Brookings Institution Briefing

Panel Evaluates New Payment Models, Offers Fresh Ideas

February 05, 2015 06:55 pm Michael Laff Washington, D.C. –

A panel of physicians and other key players said new payment models that are being introduced around the country will succeed only if they support primary care and improve care coordination.

(From left) Tom Lewandowski, M.D., of Appleton Cardiology ThedaCare, AAFP Board Chair Reid Blackwelder, M.D., and Robert Berenson, M.D., a fellow at the Urban Institute, participate in a panel discussion on physician payment reform at the Brookings Institution in Washington.

The Brookings Institution recently hosted a discussion( about payment reform that brought together physicians, insurance representatives and employers. Panelists discussed new ideas that are already taking hold in several states and with private employers and they suggested others that could be adopted.

The patient-centered medical home (PCMH) received broad support. Other new payment models, such as so-called per member per month payments, received mixed reviews.

AAFP Board Chair Reid Blackwelder, M.D. of Kingsport, Tenn., participated in the discussion. He emphasized that payment models need to be designed to improve care and allow small physician practices to endure.

"A PCMH is more than a practice," Blackwelder said. "It has to be a medical neighborhood. Small practices still have to be able to do what they do, and we need them to do what they do."

Story Highlights
  • A panel of physicians and other professionals recently weighed in on new physician payment models, saying such models should be designed to maintain the relationship between patients and primary care physicians.
  • According to panel member and AAFP Board Chair Reid Blackwelder, M.D., of Kingsport, Tenn., payment models must improve care and allow small physician practices to endure.
  • Panelists also noted that new payment models are being evaluated after only one year, but that's not enough time to gauge success.

Blackwelder said primary care physicians welcome new types of payments, but he cautioned that the billing procedures tied to those payments need to be streamlined.

"There is a new chronic care management fee, and that's great," he said. "I'm getting paid to do something I was already doing with my patients, but I'm spending too much time on documentation that is taking time away from caring for patients. The benefits will pay off, but I have to jump through hoops."

The discussion also addressed improving care coordination among primary care physicians and specialists. The panelists said primary care physicians should be kept apprised of developments with their patients, especially when they are admitted to a hospital.

"It's almost criminal that a primary care physician doesn't know that a patient is in the hospital," said Kelly Conroy, CEO of Triple Aim Development Group, which works with accountable care organizations (ACOs) and similar groups to optimize their performance. "We should require that hospitals notify the primary care physician, and we'd be a lot better off."

In many cases, a patient who is diagnosed with a chronic illness visits only a specialist and stops consulting his or her primary care physician. Panelists agreed that the specialist should refer the patient back to primary care to adjust medications, if needed, and maintain patient engagement.

Also During the Briefing

Don't miss AAFP News coverage of two federal lawmakers' take on reforming Medicare payment during this legislative session of Congress.

Panelists focused on one state that is moving rapidly away from the traditional fee-for-service model. Since 2009, physicians in Michigan's Blue Cross Blue Shield (BCBS) plan have been ineligible for a fee increase unless they participate in an alternative payment system, such as a medical home. Instead, they are paid on a tiered fee structure that ranges from 100 to 130 percent of their base fee.

Michigan has 4,400 primary care physicians participating in medical homes -- 70 percent of all the state's primary care physicians. Hospital admission rates have fallen 27 percent, according to Thomas Simmer, M.D., senior vice president and chief medical officer for Michigan BCBS.

"The problem with fee-for-service is it's always the same fee regardless of what you accomplish," said Simmer. And when performance is not recognized, medical professionals seek to reduce the costs of services for which they are reimbursed. Consequently, "There is a failure to invest in services that reduce hospitalizations," he said.

One panelist described how a large employer, Intel, changed its health benefits package for employees in New Mexico. Employees were given the choice of opting in to an ACO, and 60 percent did so. During the first year, all of the company's health outcome goals were met, but costs rose.

That's not unexpected, said Alice Borrelli, director for global health and workforce policy at Intel. "During the first year, you don't lower costs," she said. You make sure everybody gets primary care first."

Overall, the panelists noted that new payment models are often judged after just one year, much too short a time to evaluate overall patient health. After all, said Blackwelder, "The foundation of primary care is not something you can measure in a year."

But not all physicians are convinced that value-based payments will be effective across the medical spectrum. Tom Lewandowski, M.D., a cardiologist at Appleton Cardiology ThedaCare in Wisconsin, warned of the possible consequences of moving primary care physicians to a value-based payment while subspecialists continue on with fee-for-service.

The monthly per member payment could eventually become a fee-for-service as well, Lewandowski said. He warned that measurements should focus on care that improves health because "no one is measuring what you don't pay for."

Lewandowski acknowledged that discussions about team-based care and value payments show that medical professionals are ready to cooperate with each other.

"We have to help family physicians and advanced-practice clinicians and that costs money," he said. "Not everybody lives near a center of excellence."

Robert Berenson, M.D., a fellow at the Urban Institute, noted that the current Medicare physician fee schedule should be revised because fee-for-service will continue to be a mainstay of physician payment. He suggested creating a CPT code for preventive services.

"I don't think all services can be paid by fee-for-service," Berenson said, noting the difficulty of billing for office visits after hours, telephone and email contact with patients.