Improving healthcare quality and efficiency can save money, according to the first-year results of a congressionally mandated three-year CMS demonstration project involving 10 large physician group practices using 10 diabetes-care quality measures drawn from the CMS Doctors Office Quality, or DOQ, project. Although in the first year of the project, only two practices generated significant savings and Acting Deputy CMS Administrator Herb Kuhn attributed some of this to project start up costs.
The pay-for-performance demonstration project also calls for the CMS to provide financial rewards to practices that show savings of greater than 2% from projected costs developed from the baseline yearApril 1, 2003 to March 31, 2004and when compared with the costs generated by a local control group. Two practicesMarshfield (Wis.) Clinic and the University of Michigan Faculty Group Practice, Ann Arborearned $7.3 million in payments for performance and efficiency out of $9.5 million in Medicare savings they generated.
Kuhn explained that savings are divided 80-20 with eligible practices receiving 80% of the money they saved Medicare and 20% of the saving going back to the Medicare program.
Under this formula, he said Marshfield has received more than $4.5 million and the University of Michigan has received more than $2.7 million.
In the first year of the projectApril 1, 2005, to March 31, 2006all 10 participating practices hit seven of 10 targeted benchmarks for clinical measures for diabetes treatment. Two practicesForsyth Medical Group, Winston-Salem, N.C.; and St. Johns Health System, Springfield, Mo.met all 10 benchmarks.
Together, the 10 groups include some 5,000 physicians who provide care for about 200,000 Medicare fee-for-service beneficiaries. Quality measures for congestive heart failure, cancer screening and other conditions are being added in the second and third years of the demonstration.
According to a spokesman for one of the participating groups, Geisinger Health System of Danville, Pa., the total costs of care were $21 million less than projected. -- by Andis Robeznieks