Medicare Physician Payment: Care Coordination Programs Used in Demonstration Show Promise, but Wider Use of Payment Approach May Be Limited
Published: 2008-02-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress mandated in 2000 that the Centers for Medicare & Medicaid Services (CMS) conduct the Physician Group Practice (PGP) Demonstration to test a hybrid payment methodology for physician groups that combines Medicare fee-for-service payments with new incentive payments. The 10 participants, with 200 or more physicians each, may earn annual bonus incentive payments by achieving cost savings and meeting quality targets set by CMS in the demonstration that began in April 2005. In July 2007, CMS reported that in the first performance year (PY1), 2 participants earned combined bonuses of approximately $7.4 million, and all 10 achieved most of the quality targets. Congress mandated that GAO evaluate the demonstration. GAO examined, for PY1, the programs used, whether the design was reasonable, and the potential challenges in broadening the payment approach used in the demonstration to other physician groups. To do so, GAO reviewed CMS documents, surveyed all 10 groups, and conducted interviews and site visits.
section_title: What GAO Found
paragraphs: All 10 participating physician groups implemented care coordination programs to generate cost savings for patients with certain conditions, such as congestive heart failure, and initiated processes to better identify and manage diabetes patients in PY1. However, only 2 of the 10 participants earned a bonus payment in PY1 for achieving cost savings and meeting diabetes quality-of-care targets. The remaining 8 participants met most of the quality targets, but did not achieve the required level of cost savings to earn a bonus. Many of the participants' care coordination programs were not in place for all of PY1. CMS's design for the PGP Demonstration was generally a reasonable approach for rewarding participating physician groups for achieving cost-savings and quality-of-care targets, but created challenges. CMS's decision to use comparison groups, adjust for Medicare beneficiaries' health status, and include a quality component in the design helped ensure that bonus payments were attributable to demonstration-specific programs and that cost-savings were not achieved at the expense of quality. However, the design created challenges. For example, neither bonuses nor performance feedback for PY1 were given to participants until after the third performance year had begun. CMS provides participants with quarterly claims data sets, but most participants report they do not have the resources to analyze these data sets and generate summary reports on their progress and areas for improvement. The large relative size of the 10 participating physician groups (all had 200 or more physicians) compared with most U.S. physician practices (less than 1 percent had more than 150 physicians) gave the participants certain size-related advantages that may make broadening the payment approach used in the demonstration to other physician groups and non-group practices challenging. Their larger size provided the participants with three unique size-related advantages: institutional affiliations that allowed greater access to financial capital, access to and experience with using electronic health records systems, and prior experience with pay-for-performance programs.

section_title: Letter
paragraphs: Medicare spending for physician services paid through Medicare’s Part B  fee-for-service (FFS) program grew rapidly from 2000 to 2006, increasing  from $37 billion in 2000 to $58 billion in 2006, at an average annual growth  rate of almost 8 percent, outpacing the national economy’s annual average  growth rate for that period of 5.2 percent. Growth in Medicare spending  for physician services has heightened congressional concerns about how  physicians are reimbursed under the Medicare FFS payment system as  well as the long-term fiscal sustainability of the Medicare program. The  Medicare Payment Advisory Commission (MedPAC) and other experts  believe that the method for paying physicians under the current Medicare  FFS payment system is contributing to the rapid growth in Medicare  expenditures, because the FFS payment system generally does not  encourage physicians to make efficient use of resources, encourage  coordination of physician services with services paid under the Medicare  Part A program, or encourage improvements in quality of care. Some  private sector insurers that pay physicians on an FFS basis have recently  implemented payment systems, referred to as pay-for-performance, in  which a portion of a physician’s or hospital’s payment is based on meeting  performance measures designed to improve the quality of care. Congress  mandated in the Medicare, Medicaid, and SCHIP Benefits Improvement  and Protection Act of 2000 (BIPA) that the Centers for Medicare &  Medicaid Services (CMS), the agency that oversees the Medicare program,  conduct demonstrations to test incentive-based alternative payment  methods for physicians reimbursed under Medicare FFS. The Physician  Group Practice (PGP) Demonstration was the first of several physician  pay-for-performance demonstrations CMS has implemented. In line with  BIPA’s mandate and the ongoing concerns about growth in Medicare  spending for physician services, CMS’s PGP Demonstration aims to  encourage the coordination of Part A and Part B services, promote  efficiency through investment in administrative processes, and reward  physicians for improving health outcomes.
CMS’s PGP Demonstration tests a hybrid payment methodology that  combines Medicare FFS payments with a bonus payment that participating  physician groups can earn by demonstrating savings through better  management of patient care and services and meeting quality-of-care  performance targets. Performance for the demonstration is based on the  success of the entire physician group practice, and not on the individual  performance of any one physician. CMS stated that it chose to focus on  large physician group practices because these organizations influence a  significant amount of Medicare expenditures and have sufficient Medicare  beneficiary volume to calculate Medicare savings or losses under the  demonstration. CMS initially designed the PGP Demonstration for a 3-year  period and recently, December 2007, continued the demonstration for a  fourth performance year. CMS solicited participation from physician  practices across the United States, and selected 10 physician group  practices with at least 200 or more physicians that were multispecialty  physician groups, which had the capacity to provide a variety of types of  clinical services. The first year of the demonstration, referred to as  performance year one (PY1), ran from April 1, 2005, through March 31,  2006, and the fourth performance year will end on March 31, 2009.
