Welcome to TIM Talks: Business Acumen

“Developing Meaningful Partnerships with 

Physician Practices”

October 25th , 2016
Developing Meaningful 

Partnerships with Physician 

Practices, PCMHs, & 

FQHCs

Timothy P. McNeill, RN, MPH

Healthcare Consultant
Changes to the Medical Practice

Impact of ACO Participation

MACRA Legislation

Questions

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Physician Practices and the Risk Continuum

• Physician Practices, Patient Centered Medical Home 

Recognition (PCMH), and Federally Qualified Health Centers 

(FQHCs) receive Medicare payments under the Part B 

program

– Hospitals and Skilled Nursing Facilities bill Part A

– Readmission penalties generally apply to Part A collections

• Increasing competition from hospitals, retail clinics, and 

urgent care centers

• As providers take on more risk, the more likely they are to 

engage in a different care delivery model

• Success with APMs will require a redesign of standard care
Changing Practice Models

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• Past: Physician would see patients during the day and round 

at the local hospital to see patients admitted in the evening

• Current: 

– Increasing use of hospitalists

• Recent AAFP survey found that only 50% of family physicians 

maintain hospital privileges

– Physician practice disconnected from hospitalized patients

– Coordination of care between the hospitalists and physician practice 

is limited

– Many practices report seeing their patients 3 times per year 

or less
Challenging Business Environment

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• Increase the volume of patients

– Number of Unique Users

• Increase the number of billable encounters per patient

– Average number of encounters per patient per year

• Challenges from Retail and Urgent Care Clinics

– CVS Minute Clinic

– Rite Aid RediClinic

– Walgreens Healthcare Clinic

– Walmart

– Urgent Care – Patient First
Independent Practice Challenges

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• Remaining viable with all of the payment reform changes 

and increasing competition

• Desire of hospitals to control the entire care continuum

• Increased administrative burden to obtain reimbursement

• Reducing no-show rates, increasing compliance, and 

increasing billable revenue
Hospital-Owned Practices

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• An increasing number of physician practices are being 

purchased by health systems

• Health systems that are taking risk (bundled payment, 

ACOs, etc.) are moving to purchase practices so they can 

control the entire integrated care continuum

• The hospital-owned practice will be challenged to meet the 

needs of the hospital owner
Patient Centered Medical Home Recognition 

(PCMH)

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• National Committee for Quality Assurance (NCQA) 

PCMH recognition is the most widely adopted PCMH 

recognition program

– Joint Commission also provides a PCMH recognition program

• Some payers still provide enhanced reimbursement for a 

PCMH

• PCMH recognition requires:

– Committed resources to support a redesigned model of care

– Focus on care coordination

– Generally have a designated nurse care coordinator

• Nurse usually has a large volume of patients to service
Federally Qualified Health Centers (FQHCs)

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• HRSA 330 Grant-funded clinics 

• Traditionally serve a younger Medicaid population

• HRSA supported FQHCs must report an annual UDS Report 

to HRSA

• FQHC data is publically available from HRSA
Federally Qualified Health Centers (FQHCs)

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• Health Center Profile Data: 

http://bphc.hrsa.gov/uds/datacenter.aspx?q=d

– Number/Percentage of Medicare patients served each year

– Number/Percentage of patients 65 and older served each year

– Number/Percentage of patient encounters to manage chronic disease

– Number/Percentage of Obstetric encounters provided 
Health Center Profile Data

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Discussion Topics

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• What value-added services can your organization provide to 

support the needs of a medical practice?

• How would you approach the following medical practice 

types to establish a relationship?

– Hospital-Owned Practice

– Independent Practice

– PCMH

– FQHC
Impact of MACRA Legislation

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• MACRA 

– Medicare Access and CHIP Reauthorization Act

– Bipartisan bill passed separately from ACA

– Requires increased participation in alternative payment models

– APMs

• Bundled Payment

• ACOs

• Risk-bearing contracts for Medicare populations
MACRA Early Impact (Cont.)

