Medicare Physician Group
Practice Demonstration
Overview & Lessons Learned
John Pilotte
Director, Division of Payment Policy Demonstrations
Office of Research, Development and Information
Centers for Medicare & Medicaid Services
Academy Health Annual Research Meeting
Chicago, Illinois June 29, 2009
Value Based Purchasing
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Momentum for rewarding performance
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Advancing concepts in new programs and
demonstrations
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Incentives for improving quality and efficiency
Institutional providers
Physician practices
Bundled payment
Challenges
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Diverse & unique needs of aged, disabled and ESRD
44 million beneficiaries, 700,000 physicians, etc.
Fragmented care
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PGP Demonstration Overview
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Section 412 of BIPA 2000 (P.L. 106-554)
No change in Medicare FFS payments
Performance payments earned from savings from
patient management
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Payments linked to financial & quality performance
Quality assessed using 32 ambulatory care measures
10 physician groups representing 5,000 physicians &
220,000 Medicare FFS beneficiaries
3 year demonstration
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Extended to 5 performance years
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Selection Criteria
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Multi-specialty practices with 200+ physicians
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Well developed information, clinical and management
systems
Organizational structure
Leadership and management
Financial stability
Quality assurance
Process and outcome improvement
Implementation strategy
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Physician Group Practices
Source: RTI International
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Assigned Patient Population
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No lock-in or enrollment
Retrospective annual assignment
Plurality of office or other outpatient E&M
services allowed charges
Accountable for total Part A & Part B
expenditures
Incentives to standardize care processes
across all patients and all payers
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Patient Population Characteristics
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Patient populations range 10,035 to 37,026 per PGP
Assign 43% to 73% of patients with visit at PGP
Assigned patients average five to seven visits
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20% to 25% of assigned patients are hospitalized
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PGP accounts for 74% to 90% of total office or other
outpatient E&M allowed charges
4% have three or more hospitalizations
27% have three or more HCCs
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11% have five or more HCCs
Diabetes, CHF, COPD, heart arrhythmias most common
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Shared Savings Model
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No upfront payment or insurance risk
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Savings is a function of expenditure control and health
status changes
Total Medicare risk adjusted expenditure growth rate is
more than 2 percentage points below target growth rate
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Share up to 80% of savings
50/50 based on quality and financial performance
Local market area used to set target growth rate
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Business risk for PGP
Counties with 1% or more of assigned patients
91% of assigned patients live in local market area
Maximum performance payment capped at 5% of Part A
and Part B target
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Quality Measures
Diabetes Mellitus
Congestive Heart Failure
Coronary Artery
Disease
Hypertension
& Cancer Screening
HbA1c Management
LVEF Assessment
Antiplatelet Therapy
Blood Pressure Screening
HbA1c Control
LVEF Testing
Drug Therapy for Lowering LDL
Cholesterol
Blood Pressure Control
Blood Pressure Management
Weight Measurement
Beta-Blocker Therapy – Prior MI
Blood Pressure Plan of Care
Lipid Measurement
Blood Pressure Screening
Blood Pressure
Breast Cancer Screening
LDL Cholesterol Level
Patient Education
Lipid Profile
Colorectal Cancer Screening
Urine Protein Testing
Beta-Blocker Therapy
LDL Cholesterol Level
Eye Exam
Ace Inhibitor Therapy
Ace Inhibitor Therapy
Foot Exam
Warfarin Therapy
Influenza Vaccination
Influenza Vaccination
Pneumonia Vaccination
Pneumonia Vaccination
Claim s based m easures in italics
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Care Management Strategies
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Not prescriptive
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Flexibility to redesign care and improve quality
Develop/expand care management initiatives
Reduce avoidable admissions, ER visits, etc.
Facilitated by health information technology
Focus on care transitions, provider based
chronic care management, palliative care
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Lessons Learned
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Leadership, clinical champions and dedicated resources critical
Measures should be consistent with clinical practice and high
quality care and have physician/provider buy-in
Defined methodology and education and outreach critical
Changing measures frequently creates provider angst
Measuring quality creates opportunity to standardize processes
and redesign workflows to improve delivery at point of care
Providers volunteer to get early experience with initiatives
consistent with their strategic visions and market objectives
Demonstration findings and methodologies are being used to
shape overall program policy
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PQRI group practice reporting option
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Lessons Learned
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Reducing expenditure growth challenging
Difficult to link savings to specific interventions
Measuring savings is highly sensitive to target setting
methodology, risk adjustment, demo population size
Administrative, clinical, data (EHR) and financial
integration appears necessary (but not sufficient) to
produce savings
Small financial incentives can change behavior
Incentives for improvement and attainment may help
maintain interest and support
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