In July 2007, CMS reported the results of PY1. As a result of their efforts, 2  of the 10 participating physician groups participating in the PGP  Demonstration earned a performance bonus payment. Specifically, the  Marshfield Clinic and the University of Michigan Faculty Group Practice  earned bonuses of approximately $4.6 million and $2.8 million,  respectively. As a part of the overall design of the demonstration, to obtain  bonus payments, each participant had to generate cost savings to  Medicare of more than 2 percent relative to a unique comparison group of  Medicare beneficiaries intended to be similar to Medicare beneficiaries  treated by that participant. Only participants that earned this cost-savings  portion of the bonus also were eligible to increase their bonus payments if  they met certain disease-specific, quality-of-care performance targets. CMS  selected 10 diabetes management measures as the quality-of-care  performance targets, and in PY1, all 10 participants achieved 7 or more of  CMS’s 10 quality-of-care targets. Performance year two (PY2) and  performance year three (PY3) used the same bonus payment methodology,  with two exceptions: (1) other disease-specific quality measures are  phased in over time and (2) the share of any bonus earned by meeting  quality targets increases each year. While the specific quality-of-care  measures for each year were selected by CMS, each participating  physician group had the latitude to determine what programs—such as  patient care coordination and administrative processes—it would  implement to both generate cost savings and meet the quality measures.
No one savings or quality management program was required to be  implemented uniformly.
BIPA required us to report on the progress of the PGP Demonstration. As  discussed with the committees of jurisdiction, in this report we examined  for the first performance year of the demonstration: (1) what actions the  participating physician groups took to achieve cost savings and meet the  CMS-set, diabetes quality-of-care targets, (2) the extent to which the PGP  Demonstration design was a reasonable approach to rewarding  participating physician groups for cost-savings and quality performance,  and (3) potential challenges involved in broadening the payment approach  used in the demonstration from the 10 large participating physician groups  to other physician groups and nongroup practices.
To determine the programs used by the participating physician groups for  the PGP Demonstration, we analyzed data we collected through written  questionnaires and interviews. We supplemented this information by  conducting site visits to 5 of the 10 locations. We included in our analysis  new programs or expansions of existing programs created in response to  the demonstration. To determine the extent to which the PGP  Demonstration design was reasonable, we analyzed documents on the  overall design and bonus payment methodology we obtained from CMS,  analyzed data collected through the questionnaire, and used interviews we  conducted with representatives of the participating physician groups and  CMS. We also reviewed and analyzed CMS documents on the design of the  PGP Demonstration. To determine the potential challenges involved in  broadening the payment approach used in the demonstration to other  physician practices, we compared selected characteristics of the 10  participating physician groups with all physician practices in the United  States, and we also relied on interviews with the participating physician  group practices, CMS officials, and relevant industry experts. In doing our  work, we tested the reliability of the data and determined they were  adequate for our purposes. We conducted this performance audit from  May 2006 through December 2007 in accordance with generally accepted  government auditing standards. Those standards require that we plan and  perform the audit to obtain sufficient, appropriate evidence to provide a  reasonable basis for our findings and conclusions based on our audit  objectives. We believe that the evidence obtained provides a reasonable  basis for our findings and conclusions based on our audit objectives. For  additional details of our scope and methodology, see appendix I.
subsections: section_title: Background
paragraphs: Physician groups with at least 200 physicians were eligible to apply for the  PGP Demonstration and 10 were selected by CMS. (See table 1.) CMS’s  technical review panel evaluated each applicant based on its  organizational structure, operational feasibility, geographic location, and  demonstration implementation strategy. Collectively, the 10 participating  physician groups are all multispecialty practices comprising more than  6,000 physicians who provide care for more than 220,000 Medicare FFS  beneficiaries. While all the participants have at least 200 physicians, group  practice size varies widely, ranging from 232 to 1,291 physicians. Except  for the Marshfield Clinic, all participants identified themselves as  integrated delivery systems that include, in addition to their group  practice, other health care entities such as hospitals, surgical centers, or  laboratories. Nearly all of the participants have nonprofit tax status,  except for the Everett Clinic and the Integrated Resources for the  Middlesex Area (IRMA), which are for profit. Overall, a majority of the 10  participants are located in small cities and serve either predominantly  rural or suburban areas. These participants provide care over wide  geographic areas by using satellite physician group office locations,  ranging from 10 to 65 physician group office locations.
subsections: section_title: Demonstration Design, Including Bonus Payment Methodology
paragraphs: Under the PGP Demonstration’s design, participating physician groups are  eligible to earn annual cost-savings bonuses for generating Medicare  program savings. Participants that received cost-savings bonuses were  also eligible to receive additional bonuses for meeting certain quality  targets. Both the cost-savings and quality bonuses are in addition to  payments physicians receive under Medicare FFS. There are three main  steps in CMS’s bonus payment methodology to determine which  participants are awarded bonus payments and the amount of these  bonuses: (1) determination of eligibility for performance bonus payments,  (2) determination of the size of the bonus pool, and (3) determination of  actual bonus payments earned. (See fig. 1.)
