Cost of Doing Business as a Patient
Centered Medical Home
Colorado Primary Care Collaborative
Steering Committee
November 11, 2014
Dave N. Gans, MSHA, FACMPE
Senior Fellow, Industry Affairs
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.
About MGMA
Since 1926 the Medical Group Management Association (MGMA)
has been the leading association for medical practice
administrators and executives. MGMA assists practices improve
performance with education, advocacy, networking opportunities,
and robust performance information. Through its industry-leading
ACMPE Board Certification and Fellowship programs, MGMA
advances the profession of medical practice management.
Through its national membership and 50 state affiliates, MGMA
represents more than 33,000 medical practice administrators and
executives in practices of all sizes, types, structures and
specialties. MGMA is headquartered in Englewood, Colo., with a
Government Affairs office in Washington, D.C.
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Learning Objectives
This session will provide you with the knowledge to:
1. Describe the functions associated with patient centered
care that transform a traditional primary care practice into
a PCMH
2. Describe how the financial performance and staffing in a
PCMH differs from a nonPCMH primary care practices
3. Describe the proposed Medicare Chronic Care
Management program described in the 2015 Medicare
Fee Schedule
What do you want to accomplish with today's presentation?
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Learning Objective 1
Describe the functions associated with
patient centered care that transform a
traditional primary care practice into a
PCMH
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.
What Is a Patient Centered Medical Home?
The Patient-Centered Medical Home is an approach to
providing comprehensive primary care for children, youth
and adults. The Patient-Centered Medical Home is a
health care setting that facilitates partnerships between
individual patients, and their personal physicians, and
when appropriate, the patient’s family
AAFP, AAP, ACP, AOA
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
What Changes When a Primary Care Practice
becomes a PCMH
Transforming a primary care practice to a PCMH requires:
• The practice’s EHR is used not only for its medical record
capabilities but also as a quality tool and to schedule
preventive services for individual patients
• Patient registries are used to evaluate and improve the health
status of patient populations
• Hours are expanded to facilitate patient access
• Electronic communications with patients is common
• Patient education and patient self management of chronic
disease is emphasized
• The patient and family are engaged to accept personal
responsibility for care
Each of these changes incurs a cost for the PCMH practice
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Examining the Costs of Becoming a PCMH
• Application to the accrediting / recognition organization
• Additional infrastructure costs
– Enhanced electronic health record and registries
– Enhanced telecommunications
– Larger clinical facilities to accommodate new providers
and functions
• Additional personnel and services costs
– Nutrition counseling
– Patient education
– Care coordination for referrals and post hospital
discharge
– Chronic care management
– Mental health counseling
– Expanded access
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Transforming a Primary Care Practice into a
PCMH
MGMA Patient-Centered Care: 2012 Status and Prospects
Report
• Electronic questionnaire of MGMA members and customers
in February 2012
• 1,257 responses primary, multispecialty and specialty care
practices.
• Responses represent 29,302 primary care and specialty
physicians
• Of the 657 primary care practices completing the study, 244
respondents identified their organization as a PCMH.
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Functions Associated with Patient-Centered
Care Delivery
Practice Functions Associated with Patient Centered Care
Currently Provided by PCMH and NonPCMH Primary Care
Practices
Exchanges clinical information electronically
with hospitals**
Exchange clinical information electronically
with referral physicians**
Involves patients and family members in
shared decision making abou their care*
Uses chronic disease registries to conduct
population mangement **
Develops and documents self-management
care plans prepared in collaboration with…
Has multidisciplinary care teams collaborating
with a primary care clinician**
Has a care coordinator manage high-risk
patients*
0.0%
Primary Care Practices Not a PCMH
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
44.4%
56.3%
40.3%
57.6%
67.0%
83.0%
28.9%
65.3%
26.0%
67.0%
15.3%
59.0%
8.0%
44.0%
20.0%
40.0%
60.0%
80.0%
PCMH Primary Care Practices
100.0%
Learning Objective 2
Describe how the financial performance
and staffing in a PCMH differs from a
nonPCMH primary care practices
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.
Key Performance Indicators for Medical
Practices
Key Performance Indicators
• Total support staff cost
• Total general operating cost
• Total operating cost
• Total medical revenue
• Total provider cost
• Total cost
Apples to apples
• Per FTE physician
• Per patient
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Issues in Studying PCMH Costs
• Different parties perceive costs in different ways
• The costs to the practice are not the same as costs to
an insurance company
• What it costs to be a PCMH is not the same as what
payers are willing to pay
• Costs typically are experienced in the practice while
savings generally benefit the insurance company
• The start up costs to become a PCMH are very different
from the operational costs of being a PCMH
• Different practices have different starting point
• Few reliable cost estimates for what it really costs to be a
PCMH
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
How Expenses Changed as a Result of
Becoming a PCMH
The Patient Centered Care - 2012 Status and Needs Study
Clinical facilities (building and
occupancy costs)
27.3%
Medical supplies
24.6%
Medical equipment
24.4%
Information technology
69.5%
0%
20%
40%
60%
80%
100%
Percentage of respondents answering "Mild increase" or "Considerable increase“
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
How Staffing Changed as a Result of
Becoming a PCMH
The Patient Centered Care - 2012 Status and Needs Study
Administrative staff (e.g., medical
records technicians, front office…
44.6%
Other clinical staff (e.g., LPNs,
medical assistants, etc.)
