Cost of Doing Business as a Patient Centered Medical Home

1. Cost of Doing Business as a Patient Centered Medical Home Colorado Primary Care CollaborativeSteering Committee November 11, 2014 Dave N. Gans, MSHA, FACMPE Senior Fellow, Industry Affairs

2. 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. About MGMA

3. Learning Objectives This session will provide you with the knowledge to: • Describe the functions associated with patient centered care that transform a traditional primary care practice into a PCMH • Describe how the financial performance and staffing in a PCMH differs from a nonPCMH primary care practices • 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?

4. Learning Objective 1 • Describe the functions associated with patient centered care that transform a traditional primary care practice into a PCMH

5. 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

6. 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

7. 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

8. 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.

9. Functions Associated with Patient-Centered Care Delivery

10. Learning Objective 2 • Describe how the financial performance and staffing in a PCMH differs from a nonPCMH primary care practices

11. 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

12. 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 Issues in Studying PCMH Costs

13. How Expenses Changed as a Result of Becoming a PCMH The Patient Centered Care - 2012 Status and Needs Study Percentage of respondents answering "Mild increase" or "Considerable increase“

14. How Staffing Changed as a Result of Becoming a PCMH The Patient Centered Care - 2012 Status and Needs Study Percentage of respondents answering "Mild increase" or "Considerable increase“

15. 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

16. PCMH Revenue and Expenses per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

17. PCMH Expenses per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

18. FTE Staff per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

19. FTE Staff per FTE Physician Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

20. PCMH Productivity per FTE physician • Median Panel Size: 2,063 • Median Work RVUs: 5,007 • Median Square Feet: 2,008 PCMH Not a PCMH 2,400 6,447 1,827 Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

21. Revenue and Cost per Patient per Year in Physician-Owned Primary Care Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

22. Revenue and Cost per Patient per Month in Physician-Owned Primary Care Practices Source: MGMA Cost Survey: 2014 Report Based on 2013 Data

23. Learning Objective 3 • Describe the proposed Medicare Chronic Care Management program described in the 2015 Medicare Fee Schedule

24. 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

25. 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

26. 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

27. 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.

28. What should a PCMH do nowto prepare for the future?

29. 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

30. In the Future, the Successful Practice Will Balance Value and Costs • Quality • Both financial and non-financial 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 30

31. 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

32. Are there any questions? David N. Gans, MSHA, FACMPE Senior Fellow Industry Affairs Medical Group Management Association dgans@mgma.org 303.799.1111 x1270