Model With Incentives, No Penalties, Proves Popular

Insurance Industry Officials Speak to AAFP Board of Directors

March 04, 2016 04:33 pm Michael Laff Washington, D.C. –

A patient-centered medical home model that offers financial incentives but wields no penalties has proved popular with physicians, an insurance executive told the AAFP Board of Directors here last week.

Marie-Elizabeth Ramas, M.D., the AAFP new physician board member, and Chet Burrell, President and CEO of CareFirst BlueCross BlueShield, discuss the incentives that CareFirst offers participating physicians.

Chet Burrell, president and CEO of CareFirst BlueCross BlueShield, described how the model has both engaged physicians and reduced expensive procedures.

Although the insurer's medical home model is strictly voluntarily, Burrell said 90 percent of the plan's 4,400 physicians around the District of Columbia, Maryland and Virginia are participating. The program, which began in 2011, covers 3.4 million individuals.

Physician groups that join the program receive a 12 percent participation fee each year regardless of performance. The initiative includes no penalties or risks for physicians, Burrell said, and it treats patient consults conducted online the same as office visits. In 2014 the average practice in the program received an additional $41,000 in revenue in addition to the participation fee, Burrell told the Board.

Burrell understands why physicians may be reluctant to enter into contracts with shared risk, which is why CareFirst's medical home does not reduce payments for average or low performance scores.

Story Highlights
  • CareFirst BlueCross Blue Shield offers a plan that includes financial incentives to primary care physicians, but does not include penalties, an insurance official told the AAFP Board of Directors last week.
  • About 90 percent of the physicians who participate with CareFirst have joined the plan.
  • The Board also heard an update from America's Health Insurance Plans.

"No physician in his right mind ought to take insurance risk," he said.

Burrell emphasized that the plan offers shared savings to primary care physicians, but not to hospitals or subspecialists. Using claims data, the insurer found that 75 percent of its patients have an established relationship with a primary care physician.

"We wanted to bring the incentives down to the individual primary care level," he said.

CareFirst asks primary care physicians in the program to form into groups of five to 15 physicians called "panels." Smaller groups do not produce enough data and larger ones make collaboration too difficult, Burrell said. Most panels have about nine physicians. Panels are graded using a combination of engagement, patient access and appropriate use of services. The engagement score, which carries the most weight, includes patient satisfaction and working within the medical home model.

Physicians in each panel hold monthly meetings to discuss the group's performance and compare notes. CareFirst will not drop a physician from a panel for low performance -- only in extreme cases where they refuse to cooperate with the plan -- but it will allow the panel members to address struggling practices. Given the competitive nature of physicians, Burrell said, panels motivate each practice to maintain high standards and correct any substandard performance.

CareFirst created a "patient care account" that acts as a scorecard for each patient's activity and related costs, but it is not a substitute for an electronic health record system. To help physicians with referrals, hospitals and area specialists are assigned a grade based on their cost.

Burrell said the insurer does contract with retail clinics for convenience services, but the clinics are bound by contract not to recruit patients away from their primary care physician.

Update from America's Health Insurance Plans

Physicians are adopting new payment models gradually, Carmella Bocchino, executive vice president for America's Health Insurance Plans (AHIP), told the Board in a separate presentation. There is no "magic bullet" to replace fee-for-service, she said. She told the Board she explained to CMS officials earlier that physicians need to have at least 30 to 35 percent of their patients in some kind of shared risk model before they can make a transformation away from fee-for-service.

"You have to have ROI (return on investment) and sufficient revenue to move," she said.

The move toward common performance measurements, which the Academy is helping to lead, can help. The work is sorely needed. Bocchino said representatives from 30 different health plans at a recent meeting listed hundreds of different measures and found they shared just 10 in common.

"How can a physician take care of patients if you ask him to do all of this?" she asked.

Bocchino said recent agreement on some core measurement sets from the Core Quality Measures Collaborative has brought the process to "second base." Even so, there are still an estimated 700 core measures, which she said is far too many if the goal is to streamline the process.

"If we are measuring something that is not improving a clinician's practice, then what are we doing?" she asked.

Another issue Bocchino raised was a lack of transparency regarding hospital insurance coverage that is causing frustration among patients. She recalled how one insurance industry executive visited the hospital with a spouse who needed a joint replacement. The couple asked an anesthesiologist if he accepted their insurance, and he had to leave the room to find out.

When the anesthesiologist returned he told them, "Our group takes your insurance, but I don't." So the couple asked him to send someone else.

"Consumers have to start asking these questions, but they don't know they have to ask them," Bocchino said.

Another looming issue is the 2.5 million individuals who are covered under transitional plans that do not meet standards outlined by the Patient Protection and Affordable Care Act. They generally are paying annual premiums of $800 to $1,200, but they will need to choose new plans by 2017, and that could raise their premiums to $6,000, Bocchino said. These individuals typically are younger and choose minimal coverage.

"This is the next problem we will have," Bocchino said. "But we have time to make the transition. They are healthy and are not sick, but they are distorting the risk pool."

If this group receives adequate premium subsidies through government action, their entry into the exchanges could help to lower premiums, according to Bocchino.

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