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• Eligible Providers (EPs) will be subject to an initial 4% 

payment adjustment

• 2019, which grows to 9% in 2022 and later

– Merit-based Incentive Payment System (MIPS)

– EPs that meet the APM threshold are exempt and receive a lump 

sum incentive payment instead of being subject to a potential 

MIPS penalty
MACRA Financial Incentives

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• Eligible Providers that meet the required threshold for 

APM participation

– 2017 – Transition Year to establish benchmark quality metrics

– Eligible Providers (EPs) will be subject to an initial 4% payment 

adjustment

– Receive a 5% lump sum incentive payment based on the estimated 

aggregate of Part B covered professional services for the 

preceding year

– 2019 – 2020: EPs must have 25% of their payments through 

APMs

– 2021 – 2022: EPs must have 50% of their payments through 

APMs
APM - Accountable Care Organizations

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• “Accountable Care Organizations (ACOs) are groups of 

doctors, hospitals, and other health care providers who 

come together voluntarily to give coordinated care to 

Medicare Beneficiaries.” -- CMS

• ACO Goals

– Provide coordinated care to an attributed set of Medicare Fee-for-Service 

beneficiaries which results in improved health outcomes and reduced 

health care expenditures
ACO Incentive

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• When the ACO succeeds in improving health outcomes 

and reducing costs, the organization will share in the 

savings.

• Prior to ACOs there was not a mechanism for CMS to 

share savings with providers that have improved outcomes 

and lower costs. 

– System maintained a reverse financial incentive 
ACO Programs

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• Medicare Shared Savings Program (MSSP)

– Most Common

– Hundreds of Participants

• Pioneer ACO Model

– 19 remaining participants

• Next Generation ACO Model

– 21 Next Gen ACOs selected for 2016

– Near Full-Risk Model
Attribution Process

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• MSSP ACO applications accepted each July

• New MSSP ACOs begin January of the following Year

– July 2016 applicants will begin January 1, 2017

– All providers in the ACO submit their Tax ID Number (TIN)

– 3-year look back of all beneficiaries served by the PCPs in the 

ACO

– Consumers are attributed to the provider that provided the 

majority of paid primary care services
Hospital and Specialist role in an ACO

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• Consumers are attributed based on preponderance of 

primary care claims paid to a participating ACO primary 

care provider

– Primary care providers can only participate in 1 ACO

• Specialists do not attribute beneficiaries, unless the 

beneficiary had NO primary care claims

• Hospitals do not attribute beneficiaries

– Specialists and Hospitals can participate in more than one 

ACO
Share of Savings

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• MSSP ACOs can earn up to 60% of the savings they 

create, depending on how they perform on 33 quality 

measures

– Initially, MSSP ACOs are not required to take risk

– Risk will be required after a 5 year participation period

• Pioneer ACOs can earn up to 75% of the savings they 

create

– All Pioneer ACOs must take risk for losses at this time
What Makes up the Cost Analysis

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• Included Costs

– Medicare Part A Expenditures

– Medicare Part B Expenditures

• Excluded Costs

– Medicare Part D

– Medicaid Costs

– Medicaid LTSS

– Medicaid HCBS

– OAA Services

– VA Choice Services / VD-HCBS
Dual Eligible Beneficiaries

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• 20% of Medicare Beneficiaries are Dual Eligible

• Duals have a significantly higher per capita expense than 

non-duals

– MedPac, June 2013, Pg. 153: Per Capita spending on dualeligible beneficiaries in FFS was $15,743 compared to $8,081 for 

non-duals

• ACOs receive a separate report showing the percentage of 

Duals they have compared to other ACOs and the requisite 

costs

• Medicare is the primary payer for Duals
Duals and Shared Savings

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• Population is high risk due to the their overall higher costs

