N.Y. Initiative Couples Payment and Practice Reform

A medical home pilot project under way in New York state is the first such pilot in the country to link primary care practice reform with fundamental changes in physician payment methodology.

Data gathered from the project could "ultimately -- hopefully -- save primary care," according to Brian Morrissey, VP of strategy and development for the Capital District Physicans' Health Plan Inc., or CDPHP. The physician-founded and physician-governed health plan based in Albany, N.Y., initiated and is funding the pilot.

Three high-functioning primary care practices have signed on as project participants. All three currently are using robust electronic health record systems and are located near Albany. Nearly 75 percent of the physicians in those practices are FPs.

The pilot will measure practice outcomes in the areas of

Those involved with the pilot also hope that lessons learned will lead to improved recruitment and retention of primary care physicians in the state.

Morrissey said the health plan's board of directors was convinced that fee-for-service and resource-based relative-value scale reimbursement -- also called volume-based payment -- "are at the core of the demise of primary care." It was important for the health plan to "find a way to reimburse the primary care physician the right amount for the right level of care," added Morrissey.

The CDPHP enlisted Allan Goroll, M.D., an internist and professor of medicine at Harvard Medical School and Massachusetts General Hospital in Boston, to help implement a payment model that he and three other physicians had developed. Goroll is lead author of "Fundamental Reform of Payment for Adult Primary Care: Comprehensive Payment for Comprehensive Care," (6-page PDF; About PDFs) a paper that summarizes the comprehensive payment model. The paper was published in the March 2007 issue of the Journal of General Internal Medicine.

In an interview with AAFP News Now, Goroll described the payment model as "risk-adjusted comprehensive payment for comprehensive care." The model calls for risk-adjusted outcomes-based bonuses that could constitute up to 25 percent of a physician's base pay.

The risk-adjustment element provides an incentive to physicians to take on even the sickest of patients, which physicians sometimes are reluctant to do under current payment systems, said Goroll. He added that risk adjusters are working during the 6-month start-up phase to develop a methodology that will adjust medical outcome goals based on "how sick and needy the patient is to start with." That methodology will kick into gear when physicians receive payment under the pilot beginning in January 2009.

Another unique component of the pilot is CDPHP's willingness to make the project an "all-patient demonstration," said Goroll. Basically, CDPHP "stepped up to the plate and said 'We'll implement your model for all patients in these practices, irrespective of their payer.'" So the payment model covers all patients in the practices rather than just the roughly 35 percent who currently are covered by CDPHP. It also will include patients covered by Medicare and Medicaid.

A major concern for Goroll and others associated with the pilot is that hastily written federal legislation currently in the pipeline relies on a payment system that already has failed primary care. "Piecemeal payment for every little thing was anathema to the overall objective of comprehensive care that's personalized and cost effective," said Goroll.

FP Anthony Marinello, M.D., of Albany, N.Y., represents CapitalCare Family Practice, which is one of the three pilot practices. He said he and his colleagues want to see primary care survive. That desire pushed the group to jump into the pilot. "We realized that if we don't change the way primary care medicine is practiced, we're going to have a significant shortage of primary care physicians," he said.

Medical students in New York often choose other medical specialties because they say they can't afford to practice primary care, added Marinello.

Although compensation is one piece of the puzzle, Marinello said he's most excited about the prospect of spending more face-to-face time with patients who are at high risk for chronic diseases, such as diabetes and heart disease. Team-based care -- one of the features of the medical home model -- means mid-level providers will see patients with simpler medical issues, freeing physicians to see patients requiring a higher level of care.

"We anticipate some bumps in the road," said Marinello. "It's going to take some time and a lot of patient education," especially for patients accustomed to always seeing their physician, but in the end, we should see better patient outcomes. "Ultimately, that's our goal."

TransforMED, the Academy's practice redesign initiative, will support the pilot practices as they strive to receive recognition as NCQA level-three patient-centered medical homes, said Terry McGeeney, M.D., M.B.A., TransforMED's president and CEO.

The initiative provides the first opportunity for TransforMED facilitators to work under contract to assist physician practices outside of TransforMED's recently completed two-year medical home pilot project.

"There are no productivity issues" under this payment model because physicians are not paid based on how many patients they see a day, said McGeeney. Fair compensation for the care physicians provide means "they'll be able to do the care coordination, e-visits, and all of those kinds of things that right now physicians are saying they don't have time to do and don't get compensated to do," he added.