For the first step of the bonus payment methodology, to determine  eligibility for receiving bonus payments, participating physician groups  had to generate savings greater than 2 percent of their target expenditure  amounts, relative to a comparison group of beneficiaries intended to have  similar characteristics. CMS stated that the purpose of the 2 percent  savings threshold was to further account for the possibility of random  fluctuations in expenditures rather than actual savings. CMS also stated  that it used separate comparison groups for each of the participants to  distinguish the effect of the demonstration’s incentive payments from  trends among Medicare beneficiaries unrelated to the demonstration.  Operationally, Medicare beneficiaries were assigned to the comparison  groups or to the participating physician groups retrospectively at the  conclusion of each performance year, using Medicare claims data sent to  CMS by providers following the delivery of care. As a part of the process  of selecting beneficiaries for each comparison group that were similar to  those served by the participating physician group they were being  compared with, CMS ensured that beneficiaries (1) resided in the same  geographic service areas as the beneficiaries assigned to the  corresponding physician group; (2) had received at least one office or  outpatient service, referred to as an evaluation and management (E&M)  service, in that performance year; and (3) had not received any E&M  services from the corresponding physician group that year or had been  assigned to the participant’s group of beneficiaries in any previous  performance year.
For step two, determining the size of the bonus pools, participating  physician groups that generated savings beyond the 2 percent threshold  were eligible to receive up to 80 percent of those savings as potential  bonuses. The remaining 20 percent, and all other savings not awarded to  the participants, were retained by the Medicare program.
In the third step, the determination of actual bonus amounts earned,  eligible participating physician groups could receive up to the full amount  available in their bonus pools as cost-savings bonuses and quality-of-care  bonuses. Specifically, for PY1, 70 percent of the bonus pool was awarded  as a cost-savings bonus to participants who met the 2 percent cost-savings  threshold, and up to 30 percent of the bonus pool could have been  awarded as a quality-of-care bonus, for those who met the cost-savings  threshold. The quality-of-care bonus was awarded to participants that met  or exceeded various quality-of-care targets within an area of clinical focus  selected by CMS, in collaboration with other organizations and the  participating physician groups. In PY1, CMS focused on diabetes  management, and required participants to meet targets on a set of 10  diabetes measures, including whether a beneficiary received an eye exam  or foot exam. To meet the quality-of-care target for each of the diabetes  measures, a participant had to either improve its performance by a certain  amount relative to its baseline performance or meet a national set of  performance measures, referred to as HEDIS® measures, established by  the National Committee for Quality Assurance (NCQA). Participants  could also receive a prorated share of the quality-of-care bonus, based on  success meeting some, but not all, of the quality-of-care targets.
While the bonus payment methodology will remain the same throughout  the demonstration, CMS added other quality-of-care measures and  increased the relative significance of the quality-of-care measures in PY2  and PY3. In PY2, quality-of-care measures pertaining to CHF and coronary  artery disease (CAD) were added to the existing diabetes measures. In  PY3, quality-of-care measures pertaining to the management of  hypertension and screening for breast and colorectal cancer were added  to the existing diabetes, CHF, and CAD measures. The proportion of the  bonus pool dedicated to meeting the quality-of-care targets—30 percent in  PY1—also increased in each performance year. For PY2, the potential  quality-of-care bonus increased to 40 percent of the potential bonus pool,  and the proportion of the bonus pool that will be paid as a cost-savings  bonus decreased to 60 percent. For PY3, the cost-savings and quality-of- care bonuses each will constitute 50 percent of the total bonus paid.
section_title: Results from Performance Year 1
paragraphs: In July 2007, CMS reported that in PY1, 2 of the 10 participating physician  groups earned bonuses for achieving cost-saving and quality-of-care  targets, while all 10 participants achieved 7 or more of the 10 quality-of- care targets. The Marshfield Clinic and the University of Michigan Faculty  Group Practice received performance bonus payments of approximately  $4.6 million and $2.8 million, respectively, in PY1. The Marshfield Clinic  generated approximately $6 million in Medicare savings in PY1, above the  2 percent threshold established by CMS. Of this $6 million bonus pool, the  Medicare program retained approximately $1.2 million, and Marshfield  Clinic earned $3.4 million for the cost-savings component of the bonus and  $1.2 million for meeting 9 of the 10 quality-of-care targets. The University  of Michigan Faculty Group Practice generated approximately $3.5 million  in savings in PY1 above the 2 percent threshold. Medicare retained  approximately $700,000 and the University of Michigan Faculty Group  Practice earned nearly $2 million for the cost-savings component of the  bonus, and just over $800,000 for meeting 9 of the 10 quality-of-care  targets.
