From the President

Investments in Medical Home Model Starting to Pay Dividends

November 08, 2011 05:30 pm Glen Stream, M.D., M.B.I.

It has been five years since the AAFP adopted a policy stating that every American should have a "personal medical home." In the years since then, the Academy has championed the idea of the patient-centered medical home, or PCMH, with the belief that the PCMH model improves outcomes and lowers health care costs.

[Glen R. Stream, M.D., FAAFP, MBI]

AAFP President Glen Stream, M.D., M.B.I.

Although many of you have started -- and in some cases completed -- the long process of transforming your practices into officially recognized medical homes, some of you have decided that the necessary time, money and effort make it too daunting a task relative to an uncertain financial benefit. In short, you want assurances that your sizable investment will pay off.

Recent events, however, indicate that becoming a PCMH may be an investment worth making:

  • Maryland's Multi-payer PCMH Program has distributed about $3 million in its first payment to 54 participating primary care health professionals. Of that total, $2.1 million came from private payers, and $900,000 came from the state's Medicaid program, according to a recently published report(
  • Earlier this year, six health plans paid $1.5 million to 236 primary care physicians( from 11 practices in New York's Hudson Valley after those practices achieved PCMH recognition from the National Committee for Quality Assurance.

Skeptics could say these are isolated examples with unnamed docs. Fair enough. Let me tell you about an e-mail I recently received from former AAFP President Jim King, M.D., of Selmer, Tenn., on this very subject. He told me that his practice of seven physicians has received $114,000 in incentive payments this year: $34,000 from CMS' Physician Quality Reporting Initiative, or PQRI; $35,000 for electronic prescribing, or eRx; and $45,000 in primary care incentive program payments.

King also expressed concern that PQRI and eRx incentives are beginning to decline, and primary care bonus payments are scheduled to stop after 2014. The important thing to remember, however, is that as these programs are phased out, new opportunities keep coming. When they do come along, it's important to be ready.

For example, last month, CMS and its Center for Medicare and Medicaid Innovation announced the launch of the Comprehensive Primary Care Initiative, or CPCI. CMS plans to collaborate with commercial and state health insurance plans to support primary care practices that deliver coordinated and seamless care.

The program will blend fee-for-service payments with a risk-adjusted per-patient, per-month care-coordination fee that ranges from $8 to $40. Participating practices also will have the opportunity to share in savings resulting from the program. This payment model is what the AAFP has been advocating for some time to reward physicians for coordinating and managing patient care within the PCMH.

In response to the announcement of this plan, AAFP staff members met with America's Health Insurance Plans, or AHIP -- the national trade association that represents health insurance companies -- recently. During that meeting, AHIP representatives said that the organization intends to encourage its members to apply to participate in the CMS initiative.

The Academy also has sent letters to each of the nation's major health insurance plans, encouraging them to participate.

CMS will be responsible for recruiting 75 primary care practices in as many as seven markets for the initial phase of the CPCI, with practices applying to participate in spring 2012. The blended payment model will be used for these practices' Medicare and Medicaid patients, as well as patients enrolled in participating private insurance plans.

The program will be limited to practices that already have achieved Level 3 NCQA recognition and have met meaningful use standards for electronic health records. These requirements reinforce the need for us to transform our practices and to be prepared to participate in such programs.

Although the first phase of this initiative will be limited in scope, CMS officials told me in a meeting recently that they are eager to rapidly and broadly expand the program once it has been shown to reduce costs and improve quality -- which it almost certainly will.

Even if you live in an area that is not initially selected for the CPCI, other PCMH pilots from health plans and state Medicaid agencies are likely to use similar formats.

The bottom line is that making the changes necessary to earn PCMH recognition will result in enhanced revenue in the future. Some of you have asked the Academy to show you the money when it comes to the medical home model. The money is coming. Will you be ready to act when opportunity knocks?