Colorado Primary Care Practice Succeeds With Medicare Advantage

July 12, 2016 10:32 am Michael Laff

A primary care practice in Colorado that dropped traditional Medicare in favor of Medicare Advantage said the change resulted in fewer administrative headaches, greater reimbursement and improved health outcomes.

Thomas Jeffers, M.D., a family physician in Arvada, Colo., consults with a patient in his office. New West Physicians, where Jeffers practices, has dropped traditional Medicare in favor of Medicare Advantage.

Founded in 1994, New West Physicians(www.nwphysicians.com) in metropolitan Denver is the largest primary care practice in Colorado. Of its 100 primary care health professionals, 70 are physicians, and the practice cares for an estimated 200,000 patients. In 1999, the practice stopped accepting Medicare but continues to accept Medicare Advantage and fee-for-service commercial insurance.

Thomas Jeffers, M.D., a family physician at New West's Arvada office, told AAFP News that before the change, Medicare receivables were running 90 days behind and reimbursement was too low. He said the potential for increased revenue in Medicare Advantage combined with the heavy demands of traditional Medicare billing sparked the change.

The practice informed patients 12 months before dropping traditional Medicare, and physicians were available to answer questions about the change. Jeffers gained a new task during the transition, as well.

Story Highlights
  • In 1999, New West Physicians in Colorado stopped accepting traditional Medicare but continues to accept Medicare Advantage and fee-for-service commercial insurance.
  • Medicare Advantage now accounts for 30 percent of patient visits and 55 percent of practice revenue.
  • A family physician at the practice said the change has resulted in less administrative hassle, higher reimbursement and better patient care.

"Now I'm a salesman asking the patient to make a change in his insurance designation," Jeffers recalled of the initial conversations. "I gave a five-minute speech about why Medicare Advantage was better for the patient and me."

Jeffers said that for patients who remained skeptical, he discussed his role as a care manager with an eye on costs.

"I tell patients, 'With my expertise, I can help you get better clinical outcomes and get you through the health care delivery system in a more cost-effective way than you can,'" he said.

Patients who were covered by Medicare could remain in the practice by enrolling in a local HMO or a Medicare Advantage plan. For those who wished to keep traditional Medicare coverage, the practice offered a list of other physicians they could see. Jeffers said it was difficult to part with them, but the practice wanted to help everyone during the transition.

After all was said and done, about 85 percent of the practice's patients agreed to switch to a Medicare Advantage plan with no additional premium.

Now Medicare Advantage accounts for 30 percent of patient visits and 55 percent of revenue at New West. On the commercial side, the practice is under contract with insurers in an accountable care organization (ACO) payment model. Jeffers said the practice receives more than $25 in per-member, per-month payments from insurers. New West assumes all risk for professional services and shared risk on hospital visits. Any surplus revenue in hospital risk is shared with insurers in the pool.

According to Jeffers, he has the same responsibility as an insurer to control costs.

"In medicine, if you do right thing for the patient the first time and follow the latest standards of care, then the patient gets better care, the physician gets paid more, and the insurance company makes more money," he said.

One of the frustrations with Medicare billing was the burden of documenting steps to provide adequate care. If a patient with chronic obstructive pulmonary disease or heart failure came in without a current complication, for instance, Jeffers might not meet Medicare standards to bill for a 99214 office visit even though he might spend 30 minutes consulting about the patient's latest symptoms.

Because New West physicians are evaluated on reducing costs, they also act as educators, teaching patients not to go to the ER for minor ailments or to consult specialists on their own. The physicians also need to be careful about ordering procedures. Jeffers occasionally makes house visits because it is often better for the patient and much cheaper than a hospital visit. Extended office hours are provided at the family medicine clinics: from 7 a.m. to 7 p.m. during the week and from 8 a.m. to 4 p.m. on Saturday.

"As physicians, we have to think like an insurance company," he said. "I want to be in alignment with them (the insurers), and we should get some of the benefits when costs are reduced."

Jeffers acknowledged that a practice that wants to make such a change needs to have enough infrastructure to do so successfully.

New West has its own team of hospitalists and conducts regular monitoring of patients at home and in post-acute care settings to prevent hospital readmissions. Patients are free to choose a hospital but they are encouraged to visit one of five where the practice has round-the-clock hospitalist coverage. A health professional calls all patients within 24 hours after they are discharged from a hospital.

The effort pays off. Among Medicare patients who are discharged from a hospital, the national readmission rate within 30 days is 18 percent. Among New West patients, the figure is 6.1 percent, said Jeffers.

In the office, a physician assistant or a nurse practitioner sees patients with minor ailments and spends an hour and a half each day obtaining lab results, coordinating with specialists and talking with patients by phone. That frees Jeffers to spend most of his day meeting with more complex patients.

"Medicare Advantage allows for a risk adjustment factor," he said. "If you take care of more complex patients, then you can receive more money. The capitation environment accounts for that complexity so you can give a patient all the time and attention they need. I can spend more time with more complex patients and not worry about the fee."

Jeffers said his salary has increased by 15 percent since the practice converted to Medicare Advantage. Before the change, he saw about 25 patients per day. Now his daily volume is 16 patients.

New West has been recognized by several agencies for its success. One report detailed how the practice was able to control costs that can be difficult to manage.

"Despite the lack of formal clinical integration with hospitals and medical specialists, New West has substantial control over hospital stays and the use of specialty practices," said a report(www.aha.org) about the practice that was commissioned by the American Hospital Association. "Additionally, New West does not suffer a loss of income as care practices are streamlined and hospital and specialist costs are reduced."

The practice won the AMGA's (formerly the American Medical Group Association) 2015 Acclaim Award for practice improvement.

"We have demonstrated quality that is higher than the national norm, and our cost is less," Jeffers said.

Physicians in the practice occasionally discuss participating in Medicare again as an ACO with risk-sharing but have so far declined. The Medicare Shared Savings Program offers only limited benefits and has a flawed patient attribution model in their view, while patient attribution in Medicare Advantage is more transparent and voluntary.

Related AAFP News Coverage
Robert Graham Center Research
Avoidable Hospital Admissions Drop With Medicare Advantage
(5/17/2016)

Additional Resource
CMS: How do Medicare Advantage Plans Work?(www.medicare.gov)


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