Of the remaining eight participating physician groups that did not earn  cost-savings bonuses in PY1, all performed well in meeting the quality-of- care targets. Specifically, all eight of these participants achieved 7 or more  of the 10 quality-of-care targets, with two participants meeting all 10  quality-of-care targets and two others achieving 9 of the targets. In  addition, six of the participants came close to achieving the 2 percent  threshold for the cost-savings component of the performance bonus  payment in PY1. These six groups reduced their Medicare spending growth  rates compared to their comparison group, but not beyond the 2 percent  threshold. (See fig. 2.)
section_title: PGP Demonstration, Early Test of Public Sector Pay- for-Performance Models
paragraphs: While the number of pay-for-performance programs—programs in which a  portion of a provider’s payment is based on their performance against  defined measures—has increased in recent years, this growth has  occurred largely in the private sector by commercial health plans.  MedVantage reported that 107 pay-for-performance programs were in  place as of November 2005, up from 84 the year before.
Of these 107 pay-for-performance programs, 21 were public sector  programs, of which 10 were Medicare programs. Currently, CMS has   5 programs, including the PGP Demonstration, that are demonstrations  testing alternative physician payment methods. (See table 2.) Among these  5 physician pay-for-performance demonstrations, 4, including the PGP  Demonstration, test physician pay-for-performance methods by offering  incentives to physicians for meeting clinical performance standards, while  1 focuses on aligning financial incentives between hospitals and  physicians. The PGP Demonstration was the first of CMS’s Medicare  demonstrations to test physician pay-for-performance. Participants in  CMS’s Medicare Health Care Quality Demonstration, projected to begin in  2008, may elect to use this overall design and bonus payment  methodology from the PGP Demonstration. Among CMS’s other pay-for- performance demonstrations that are not physician related, is the Premier  Hospital Quality Incentive Demonstration, a hospital-specific pay-for- performance demonstration for more than 260 hospitals in the Premier  Inc., system. Under this demonstration, CMS provides bonus payments for  hospitals with the highest levels of performance in five clinical conditions,  including acute myocardial infarction. A recent study examining this  demonstration concluded that among hospitals receiving performance  bonuses, patients did not have a significant improvement in quality-of-care  of care or outcomes for acute myocardial infarction.
section_title: Participating Physician Groups Implemented Care Coordination Programs Designed to Achieve Cost Savings and Management Processes to Meet CMS-Set Diabetes Quality-of-Care Targets in PY1
paragraphs: The participating physician groups implemented care coordination  programs to achieve cost savings and improved their management  processes to meet quality improvement targets CMS set for particular  diabetes measures in PY1. More specifically, management process  improvements included enhancing information technology (IT) systems,  incorporating more team-based approaches, and improving administrative  processes. Despite early positive indicators in cost savings, the full impact  of programs implemented for the PGP Demonstration, particularly in care  coordination, is largely unknown because many programs were not in  place for all 12 months of the first performance year.
subsections: section_title: Participating Physician Groups Implemented 47 Programs for the Demonstration, Largely in Care Coordination
paragraphs: The participating physician groups implemented 47 programs, which were  either new or expansions of existing programs, to achieve cost savings and  meet the CMS-set diabetes quality-of-care targets, with each participant  implementing from 2 to 9 programs. (See app. II for a complete list of  new and expanded programs implemented for the PGP Demonstration.)  More specifically, participants focused nearly three-quarters of their new  and expanded programs on care coordination—programs that manage the  care of a small number of chronically ill and frail elderly patients who  account for a disproportionately large share of overall costs. (See fig. 3.)  The remaining one-quarter of programs focused on patient education,  medication-related issues, improving administrative processes, and other  initiatives.
Among the 47 programs, participating physician groups devoted the  largest portion of their program resources to care coordination programs  designed to reduce hospitalizations by improving post-acute care. Our  analysis showed that for 9 of the 10 participants at least half of  demonstration-specific, full-time equivalents (FTE) were devoted to care  coordination programs. (See table 3.) Participants told us they selected  care coordination programs that provided post-acute care because they  believed these programs would reduce future hospitalizations and yield  the most cost savings in the shortest amount of time. For example, both  Billings Clinic and Park Nicollet Health Services used a telephonic  interactive voice response (IVR) system to monitor patients’ health status  at home following a hospitalization or another significant health event.
Approximately half of the care coordination programs were case- management programs that targeted high-cost, high-risk patients with  multiple medical conditions, while the other half were disease- management programs that treated patients with a specific disease, such  as CHF. Seven participants focused on case-management programs by  using care managers for patients with multiple medical conditions to  reduce hospitalizations. For example, an official from the Dartmouth- Hitchcock Clinic stated that the clinic’s primary strategy for the PGP  Demonstration was to reduce hospitalizations and readmissions through  more effective discharge planning, such as calling patients at home  following their hospital discharge and encouraging them to schedule  follow-up appointments with their physicians. Three participants  committed the majority of their resources to disease-management  programs; two of the three participants told us they focused on CHF  because it is a costly disease to treat and would therefore generate savings  within the first performance year. Other diseases, such as diabetes, could  take several years to generate cost savings. CHF and diabetes are two of  the most common chronic diseases among Medicare beneficiaries,  according to recent health policy research.
