Editor's note: The following is an edited excerpt of the transcript of a July 27 editorial webcast, “Reimbursement: The next generation” conducted by Modern Healthcare. The panelists were David Dupree, vice president of provider contracting at Cigna HealthCare in Bloomfield, Conn., and Dr. Barbara Walters, senior medical director of the southern New Hampshire community group practices of Dartmouth-Hitchcock based in Lebanon, N.H. Moderated by reporter Paul Barr, the panelists discussed new payment models being tested by public and private healthcare insurance programs.
New ways to pay
Panelists discuss the next generation of models for reimbursement
Paul Barr: I understand risk-adjustment can be a difficult issue to handle. I was wondering how risk-adjustment went with your experience in ACOs?
Dr. Barbara Walters: Risk-adjustment, the methodology for risk-adjustment in the Medicare demonstration project, was done with the DxCG Grouper, which is the software that Medicare uses so it's based on the ICD-9 diagnostics codes. It was important for us to understand the algorithm and the methodology by which it was attributed and assigned, and make sure our claims submissions had the same necessary elements so the appropriate risk was indeed assigned for the patients that we care for.
Barr: Why is your project focused on selected procedures only? And how were they chosen to be in the project?
David Dupree: The way we approached this is through the lens of what's important to our clients, and that can mean from a cost perspective or even from a risk-profile perspective. Generally, the procedures we targeted represent a significant portion of not only current healthcare costs but also future healthcare costs. So let's look at cardiovascular and musculoskeletal conditions. Those tend to be highly costly procedures and they contribute quite a bit to healthcare trends for a client. The other thing ... is there are some industry-accepted protocols in place for most of these procedures. So in terms of being able to develop and implement a protocol, there's a pretty good line of sight to that.
Barr: Does Dartmouth-Hitchcock intend to seek certification as a Medicare ACO? If so, why? If not, why not?
Walters: I believe we're already functioning as an ACO, so I don't know what the added value of getting the certification would be, so I think the jury's still out. I need to understand what the standards say and see if it is a requirement for any of the partners we would be collaborating with.
Barr: I understand this project that you discussed is just beginning or has begun recently, but in any case, do you have a feel for whether this project is making or losing money at this point?
Dupree: Not at this point. It's too early to tell, but even if we're successful in implementing at least the readmission portion or the complications piece of the puzzle, using standard industry statistics we are going to see an impact not only to cross trends but also less absenteeism on the client side. But we're going to see hopefully more consistent outcomes.
Barr: Does Dartmouth-Hitchcock have any experience with bundled payments, and how does that tie in with the ACO?
Walters: We don't. Other than in the past we have had some cardiovascular bundled payments in our standard fee-for-service contract, so it hasn't been a core piece of any of the accountable care organization contracts only because if you get the total cost—if you're responsible for the total cost of care, whatever the procedure that would be bundled is already included.
Barr: David, how does what you're doing compare with Medicare's value-based purchasing program, or is that even a fair comparison to make?
Dupree: Directionally, it's fairly consistent with the approach. There are some subtleties within that program, and it has a lot to do with just how the Medicare program operates generally. So you can't really translate it one for one into a commercial environment. But the themes are consistent in what we're trying to target.
Barr: Barbara, you mentioned you created a workaround for having multiple electronic record systems ... is that going to be a permanent solution or are you going to try to create a single system?
Walters: I think, for us, because we have the data warehouse and the information that we use to manage our patient population includes not only fields of fine data from electronic medical records, it also needs information from outside entities—claims information from those pieces of care that we don't provide because we don't have a particular specialty in house. The data warehouse approach for us is probably going to be a long-lived approach.
Barr: David, Cigna is pretty active in alternative forms of reimbursement. I'm wondering how what you're doing cuts into a more broader picture of what Cigna's trying to do? Is it one of many similar projects or is this a testing lab for you?
Dupree: This is a testing lab, but it is all part of the grand plan. And it's really moving toward a value-based approach that can include everyone. We've launched the physician collaborative, and now I think we need to set our sights on having similar programs available to other parts of the healthcare equation for all facilities.
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