• Potential increases in utilization and costs, for Duals in an 

ACO, directly impacts the success or failure of an ACO

• Many ACOs develop a specific strategy just to address the 

Duals because of the high costs attributed to them

• Medicaid HCBS has been shown to reduce Medicare costs 

by reducing institutionalization
Shared Savings and Quality

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• Each year, ACOs must submit quality data to CMS

– ACO Quality measure reporting period is generally between 

January & March

• There are 33 quality measures that are analyzed

• If an ACO does not meet the minimum quality measure 

threshold, they are not eligible or their share of savings.
4 Quality Measure Domains

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• Patient/Caregiver Experience

• Care Coordination/Patient Safety

• Preventive Health

• At-Risk Population Health Management

– Diabetes Mellitus

– Hypertension

– Ischemic Vascular Disease

– Coronary Artery Disease
Sliding Scale Measure Scoring Approach

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• Points are earned based on a comparison of the individual 

ACO scores compared with the performance of all ACOs

• Total points earned in each domain are summed and 

divided by total points available

• Total points in each domain are averaged together to 

obtain a final overall quality score
2015 Mean ACO Performance Rate for all ACOs

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• Falls: Screening for fall risk: 45.60%

• Influenza Immunization: 57.51%

• Pneumococcal Vaccination: 55.03%

• Depression Screening: 39.27%

• Adult Weight screening and Follow-Up

66.75%

• Health Promotion and Education

58.29%

• All Condition Readmissions (Lower is better) 15.15%

• Medication Reconciliation

82.61%
Sliding Scale Measure Scoring Approach

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ACO Performance Level Quality Points

90+ Percentile 2.00 Points

80+ Percentile 1.85 Points

70+ Percentile 1.70 Points

60+ Percentile 1.55 Points

50+ Percentile 1.40 Points

40+ Percentile 1.25 Points

30+ Percentile 1.10 Points

< 30 Percentile No Points
2015 Mean ACO Performance Rate for all ACOs 

(Cont.)

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• Diabetes Composite (ACO 22-26) 25.41%

– Hemoglobin A1c Control < 8%

– LDL < 100 mg/dL

– Blood Pressure < 140/90

– Tobacco Non-Use

– Aspirin Use

• Hemoglobin A1c Poor Control > 9% 20.35%

– (Lower is better)

• Proportion of Adults who had blood 60.24%

• pressure screened in Past 2 years

• CAD Composite 66.90%

– Drug Therapy for Lowering LDL

– Cholesterol

– ACE Inhibitor or ARB Therapy for 

– Patients with CAD and Diabetes 
Alternative Payment Models: Points of Pain

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• MedPac Report to Congress. June 2013. Pg 106

– “There is concern that hospitals serving large shares of poor 

patients tend to have higher readmission rates and that 

hospitals serving these patients will be more likely to pay 

readmission penalties.”

• MedPac Report to Congress. June 2013. Pg 107

– “We found that hospitals with high shares of poor patients 

(as indicated by their share of Medicare patients on SSI) 

tended to have higher readmission rates and thus higher 

penalties.”
CMS Study of Socioeconomic Factors on Star Ratings

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• Released September 8, 2015

• Beneficiaries with low socio-economic status assessed 

based on Low-Income Subsidy (LIS) receipt and/or Dual 

Eligible (DE)

• Study found that 12 out of the 16 Star measures have a 

statistically significant negative association with LIS/DE 

status 

– All Cause Readmissions

– Medication Adherence 

– Diabetes/Heart Disease Measures
Seize the Opportunity

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• Stratify the population

• Identify the need of the consumer that matches your 

strengths

• Population that unanimously has been cited as a point of 

pain

– Consumers with low socioeconomic status

– Duals

– Consumers eligible for Medicaid HCBS that are at risk 

for institutionalization
What does the Consumer Need

• Strategies to support meeting this objective includes

– Expanded HCBS for Duals

• MLTSS and Waiver covered LTSS Services

– Evidence-Based Programs

• DSMT

• HBAI

• Promote how to deliver these programs in a 

budget-neutral manner
Questions

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