All 10 participating physician groups reported that their care coordination  programs were making progress in both achieving cost savings and  providing broader benefits to their programs and communities. In  particular, four participants reported declines in hospitalizations for  patients enrolled in their CHF care coordination programs. For example,  Park Nicollet Health Services reported a 61 percent reduction in  hospitalizations for patients enrolled in its CHF care-management  program, which utilized an IVR to interact with patients on a daily basis.  Park Nicollet representatives estimated this program saved $4,680 yearly,  on average, for each patient enrolled in the program. Because the  demonstration included other Medicare and non-Medicare patients, its  benefits extended beyond the patients assigned to Park Nicollet for the  demonstration. Further, several participants stated that collaboration and  information sharing among the 10 participants on designing and  implementing programs and analyzing data resulted in improvements to  their demonstration programs, which broadly benefit their organizations.  Representatives from St. John’s Health Systems stated that creating a care- coordination program had additional benefits, including the adoption of  such programs by other health systems and physician groups throughout  the community.
Despite early positive indicators of cost savings, the full impact of  programs implemented for the PGP Demonstration, particularly in care  coordination, is largely unknown for a variety of reasons, including that  many programs were not in place for all 12 months of the first  performance year. Only 1 of the 10 participants had all of its programs in  place for all 12 months of PY1. For example, the Marshfield Clinic had a  case-management program operational for all 12 months in PY1, and a  disease-management program operational for 4 months. By the beginning  of PY2, only 6 of the 10 participants had all of their care coordination  programs operational. Officials from participating physician groups stated  that program implementation delays were caused by program complexity,  the process of gaining management approval for significant program start- up costs, and educating physicians about the programs. In addition, two  participants stated that because their care coordination programs were  phased in throughout the first two performance years, PY3 may be the first  year that the full impact of these programs is realized.
section_title: Participating Physician Groups Improved Management Processes to Meet the Diabetes Quality- of-Care Targets in First Performance Year
paragraphs: To meet the quality-of-care targets set by CMS on diabetes management,  participating physician groups improved their management processes by  investing in IT, creating team-based approaches, and improving  administrative processes, particularly for diabetes management, the  quality-of-care target for PY1. To earn the maximum bonus, participants  that met the 2 percent cost-savings target had to further meet a quality-of- care improvement target in a particular clinical area. The measures  selected by CMS for each performance year of the demonstration focused  on chronic conditions prevalent in the Medicare population that are  treated in primary care. In PY1, CMS selected diabetes management as  the focus for quality improvement for the demonstration participants. See  table 4 for a categorization of how the participants worked to improve  quality, specifically for diabetes, by using physician feedback, patient  registries, team-based approaches, and improved documentation.
All participating physician groups made new investments in IT, by adding  features to existing EHR systems or using technology to track physicians’  performance on the quality-of-care measures set by CMS. For example,  Marshfield Clinic implemented electronic alerts in its EHR system to  remind clinical staff to provide care, such as immunizations. Participants  primarily used electronic methods for physician feedback as a tool for  physicians to track their performance and that of their peers to improve  their internal operations and patient care. For example, Geisinger Health  System’s physician feedback system provided physicians with access to  monthly reports for each physician, which compared each physician’s  performance in meeting the quality-of-care measures. According to  administrators from Geisinger, this transparent approach fostered positive  competition among its physicians to improve quality of care. Participants  also invested in IT by creating electronic patient or disease-specific  databases or lists referred to as patient registries to better identify patients  eligible for enrollment in diabetes programs. The St. John’s Health System,  which did not have an EHR system, created an electronic patient registry  to track patients with diabetes and to alert physicians to provide certain  tests.
Six of the participating physician groups relied to a greater extent on a  team-based approach to improve care processes. Using a team-based  approach, participants expanded the roles and responsibilities of  nonphysician staff such as nurses, medical assistants, and care managers  so that they worked more effectively with physicians to deliver quality  care. Although the demonstration required additional quality reporting,  officials from two of the participating physician groups stated that they  were able to treat the same number of patients in a day. For example,  Dartmouth-Hitchcock Clinic used care managers who were nurses to  maximize the effectiveness of patients’ office visits. These staff scheduled  lab tests in advance of patients’ office visits when appropriate, developed  patient action plans, and communicated with physicians before and after  patients’ arrivals. Physicians from Dartmouth-Hitchcock told us that the  time they spent with patients had become more effective because of this  new approach.
