We sit down with Reena Koshy of the Puget Sound Health Alliance to discuss the Multi-Payer Medical Home Payment pilot.
Organization Overview: The Puget Sound Health Alliance is a non-profit, multi-stakeholder regional health improvement collaborative. The Alliance is part of the Robert Wood Johnson Foundation's Aligning Forces for Quality program, having joined the program in 2006 as one of the original four pilot sites. The Alliance convenes those who pay for care with those who provide care to align their efforts to improve the value of health care. The main focus of the Alliance is on performance reporting, measurement and analytics, payment reform, and consumer engagement.
Bio: Reena Koshy is a practicing family physician in Seattle, Wash. She has worked in primary care/ community health centers in the U.S. and abroad in Nicaragua, Peru, and New Zealand. She worked in New Zealand's Ministry of Health in 2007 to develop an information strategy for the primary care/ medical home model. She joined the Alliance through a Robert Wood Johnson grant to act as project manager for the Multi-Payer Medical Home Payment Pilot in 2009.
Why did you get started?
Washington State worked with medical groups in the Collaborative to Improve Health Care over several years, with the final phase of the collaborative focused on the Patient Centered Medical Home (PCMH) to implement the chronic care model and improve care coordination. The next step was to fund investments needed for increased work of care coordination. Washington Governor Chris Gregoire requested testing of payment methods for primary care clinics using the PCMH model.
What has been tried so far?
Twelve pilot sites receive a new per member per month payment (PMPM) in exchange for efforts to reduce avoidable emergency department or inpatient admissions. Conceptually, the savings from reduced use of the ED are intended to fund the upfront PMPM. Payments of $2.50 to $2.00 PMPM are made over 32 months. Practices share both savings and losses in this model.
What progress have you made so far?
Seven participating health plans, eight medical practices and over 10 data analysts have established a working relationship to develop contracts, measures and data reporting to carry out the payment pilot. There are five private carriers and two Medicaid health plans in the pilot.
What are the key challenges you've faced?
The challenge of the multi-payer approach is in changing business practices before understanding the investment return. Practices changed care delivery and health plans modified data reporting and payment methods without having common knowledge of regional cost and utilization patterns for preventable ED and inpatient admissions. Pilot implementation was the biggest challenge because all health plans could not accommodate one process for the chosen payment method or data measurement. Some health plans cited legal restrictions which prohibited use of a third party for data analysis or certain types of payment methods. Subsequently, the variation between plan methods led to errors and delays in data reporting.
How have you tried to overcome them?
The pilot allowed each plan to complete data reporting and payment according to their capacity while agreeing to use common methods.
Lesson Learned
1. Allowing plans to report data differently increased complexity and resulted in significant delays. Less time and investment may have been needed if all parties could have used a third party to collect data and calculate pilot results.
2. New methods of patient attribution are needed in order to pay for pro-active care. Fee for service payments need to link patients to a provider after they seek care, but for PCMH models, patients need to be identified before they are seen.
3. Information to guide practice transformation is different from that needed to assess investment return. Clinics need to understand utilization patterns to guide interventions, and they need it within 24-48 hours. In contrast, assessing return on investment requires cost of care data in the emergency room and primary care setting, which may be held as proprietary information and/or unavailable for several months because of claims run-out.
What advice can you share with others?
Because multi-payer payment models require significant investment of time, staffing and money by both plans and medical groups, relevant data should be produced first to judge whether sufficient resources are available to successfully implement payment changes.
What are the next steps you plan to take?
The pilot will complete its third and final year in 2013. The participants will review data and progress in quarterly meetings, which will inform future payment reform efforts in the state.
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