Can Small Practices Adapt to New Payment Plans? – Bill Golden, MD

Even small practices can adapt to new payment models — but they need the right incentives to get going, Bill Golden, MD, medical director of Arkansas Medicaid, said here at the annual meeting of the American College of Physicians.

“We’ve been doing payment transformation in a very often rural state that has ‘onesie-twosie’ practices, often with limited resources,” Golden explained.

Those very small practices have been struggling financially, “dependent on 5-minute visits” for simple conditions such as ankle strains and urinary tract infections, he said. “The profit on that is better than seeing a hypertensive diabetic, which takes 10-15 minutes.”

So a group of payers — public programs such as Medicaid and private insurers including Blue Cross, the state’s largest private payer — started the Health Care Payment Improvement Initiative in 2011 to change the payment system for doctors in the state. “We said, ‘The healthcare system pays for things it shouldn’t pay for, doesn’t pay for things it should pay for, and it’s unsustainable,'” said Golden.

The group started things off in 2012 with an “episodes of care” reimbursement program. The payers calculated a risk-adjusted average cost per case for various conditions. Practices spending below that amount got 50% of the savings; those who spent above that amount had to pay 50% of the overage. “You had to outrun your colleagues, or at least not be in the ‘red zone,'” Golden said. The payers created an online portal so providers could see their data.

“I had doctors come in and say, ‘I’m an ob/gyn.; why am I in the red zone?’ ‘Well, your pathology costs are triple everyone else’s.'” It turned out that the doctor was sending every placenta to pathology because he thought everyone did that.

Another practice had high costs for treating upper respiratory infections because they were over-ordering lab tests and antibiotics; at the same time, their emergency department costs were at the state norm. “So it’s very instructive,” Golden said. But episodes of care don’t work so well with ongoing chronic conditions like hypertension and diabetes.

So the payers also started a primary care medical home program in 2014, and now about 85%-90% of patients are in voluntary medical homes, with 200 practices and 1,000 doctors participating, Golden said. That model involves giving primary care physicians a set per-member-per-month fee to care for the patients in their practice, with $5 per member per month available for risk adjustment.

The payers also told the practices that they would give them an extra per-member-per-month fee for performing additional services. “This money is not for taking home and making a boat payment; this is an investment in your practice, and we expect you to do extra stuff,” said Golden. “And we’re going to give you coaches because we want to raise all boats.”

One thing they asked practices to do was get rid of their answering machines that they used on weekends, telling patients to go to the emergency department with any problems. It worked. “Believe it or not, we no longer have answering machines in our state,” he said.

“After 6 months, we called people to see who still had answering machines — about 15 or 20 still had them; we gave them 6 months to fix it” and if they didn’t do that, they were out of the program. The payers started out with 120 practices the first year, and threw out four or five who “either took the money and did nothing, or they were too disorganized.”

They also asked the practices to see their high-risk patients every 6 months, and to develop care plans for those patients’ conditions, even if they were just a few words (“Hypertension out of control; added beta blocker; will monitor”), Golden explained.

The payers also had a second bucket of money; they told the primary care practices that they would calculate an average per-member-per-year cost, and if a practice came in below that cost it would get 50% of the savings. “If you think about the fact that most primary care doctors are 5% of the healthcare spend but they control 80% of the dollar, and you’re offering to give 50% shared savings on that 75%, suddenly that’s a big relative chunk of change … so that got people’s attention.”

This new program wasn’t without its challenges, however. “Some of these folks were wedded to a high-volume world,” he said. For example, “some people were never getting their HbA1c [tests] for diabetes because they were never seen for diabetes; they always came in for head colds and broken ankles … So we had to change that paradigm.”

Before the program, people were seeing 50-60 patients a day, and they weren’t doing chronic care management. “Now [providers] can make triage decisions, and determine who to see and why,” said Golden. “And you’ve empowered a nurse clinician. In my practice now, [I say to the nurse] ‘I just saw X; please make sure she understood what’s going on, and make sure she gets to her orthopedist.’ I think it’s just more talking to a team as opposed to being a guy or gal with sneakers running between rooms. They’re using their time more wisely.”

As of 2015, the latest data available, the payers had given out $14 million in per-member-per-month payments, paid out about $13 million in shared savings, and avoided $27 million in costs on an inflation basis.

And the practices have done interesting things with their money, he added. “When some of the bonus checks went out, one practice gave bonus checks to front desk clerks; they said they were instrumental in keeping the flow going.”

Source: Can Small Practices Adapt to New Payment Plans? | Medpage Today