Four participating physician groups improved their administrative  processes by creating better documentation methods for diabetes-related  tests and exams. They created worksheets, derived from patients’ medical  records, to ensure that patients received diabetes tests, such as foot and  eye exams. In addition to improving documentation, these initiatives  served as reminders to physicians to complete diabetes-related tests and  exams and also reduced the burden of data collection for reporting  purposes. For example, IRMA created paper forms that were added to  patient records to collect data on tests as they were conducted. In addition  to improving documentation, these forms were intended to relieve some of  the burden of collecting data for smaller practices within the organization.  IRMA physicians also received paper worksheets at the point of care to  help monitor and track care provided to their diabetes patients.
section_title: CMS’s PGP Demonstration Design Was Generally a Reasonable Approach, but Created Challenges
paragraphs: CMS’s design for the PGP Demonstration was generally a reasonable  approach for rewarding participating physician groups for cost-savings  and quality performance. However, the demonstration design created a  particular challenge for CMS in providing timely performance feedback  and bonus payments to the participants which, if received more quickly,  may have enabled them to improve their programs.
subsections: section_title: CMS’s PGP Demonstration Design Was Generally a Reasonable Approach for Rewarding Participating Physician Groups
paragraphs: CMS’s design for the PGP Demonstration was generally a reasonable  methodological approach for determining whether the actions taken by  the participants resulted in cost savings and improvements in quality, and  rewarding participants as appropriate. In particular, three aspects of the  PGP Demonstration design were consistent with established  methodological practices considered effective: a rigorous research study  design to isolate the effects of the demonstration’s incentives, a risk- adjustment approach to adjust for changes in patient health status, and a  quality component to help ensure that participating physician groups did  not achieve cost savings at the expense of quality.
CMS used a rigorous research design to enable it to isolate the  effectiveness of the actions taken by each of the participants in the  demonstration. Specifically, CMS used a modified “pre-test/post-test”  control group design that is generally viewed by experts as an effective  way to control for some of the most common threats to internal validity, in  this case the ability of the study design to measure the true effects of  CMS’s incentive payments. The features of CMS’s study design included a  separate comparison group for each participant to distinguish the effects  of the demonstration’s incentives from unrelated spending trends in the  participants’ service areas. Comparison groups’ beneficiaries are from the  participants’ geographic service areas and, as such, are affected by the  same local market trends as the participants. In addition, the study design  included a baseline period, before the demonstration began, that helped to  control for trends that may have occurred without demonstration-related  interventions. A standard pre-test/post-test control group design would  have randomly assigned beneficiaries to either a comparison group or a  participant’s beneficiaries. To avoid having to restrict or control  beneficiaries’ choice of providers and health care services, and to continue  to operate within the Medicare FFS system while the demonstration was  in place, CMS modified this standard approach. Rather than assigning  beneficiaries randomly at the start of the demonstration to participant or  comparison groups, the agency retrospectively assigned beneficiaries at  the end of each year based on the beneficiaries’ natural use of outpatient  E&M services.
CMS also used a rigorous risk-adjustment approach to adjust for changes  in patients’ health-care status. Without these adjustments, CMS could not  have been reasonably assured that changes in spending growth were not  attributable to changes in patients’ health care status, and the severity and  complexity of diagnosis. For the PGP Demonstration, CMS tailored the  CMS-Hierarchical Condition Category (HCC) model, the risk-adjustment  model that it currently uses to make capitation payments to Medicare  managed care plans. This model accounts for changes in the health status  of beneficiaries.
Furthermore, CMS incorporated a quality component into the research  design, which helped ensure that participants would not achieve cost  savings at the expense of quality. The quality-of-care measures CMS  selected were based on a consensus of experts and were developed in  collaboration with the American Medical Association and quality  assurance organizations and with input from the participants. In addition,  CMS has placed an increased emphasis on quality in its bonus payment  methodology for future years. By PY3, half of the available bonus pool will  be awarded based on each participant’s success in meeting quality-of-care  metrics in six clinical areas: diabetes, CHF, CAD, management of  hypertension, and screening for breast cancer and colorectal cancer.
section_title: PGP Demonstration Design Created Several Challenges
paragraphs: While CMS’s research design for the PGP Demonstration was generally a  reasonable approach, it also created some challenges for the participating  physician groups. Challenges resulting from the demonstration design  included providing timely performance feedback and bonus payments and  the use of a uniform 2 percent savings threshold that may have  disadvantaged certain participants. Participants also raised other concerns  related to the demonstration design that were related to their local  markets.
subsections: section_title: Certain Aspects of the Demonstration Design Made Providing Timely Feedback and Bonus Payments Challenging
paragraphs: Overall, participants did not receive performance feedback or bonus  payments for their PY1 efforts until after the beginning of the third  performance year. Specifically, CMS provided participants with  performance feedback and bonus payments regarding their efforts in PY1  in three phases beginning 12 months after the end of PY1. In April 2007,  CMS provided each participant with a cost-savings summary report  displaying its success in controlling Medicare expenditures for PY1 and  the size of its cost-savings bonus pool. (See fig. 4.) A little over 2 months  later, CMS provided each participant with a detailed settlement sheet  displaying its individual cost-savings and quality-of-care bonuses for PY1.  It was not until July 2007, 15 months after the end of PY1, that the two  participants that earned a demonstration bonus for PY1—the Marshfield  Clinic and the University of Michigan Faculty Group Practice—received  their bonus payments of $3.4 million and $2.1 million, respectively.
