Overview of the Patient Centered Medical Home (PCMH)

1. Overview of the Patient Centered Medical Home(PCMH) Presentation to the Maryland Chapter American College of Physicians November 20, 2008 Neil Kirschner, Ph.D Senior Associate, Regulatory and Insurer Affairs Division of Government Affairs & Public PolicyAmerican College of PhysiciansEmail: nkirschner@acponline.orgPhone: 202-261-4535

2. Need for a New Healthcare Delivery Model • Increasing costs • Healthcare costs are growing faster than the economy and the cost of care is becoming difficult for employers, government and individuals to meet. • Need to improve quality • Patients receiving recommended treatment 55 % of the time • Poor U.S. performance on healthcare benchmarks compared to other developed countries despite spending more. • Regional variation • Healthcare cost and quality vary substantially among geographic regions. Little relationship between cost and quality.

3. Need for a New Healthcare Delivery Model • Inadequate response to chronic care needs • Increasingly aging and chronically ill population with payment system that doesn’t recognize services found necessary for essential care e.g. care coordination, evidence-based population management, disease self management • Decreased Interest in Primary Care • The number of new students entering into primary care is decreasing and physicians who have chosen the field are disproportionately leaving compared to other specialties. • Both domestic and international data indicating that higher proportion of primary care physicians related to higher healthcare quality and lower costs.

4. A Joint Proposed SolutionThe Patient-Centered Medical Home (PCMH) • Modern “medical home” concept originally in Pediatric literature in the 1960’s—a central source of care for “Special Needs” children. • AAFP—Future of Family Medicine Project (2004) “Personal Medical Home” • ACP—Advanced Medical Home (2006) • Key elements of a PCMH are described in a March 2007 joint statement of principles from ACP, AAFP, AAP and AOA. Often referred to as the “Joint Principles”. • Nexus of patient-centered care, primary care and chronic care model concepts

5. The Patient-Centered Medical Home • Redesigns clinical delivery and payment to facilitate • Patient-centered, longitudinal, coordinated care delivered by a “recognized” practice with a personal physician • Who accepts responsibility for the patient’s “whole person” • Who acts in partnership with patients and in collaboration with multidisciplinary teams (nurses, physician specialists, health educators, pharmacists) • Who uses practice level systems to improve access and communication, care integration, patient safety and outcomes • Who accepts accountability for care provided through on-going performance measurement and quality improvement.

6. American Academy of Hospice & Palliative Medicine American Academy of Neurology American Academy of Pediatrics American Academy of Family Physicians American College of Cardiology* American College of Chest Physicians* American College of Osteopathic Family Physicians American College of Osteopathic Internists American College of Physicians American Geriatrics Society* American Medical Association * Denotes CSS membership American Medical Directors Association American Osteopathic Association American Society of Clinical Oncology American Society of Addiction Medicine Association of Professors of Medicine Association of Program Directors in Internal Medicine Infectious Diseases Society of America* Clerkship Directors in Internal Medicine Society for Adolescent Medicine* Society of Critical Care Medicine* Society of General Internal Medicine* Professional Societies Endorsing “Principles”

7. Process to Define PCMH Using NCQA’s Physician Practice Connections • AAFP, AAP, ACP and AOA reviewed PPC elements, documentation requirements and scoring methodology for voluntary recognition process • Using consensus-driven process identified standards for PCMH and the associated documentation • Developed scoring methodology that includes “must have” elements and • Establishes the “first rung” of the ladder • Practices meeting this standard evidences basic practice systems consistent with PCMH model. • Identifies more sophisticated levels of the PCMH • PCC-PCMH tool available January, 2008

8. Sections (Points) PPC 1: Access & Communication (9) PPC 2: Patient Tracking & Registry Functions (21) PPC 3: Care Management (20) PPC 4: Patient Self-Management Support (6) PPC 5: Electronic Prescribing (8) PPC 6: Test Tracking (13) PPC 7: Referral Tracking (4) PPC 8: Performance Reporting & Improvement (15) PPC 9: Advanced Electronic Communication (4) TOTAL POINTS: 100

9. Physician Practice Connections – PCMH Levels Level 3: 75+ Points; 10/10 Must Pass Level 2: 50-74 Points; 10/10 Must Pass Increasing prospective $ Level 1: 25-49 Points; 5/10 Must Pass

10. Model Clarifications • PCMH model is NOT a gatekeeper model • Pt can see any physician, specialist/subspecialist allowed by plan…..does not require approval by PCMH practice • Nature of the model encourages closer ties to PCMH to help meet pt’s medical needs/preferences and help pt navigate complex health care system . • PCMH model is NOT specialty specific • Model is most consistent with primary care practices • There are patient subgroups where specialty/subspecialty practice would be more appropriate PCMH.