55.0%
Registered nurses
40.8%
Non-physician providers
43.2%
Physicians
19.3%
0%
20%
40%
60%
80%
100%
Percentage of respondents answering "Mild increase" or "Considerable increase“
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
PCMH Cost Comparisons
MGMA Cost Survey – 2014 Report based on 2013 Data
Cross sectional comparison of physician
owned primary care practices
– 21 PCMH
– 36 Not a PCMH
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
PCMH Revenue and Expenses per FTE
Physician
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
PCMH Expenses per FTE Physician
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
FTE Staff per FTE Physician
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
FTE Staff per FTE Physician
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
PCMH Productivity per FTE physician
PCMH
• Median Panel Size:
• Median Work RVUs:
• Median Square Feet:
Not a PCMH
2,400
2,063
6,447
5,007
1,827
2,008
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Revenue and Cost per Patient per Year in
Physician-Owned Primary Care Practices
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Revenue and Cost per Patient per Month in
Physician-Owned Primary Care Practices
Source: MGMA Cost Survey: 2014 Report Based on 2013 Data
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Learning Objective 3
Describe the proposed Medicare Chronic
Care Management program described in
the 2015 Medicare Fee Schedule
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.
Proposed Medicare Payment for Chronic
Care Management Services
2015 Medicare Fee Schedule Final Rule
• “As we discussed in the CY 2013 PFS final rule with
comment period, we are committed to supporting
primary care and we have increasingly recognized care
management as one of the critical components of
primary care that contributes to better health for
individuals and reduced expenditure growth (77 FR
68978).”
• “In the CY 2014 PFS final rule with comment period, we
finalized a policy to pay separately for care management
services furnished to Medicare beneficiaries with two or
more chronic conditions beginning in CY 2015 (78 FR
74414).”
Federal Register Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical
Laboratory Fee Schedule & Other Revisions to Part B for CY 2015, Pages 442 – 496 http://federalregister.gov/a/2014-26183
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Creating CPT 99490, Chronic Care
Management Services
• CPT code 99490 (Chronic care management services)
at least 20 minutes of clinical staff time directed by a
physician or other qualified health care professional, per
calendar month, with the following required elements:
– Multiple (two or more) chronic conditions expected to
last at least 12 months, or until the death of the
patient;
– Chronic conditions place the patient at significant risk
of death, acute exacerbation/decompensation, or
functional decline;
– Comprehensive care plan established, implemented,
revised, or monitored
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Payment for CPT 99490
• The CY 2015 Physician Fee Schedule Conversion
Factor for Jan. 1, 2015 through March 31, 2015 is
$35.8013
• CMS has established a payment rate of $40.39 for CCM
that can be billed up to once per month per qualified
patient
http://www.cms.gov/Newsroom/MediaReleaseDatabase/
Fact-sheets/2014-Fact-sheets-items/2014-10-31-7.html
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Additional Billing Requirements for CPT
99490
• Inform the beneficiary about the availability of the CCM
services from the practitioner and obtain his or her
written agreement to have the services provided
• Document in the beneficiary’s medical record
• Provide the beneficiary a written or electronic copy of the
care plan and document in the electronic medical record
that the care plan was provided to the beneficiary.
• Inform the beneficiary of the right to stop the CCM
services at any time (effective at the end of a calendar
month) and the effect of a revocation of the agreement to
receive CCM services.
• Inform the beneficiary that only one practitioner can
furnish and be paid for these services during the
calendar month service period.
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
What should a PCMH do now to prepare
for the future?
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.
PCMH Costs vs. Payment
• Practices devote considerable time, talent, and resources
to become a PCMH
• Practices do not ration PCMH services to specific patients
which means all patients receive the benefits of the PCMH
and not just beneficiaries of particular insurance plans
• Unfortunately, PCMH costs are unrelated to the amount, if
any, that a practice is paid for being a PCMH
• A PCMH will reduce costs for the insurer, but increase
practice expenses
• Optimizing practice performance as a PCMH without an
increase in payment or shared savings may affect overall
profitability
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
In the Future, the Successful Practice
Will Balance Value and Costs
• Both financial and nonfinancial metrics are
needed
• Payment and quality
incentives should be the
basis for quantifiable
metrics
• The practice’s information
system will need to
aggregate data from
multiple sources and time
periods
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.
Quality
Revenue
Satisfaction
30
In the Future Healthcare Environment
You Will Need the “Right Stuff”
The future competitive environment of accountable care will
reward practices who have:
• Lower utilization
• Better quality
• Better patient satisfaction
• Better patient outcomes
• Lower cost to the insurer
Which perfectly describes the Patient-Centered Medical
Home
Copyright 2014. Medical Group Management Association® (MGMA®). All rights reserved.
Are there any questions?
David N. Gans, MSHA, FACMPE
Senior Fellow Industry Affairs
Medical Group Management Association
dgans@mgma.org
303.799.1111 x1270
Copyright 2013. Medical Group Management Association® (MGMA®). All rights reserved.