CMS officials explained that generating feedback for the participating  physician groups required 15 months because the demonstration design  depended on the time-consuming process of retrospectively analyzing  Medicare beneficiaries’ claims and chart-based data. Specifically, CMS  officials stated that the process of calculating participants’ cost-savings  bonuses required at least 12 months after the conclusion of the first  performance year—6 months to accrue claims data that were sufficiently  complete and a second 6 months to analyze and calculate the bonus  amounts. In addition, they stated that the calculation of the quality-of- care bonus required an additional 3 months to audit and reconcile chart- based data with claims-based data pertaining to the 10 diabetes quality-of- care measures. CMS officials stated that to calculate the cost-savings  bonus they chose to use a claims file that was 98 percent complete  because they wanted to ensure that the feedback they provided to  participants was accurate. CMS officials also stated that the time frames  for providing performance feedback and bonus payments to participants  in PY1 will be the same for PY2 and PY3.
Officials from all 10 participating physician groups expressed concern  about the length of time CMS took to provide them with performance  feedback and bonus payments. Several participants stated that they had  difficulty making adjustments to their programs and improving their  overall performance because of delayed feedback and payments. One  official from the Novant Medical Group stated that the 15-month time lag  in receiving bonus payments would prevent the organization from  reinvesting these resources into demonstration-related programs and  improving them for subsequent performance years. In addition, two of the  participants told us that other pay-for-performance programs they have  participated in have used payment methodologies that yielded more timely  performance feedback or bonus payments. For example, officials from the  University of Michigan Faculty Group Practice indicated that a pay-for- performance program sponsored by Blue Cross Blue Shield of Michigan  provided them twice a year with feedback for meeting certain quality-of- care targets.
In response to these concerns, CMS has been working to provide each  participating physician group with a quarterly Medicare patient claims  data set related to beneficiaries they served. Initially, data sets were  provided quarterly and focused on identifying patients with chronic  conditions who had a hospital admission or emergency room visit. In July  2007, CMS provided each participating group with a data set on hospital  inpatient, outpatient, and physician information consisting of the Medicare  claims of beneficiaries likely to be included in the PY2 cost-savings  calculations. In September 2007, CMS responded to participants’ requests  for quarterly claims data that would allow them to assess their cost- savings performance during the performance year, by providing them with  a revised data set. CMS’s most recent data set included Medicare inpatient,  outpatient, and physician claims data for beneficiaries likely to be  included in the year-end cost-savings calculation. The data set includes  information on these beneficiaries for the first quarter of PY3. CMS noted  that it will not provide equivalent information pertaining to comparison  group beneficiaries because these data are too time-consuming to  assemble.
While CMS’s provision of ongoing quarterly data sets to participants is  timelier than the information provided before, most participants told us  they do not have the necessary resources to analyze these data sets in a  timely manner. This lack of timely actionable data could hinder  participants’ ability to adjust their programs on a more “real-time” basis.  Officials from only 2 of the 10 participants told us they would able to  analyze and use the quarterly data sets CMS provided. Consequently, the  data sets are not as useful as providing CMS-generated quarterly reports,  similar to the final reports CMS provided on participants’ progress in  achieving cost-savings and quality-of-care targets. CMS may not be able to  provide quarterly reports that include comparison group trends or provide  quality-of-care data that rely on chart-based data because of complexity  and cost. However, CMS could provide participants with estimates on  their growth in per-beneficiary expenditures each quarter, as well as  changes in the profile of the beneficiaries who are likely to be assigned to  the participants. CMS could also use more readily available claims data to  provide quarterly estimates of participants’ progress in meeting the  quality-of-care targets. In PY1, for example, that would have included  reporting progress on 4 of the 10 claims-based quality targets on diabetes,  such as whether a beneficiary received an eye exam.
section_title: Use of a Uniform 2 Percent Savings Threshold for All Participants May Have Made Earning a Bonus More Challenging for Particular Providers
paragraphs: CMS officials said they adopted the use of a uniform 2 percent threshold to  ensure that savings generated really were due to demonstration-related  programs. Just as CMS used individual comparison groups for each  participant, CMS could have used separate savings thresholds that more  closely reflected the market dynamics of each participant’s overall area  instead of a uniform savings threshold chosen based on historical data  averaged across the 10 participants. However, use of different thresholds  for each participant, according to CMS officials, would have been complex  and would have generated additional administrative burden in processing  bonus payments.