11. ACP and Others Recommend Supporting PCMH with Hybrid Payment Model • Three-component payment model that consists of: • Per patient, per month (PMPM) care coordination payment that accounts for • The physician and non-physician clinical staff work required to manage care outside a face-to-face visit • The practice system redesign and technology acquisition • Prospective • Risk adjusted • Laddered • Continued per visit fee-for-service (FFS) payment • Performance based component based on evidence-based quality measure reporting and patient satisfaction

12. Expanding Interest in the PCMH • Patient-Centered Primary Care Collaborative • Articles in NEJM, Health Affairs, Annals of Internal Medicine, Trade & Lay Press • Legislation • Medicaid transformation • Multi-payer/multi-player commercial plans

13. Patient Centered Primary Care Collaborative (PCPCC) • Announced May 10, 2007 • Coalition of over 250 major employers, consumer groups, professional societies, and other stakeholders • Recognizes the PCMH and need for supporting a better compensation model http://www.pcpcc.net

14. AARP AAFP AAP ACP AHQA Aetna AOA Aurum Dx Blue Cross Blue Shield Association Bridges to Excellence The Center for Excellence in Primary Care The Center for Health Value Innovation Cigna CVS Caremark Disease Management Association of America eHealth Initiative The ERISA Industry Committee Exelon Corp Foundation for Informed Medical Decision Making *Not all current members are included on this list. General Motors Health Dialogue Humana HR Policy Association IBM McKesson Corporation NACHC Nat’l Business Group on Health Nat’l Business Coalition on Health Nat’l Coalition on Health Care NCQA National Retail Foundation Pacific Group on Health Partners in Care The Roger C. Lipitz Center for Integrated Health Care, Johns Hopkins Service Employers International Union UnitedHealth Walgreens Health Initiatives Wellpoint Wyeth Xerox Endorsers of the PCPCC*

15. PCPCC Summary of Demonstration Projects

17. Medicare Medical Home Demonstration(TRHCA 2006) • Brief project description • Focus on beneficiaries with multiple chronic conditions • Includes variety of practice settings in up to eight states to be announced by 12/08 — 50 practices per region. • 2009 - practices selected and qualify for recognition status • 2010 to 2012 – demon. project implemented • Payment model • Personal physician receives care management payment • Physician still receives FFS payments • Practices receive 80% of “reductions in expenditures (above 2%) ..that are attributable to the medical home” (minus care coordination fees paid)

18. MMHD Care Management Fee • HCC score indicates disease burden • Estimate that 25% of beneficiaries with HCC > or =1.6 and Medicare costs at least 60% higher than average • First 2% of savings not shared • 80% of savings above 2% (minus fees) shared with practices

19. State Medicaid Innovation • As of Nov, 2008…31 states engaged inefforts to advance medical homes for Medicaid or SCHIP program participants Source: National Academy of State Health Policy (NASHP)

20. Map of Private Payer PCMH Demonstration Projects

21. Challenge: What Does it Co$t? • Varying Assumptions… “apples to oranges” comparisons • Future of Family Medicine 2004: Transition costs of $23,000 - $90,000 per physician* • $15 PMPM for patients with chronic conditions • Michael Bailit—review of PCMH estimates $3.00 - $9.00 pmpm** • Deloitte Analysis*** • Initial investment of $100,000/FTE • On-going expenses of $150,000/FTE *http://www.annfammed.org/cgi/reprint/2/suppl_3/s1 ** mbailit@bailit-health.com ***Deloitte: The Medical Home, Disruptive Innovation for a New Primary Care ModelAccessed at:http://www.deloitte.com/dtt/cda/doc/content/us_chs_MedicalHome_w.pdf

22. Challenge: What Does it Co$t? • Ambulatory ICU: $40-50 PMPM for primary care – but assumes more complex patients* • AMA RUC Evaluation for Medicare Medical Home Demonstration ** • Tier 1 $25 pmpm Tier 2 $35 pmpm Tier 3 $50 pmpm • ACP/Commonwealth “Costing the Medical Home Study” – Report Fall 2008 • Assess the incremental cost of building the medical home based on NCQA PPC-PCMH framework * Mathematica—Medicare Medical Home design paper ** http://www.ama-assn.org/ama/pub/category/18531.html

23. Financing PCMH Services • International & U.S. data demonstrate relationship between primary care and improved outcomes/reduced cost • Each 1% increase in primary care associated with decrease of 503 admissions, 2968 ED visits, 512 surgeries* • Medicare Beneficiaries assigned to Medical Homes—estimated saving $194 billion over 10 years.** *Kravet, S et al: Health Care Utilization and the Proportion of Primary Care Physicians. Amer J of Medicine, 2008; 121:142-148. ** Schoen et.al Bending the Curve. Commonwealth Fund 2007

24. Financing PCMH Services • North Carolina Community Care Program • Savings FY 2005 $ 77-85 million • Savings FY 2006 $ 154-170 million http://www.pcpcc.net/content/north-carolina-community-care-press-release

25. Financing PCMH Services • Primary Sources of Savings • Reduced unnecessary hospitalizations • Reduced hospital readmissions • Reduced unnecessary ER use • Decreased unnecessary specialty referrals • Increased efficiency in laboratory and diagnostic test expenditures • Increased efficiency in drug expenditures

26. Update of CSS PCMH Activities • Develop details regarding the relationship between the PCMH and subspecialty practices in the following areas: • Referral issues, • Designation/transition issues, • Issues related to situations in which the subspecialty practice provides most of the care coordination • Information flow issues • responsibility issues.

27. http://www.acponline.org/running_practice/pcmh/