Healthcare Business News

Home inspection

500 practices launch Medicare project

By Andis Robeznieks
Posted: August 25, 2012 - 12:01 am ET

The clinical benefits and financial viability of patient-centered medical homes will be put to the ultimate test over the next four years by 500 primary-care physician practices that agreed to participate in a new Medicare demonstration project.

The CMS announced the participants in its Comprehensive Primary Care Initiative last week to much fanfare and hope in its success.

“The CPCI is very well conceived, well designed and, so far, a well-executed program,” said Patrick Gordon, program director for the Colorado Beacon Consortium and director of government programs for consortium member Rocky Mountain Health Plans of Grand Junction, Colo.

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And well stocked. The 500 practices are in seven areas: New York's Capital District-Hudson Valley region; the Ohio-Kentucky Cincinnati-Dayton region; Tulsa, Okla.; and statewide in Arkansas, Colorado, New Jersey and Oregon. Combined, the practices include 2,144 physicians, physician assistants, nurse practitioners and other providers who care for 313,000 Medicare beneficiaries, according to the CMS. The CMS did not provide an estimate for how many people would be covered by Medicaid or commercial payers.

According to the CMS, most efforts will launch around Nov. 1, with Tulsa practices aiming for Oct. 1.

Under the program, Medicare will pay the practices a $20 per member, per month care-management fee for two years. That's in addition to their traditional fee-for-service reimbursement. The care-management fee will be reduced to an average of $15 in years three and four, but providers also will be eligible to share in savings they generated for Medicare after the second year.

In addition, 43 other payers—including commercial plans and state Medicaid programs—are participating, though how much they are paying has yet to be released. With Medicare, Medicaid and private payers combined, the program's goal is to have at least 60% of the participating practices' patient base covered by per member, per month management fees. The intent is to have the practices use that money to invest in the staff and information technology necessary for care-coordination services that should help lower hospitalizations, eliminate duplicate testing and avoid other inefficiencies that drive up healthcare costs.

Although the CMS convened the participants, Gordon noted that most of the money will come from private companies that he said he believes will be pleased with the results and could “fundamentally change the economics of primary care.”

“There will be a real-world return on investment to private payers in very competitive markets,” Gordon said. “And that will bring more support for the model—not just from the government—but from private payers as well.”

In Colorado, for example, where 73 practices with 335 providers agreed to participate, 10 payers including Medicaid and Medicare have joined the program. In Oregon, Medicaid and Medicare, plus five payers, will be kicking in money to 70 practices with 517 providers.

Three of the Oregon practices are run by the Oregon Health & Science University in Portland. Dr. John Saultz, OHSU professor and chairman of its family medicine department, noted the significance of the new investment Medicare and private payers were making: “Before, if you put extra money into primary care, it had to come from some place else in the healthcare system and—the other parts of the healthcare system—none of them were too keen on donating.”

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