower than the "commendable" level will share about half of the savings they have generated. Those in the middle won’t see any change in payment.
Very-high-cost patient events will be excluded when calculating an average cost of care, Dr. Golden said. For instance, with upper respiratory infection episodes, infants and patients with chronic obstructive pulmonary disease could be excluded from the calculations.
Each of the participating payers will apply the program slightly differently. For example, Arkansas Blue Cross Blue Shield will start off with just three episodes of care: perinatal care, hip and knee replacement, and heart failure.
Want to be paid extra for providing appropriate, cost-effective medical care? Doctors in Arkansas are about to find out what that’s all about as the state’s Medicaid program – along with two private insurance companies – kicks off a gainsharing program.
Under Arkansas’s Health Care Payment Improvement Initiative, health care payers have asked physicians and hospitals to keep costs for five high-volume episodes of care while still meeting quality standards. The episodes of care are perinatal care, attention deficit/hyperactivity disorder, upper respiratory infection, hip and knee replacement, and heart failure.
If providers succeed, they can share in the money saved by the insurers. If they don’t, they’ll need to return some of the excess fees.
"If you provide a service and you can do it with quality standards and good outcomes and do it less expensively than the other guy, we’re going to give you a bonus. The better doctors should do well," said Dr. William E. Golden, medical director of the Arkansas Medicaid program.
Other states, especially rural ones, will be watching how things play out in Arkansas, Dr. Golden said. "Everybody is going in this direction. We’ve just bitten off more of the apple faster than most."
The shift from simply paying for services provided to a cost-and-quality approach was undertaken in part to put the state’s Medicaid program on firmer financial footing ahead of the coming expansion in 2014 under the Affordable Care Act.
Right now, Arkansas’ Medicaid program is one of the few in the country that is actually solvent. But it won’t stay that way unless there are fundamental changes to how health care providers get paid, said Dr. Golden, also professor of medicine and public health at the University of Arkansas, Little Rock. By rethinking the way Medicaid pays for care, officials are hoping to avoid across the board cuts in providers’ pay or limits in beneficiaries’ eligibility, he said.
The program began in July with physicians getting report cards showing them how their 2011 performance might stack up under the new system. That past performance won’t count toward payment, but should give physicians an idea of whether they need to rethink some of their practices.
This fall, Medicaid will start collecting data; actual adjustments to pay won’t come for about a year.
The private payers involved in the gainsharing project – Arkansas Blue Cross Blue Shield and Arkansas QualChoice – will start their data collection in January 2013.
All together, about 1 million Arkansans will be affected by the program, Dr. Golden estimated.
Physicians have greeted the program with skepticism, mostly due to initial, confusing reports about what would be involved. When the program was first announced in 2011, it was billed as a bundling initiative that would have awarded a single payment to a group of physicians and would have let them figure out how to divide it.
Those bundling discussions left everyone "terrified," Dr. Golden said. So Medicaid officials and their private sector partners agreed to move to a hybrid, accountable care program.
Dr. Lonnie Robinson, a family physician in Mountain Home, Ark., said he had some significant concerns back when the program called for bundling payments. "That sounded like a recipe for strife and a food fight," he said.
Dr. Robinson said he doesn’t expect any major changes in his day-to-day operations, unless significant data entry is involved. Right now, most data will be taken from claims, though physicians may be asked to submit additional information for the attention deficit/hyperactivity disorder, hip and knee replacement, and congestive heart failure episodes.
For primary care, the upper respiratory infection episodes are likely to have the biggest impact, Dr. Robinson said. He said he’s excited about the program’s emphasis on not prescribing antibiotics unnecessarily.
"That’s something I’ve been preaching to my patients since I’ve been in practice," Dr. Robinson said. "Now I have the backup of the payer to say not only do I not think it’s indicated, they don’t really want to pay for it."
But from a financial perspective, this program won’t touch too many doctors, he said.
"I feel that most physicians who are practicing mainstream medicine are probably not going to be affected by this," Dr. Robinson said. "It’s going to be people that are on the fringe as far as high cost per episode that are probably going to have to make some adjustments."
David Wroten, executive vice president of the Arkansas Medical Society, agreed that most physicians aren’t at risk for penalties. With upper respiratory infections, the physicians who could be in trouble are those who are routinely prescribe antibiotics, or routinely order labs and x-rays, or inappropriately upcode for the office visit.
"This is going to spotlight those folks," Mr. Wroten said.
He expressed concern about the perinatal episode of care. Some physicians have a higher cesarean delivery rate, which drives up their costs, but there is no evidence to show that it’s unnecessary, Mr. Wroten said.
Going forward, Medicaid and the other payers plan to expand the number of episodes of care included in the program. Episodes involved in long-term care are on their agenda, Dr. Golden said. They are also working on how they could potentially pay physicians more for providing a patient-centered medical home, he said.
Not all doctors will benefit, even if they provide a portion of the treatment for a particular episode of care in these areas. As part of the program, the payers will identify a principal accountable provider (PAP) who is the main source of care. For instance, with an upper respiratory infection, the PAP is likely to be the primary care provider. For heart failure, the PAP likely would be the hospital where the patient was first admitted.
Even though the PAP directly controls only a portion of the spending for the episode of care, he or she is responsible for the global cost of that episode. For example, for an upper respiratory infection, the episode would begin with the initial office visit and would include all follow-up care for the next 21 days. The global cost includes office visits, labs, imaging, and any prescribed medications.
The idea is that other providers who may be involved in the episode – perhaps a radiologist or a pharmacist – are passive players, according to Dr. Golden. The PAP, who acts as a quarterback for the patient’s care, is responsible for holding down the overall costs.
For most physicians, the program won’t make a difference in their bottom lines. Medicaid and the private insurers will continue to use the traditional fee-for-service system. For the five episodes of care, the payers will set thresholds for appropriate spending, ranging from "acceptable" to "commendable." Based on claims data, the payers will retrospectively review spending and identify those physicians who are outliers.
Physicians whose average costs for a particular episode of care exceed the "acceptable" cost level will have to return a portion of the extra fees, likely about half, according to Dr. Golden. However, there will be a limit on how much physicians have to pay back to ensure that the penalties aren’t excessive, he said.
Those with costs that are lower than the "commendable" level will share about half of the savings they have generated. Those in the middle won’t see any change in payment.
Very-high-cost patient events will be excluded when calculating an average cost of care, Dr. Golden said. For instance, with upper respiratory infection episodes, infants and patients with chronic obstructive pulmonary disease could be excluded from the calculations.
Each of the participating payers will apply the program slightly differently. For example, Arkansas Blue Cross Blue Shield will start off with just three episodes of care: perinatal care, hip and knee replacement, and heart failure.
