Healthcare Business News

Docs, CMS in talks to extend PGP Demo

By Melanie Evans
Posted: April 7, 2011 - 1:15 pm ET

Ten physician group practices (PDF) are negotiating with the CMS to continue for two years the Medicare payment experiment widely cited as the forerunner to accountable care organizations, according to medical group executives.

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The Physician Group Practice Demonstration, which ended in March 2010 after five years, offered bonuses tied to quality performance and cost control for Medicare fee-for-service patients. Financial returns for physician were mixed during the first four years and no data is yet available for the final year.

Under the two-year extension, financial incentives would be changed to more closely fit proposed rules for Medicare ACOs released last week, said David Spahlinger, executive director of the University of Michigan Medical Group Practice, one of the 10 physician groups included in the original demonstration. That would allow Medicare to test incentives ahead of the 2012 launch of Medicare ACOs and help physician groups to prepare for accountable-care efforts, he said.

However, medical groups would not be at risk for financial losses, as is the case under proposals for Medicare accountable care groups, said Dr. Thomas Graf, associate chief medical officer for population health at Geisinger Health System.

Nan Holland, senior director for clinical resource services with Novant Medical Group, which includes Forsyth Medical Group, another participant in the original demonstration, said two-year PGP demonstration extension would collect data through 2012.

The CMS released proposed rules for the two-year extension last week, said Dr. Arthur “Bud” McDowell, vice president for clinical affairs at Middlesex Health System, another participant in the original five-year pilot.

The CMS did not respond to a request for information by deadline.

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