Collaborating on healthcare

Insurers, physicians see value in partnerships

Physician practices that pioneered integrated delivery models have taken different paths to find someone to buy the innovation they're selling.

The Greater Rochester (N.Y.) Independent Practice Association, formed in 1996, has 917 member physicians affiliated with Rochester General Hospital and Newark Wayne Community Hospital, both in New York. In September 2007, it was only the second clinically integrated IPA to get a favorable advisory opinion from the Federal Trade Commission. But even after the FTC deemed GRIPA's collaborating physicians weren't violating antitrust statutes, local health plans shunned GRIPA and its information technology-aided business model.

So GRIPA looked elsewhere for business, and it slowly and steadily grew its client base with self-insured companies in the area. Although some final details still need to be worked out, it is forging ahead now with what's described as an “accountable care partnership” with Excellus Blue Cross and Blue Shield.

Houston's Kelsey-Seybold Medical Clinic was founded in 1949 and achieved fame in 1966 for being named the medical provider for NASA. But, last December, the 370-physician multispecialty group made headlines for being the first accountable care program to be accredited by the National Committee for Quality Assurance. While ACOs are seen as a new concept, the clinic's ACO program started in 2007 as a partnership with insurance carrier Cigna. The program, KelseyCare Powered by Cigna, emphasized lowering costs through preventive services and IT-assisted coordinated care.

Now, leveraging provisions in the Patient Protection and Affordable Care Act, Kelsey-Seybold is signing on small businesses with self-funded insurance plans. Last month, the practice entered into an agreement with Austin, Texas-based Boon-Chapman, a third-party employee benefit administrator, to offer health benefits for partially self-funded companies with 50 or more covered employees. (Employers in partially self-funded plans carry stop-loss insurance.)

Matt Horn, Kelsey-Seybold's manager of sales and business development, noted that self-funded insurance plans are not subject to the Affordable Care Act's medical-loss ratio provisions—which require health plans to spend most of beneficiaries' premiums on health services—and will not have to pay the annual fee some health insurers will be required to pay starting in 2014. Companies with 50 or more employees will, however, be subject to a new rule requiring them to provide health insurance or pay a per-employee penalty.

Another aspect of KelseyCare that will be attractive to employers, Horn said, is that 45% to 50% of their costs will be covered by a flat per-member, per-month fee that will take away much of the uncertainty of healthcare expenses.

“We do think the ACA will accelerate self-funding,” said Dr. Spencer Berthelsen, Kelsey-Seybold board chairman and managing director.

Berthelsen also said that Kelsey-Seybold is well-positioned because it can point to six years of impressive quality and cost data from KelseyCare that's been verified by a third-party benchmarking study.

The numbers show Kelsey-Seybold delivered care at 15% to 30% below comparable plans. The bulk of the savings were attributed to keeping “catastrophic” health claims of more than $50,000 at about half of what was shown for non-KelseyCare Cigna health plan members.

While KelseyCare started with one big payer, Cigna, and is now branching off to do business with self-insured employers, the GRIPA Connect Clinical Integration program started by contracting with large employers including the Rochester General Health System, LiDestri Foods and Paychex, the payroll and human resources outsourcing company that has some 3,500 employees in eight locations around Rochester.

GRIPA got its foot in the health plan door in 2011 with an accountable care program that included 4,500 employees, dependents and pre-Medicare retirees of the County of Monroe who were already covered by Excellus Blue Cross and Blue Shield.

On Jan. 1, it launched the “Care for Health” accountable care partnership with the Rochester General Health System and Excellus Blue Cross and Blue Shield.

Although the program is under way, an Excellus spokesman declined to comment on it, explaining the deal is not yet final. Dr. Joseph Vasile, GRIPA's president and CEO, acknowledged that some details still need to be worked out. But, he added, “We have an agreement, and we're in the live period.”

He described the program as a “Medicare ACO-type” agreement with quality-improvement and shared-savings incentives. “It really is a partnership between the insurance company, the healthcare system and our physicians,” Vasile said.

Based on claims experience for the 110,000 patients covered by Excellus, the five-year program begins with a $520 million budget for 2013, with three parties splitting any savings or losses based on a quality-score formula. There are 18 quality measures reflecting care in diabetes, coronary artery disease, hypertension and other conditions.

Vasile said that President Barack Obama's re-election and the U.S. Supreme Court decision upholding the Affordable Care Act have helped GRIPA's efforts but also that “the movement would have gone forward no matter what occurred in Washington.”

After several years failing to cultivate much interest from health insurance companies, Vasile said the program with Excellus could be the first of many future working relationships with payers. “It's a very significant next step,” he said. “And, I hope, a next step to other ways we can partner.”

Dr. Eric Nielsen, a former GRIPA chief medical officer and now a vice president with the Camden Group consulting company, agreed.

“We see payers around the country encouraging provider groups to provide clinical integration,” he said. “I think the Affordable Care Act had something to do with it,” he added. “But because of the high cost of healthcare, we had to do something.”



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