Nevertheless, the use of a uniform savings threshold—2 percent—that all  participating physician groups had to achieve before becoming eligible for  a bonus payment may have made earning bonus payments more  challenging for particular providers, specifically those with already low  Medicare spending growth rates or those that had comparison group  providers with low spending growth rates. Participants with low relative  spending may have had difficulty generating annual Medicare savings of  greater than 2 percent compare to those participants with high spending  growth rates before the demonstration began, some participants argued.  Supporting this concern is the wide variation in the amount participants  spent per beneficiary in the year prior to the demonstration, which ranged  from $6,426 to $11,520, after adjusting for health status. In addition,  participants with comparison groups that had relatively low spending  growth may have faced more of a challenge reducing their spending below  2 percent of their comparison groups’ spending than participants with  comparison groups that had higher relative spending growth. In fact, both  participants that received a bonus, Marshfield Clinic and the University of  Michigan Faculty Group Practice, were measured against comparison  groups with high relative spending growth rates—the 2 largest among the  10 participants. While their success cannot necessarily be attributed to the  high relative spending of their comparison groups, the high spending  growth of the comparison groups against which they were measured may  have had some effect.
section_title: Additional Participant Concerns
paragraphs: In addition, several participating physician groups noted selected concerns  particular to their local markets. For example, officials from one  participating physician group expressed concern that CMS did not  adequately adjust for the conversion of several hospitals in their market to  critical access hospitals (CAH), which generally receive higher Medicare  payments. Participant officials noted that their physician group treat more  patients from these hospitals, which resulted in a higher spending trend  and lower likelihood of obtaining a cost-savings bonus. CMS stated that  the agency will examine this issue as part of its evaluation at the  conclusion of the PGP Demonstration.
Several participating physician groups were also concerned that their  groups had more beneficiaries with specialist visits relative to their  comparison groups. As a result, participants providing more specialty  care may have had less control over the health outcomes of these  beneficiaries. However, analyses conducted by CMS showed that these  participants provided 80 percent or more—a predominant share—of the  E&M services for most of the beneficiaries assigned to them in PY1,  regardless of specialty, and had meaningful opportunities to influence  beneficiary health care expenditures. CMS officials stated that they will  continue examining this issue and other related issues brought to their  attention by the participants as part of their evaluation of the  demonstration.
section_title: Participating Physician Groups Had Several Size-Related Advantages, Which May Pose Challenges in Broadening the Payment Approach Used in the Demonstration to More Participants
paragraphs: The large size of the 10 participating physician groups compared with the  majority of physician practices operating in the U.S. gave the participants  certain size-related advantages that might make broadening the payment  approach used in the demonstration to more participants challenging. The  10 participating physician groups had significantly higher numbers of  physicians, higher annual medical revenues, and higher numbers of  supporting staff, and were more likely to be multispecialty practices than  most practices in the U.S. Specifically, the participating physician groups  generally had three unique size-derived advantages: institutional  affiliations that allowed greater access to financial capital, access to and  experience using EHR systems, and experience prior to the PGP  Demonstration with pay-for-performance programs.
While all the participating physician groups in the demonstration have 200  or more physicians in their practices, significantly less than 1 percent of  the approximately 234,000 physician practices in the U.S. in 2005 had 151  or more physicians in their practice. (See fig. 5.) By contrast, practices  with only 1 or 2 physicians comprised 83 percent of all practices.  Furthermore, while all 10 participants were multispecialty practices,   68 percent of the all practices in the U.S. were single-specialty practices,  which are generally smaller organizations. The 10 participating physician  groups were also large compared with other physician practices in terms  of annual medical revenues and nonphysician staff. Participants generated  an average of $413 million in annual medical revenues in 2005 from  patients treated by their group practice, far greater than the revenues  generated by single specialty practices in the U.S. Only about 1 percent of  single specialty practices had revenues greater than $50 million. In  addition, these physician groups and their affiliated entities, such as  hospitals, employed approximately 3,500 nonphysician FTEs, over 100  times more than the average single-specialty practice.
Their larger relative size gave the 10 physician groups participating in the  PGP Demonstration three size-related advantages over smaller physician  practices, which may have better prepared them to participate in the  demonstration’s payment model and implement programs encouraged by  the demonstration. First, participants typically had institutional affiliations  with an integrated delivery system, a general hospital, or a health  insurance entity. Specifically, 9 of the 10 participating physician groups  were a part of an integrated delivery system, 8 were affiliated with a  general hospital, and 5 were affiliated with an entity that marketed a  health insurance product. In contrast, a representative of the Medical  Group Management Association estimated that approximately 15 percent  of all physician practices in the U.S. have an affiliation with a general  hospital.
As a result of these affiliations, participating physician groups generally  have greater access to the relatively large amounts of financial capital  needed to initiate or expand programs. On average, each participating  physician group invested $489,354 to initiate and expand its  demonstration-related programs and $1,265,897 in operating expenses for  these programs in PY1. (See app. III.) Specifically for individual programs,  participants reported spending an average of $190,974 to initiate and  $409,332 to operate case management programs in PY1, almost twice the  spending associated with any other type of program. (See table 5.) Several  participants reported that the majority of their individual program  expenditures were labor costs for care managers. Officials from several  participating physician groups said that smaller practices might have  difficulty implementing similar programs because they may not have the  financial resources to do so.
The second advantage the 10 large participating physician groups had over  smaller physician practices is a greater likelihood of having or acquiring  EHR systems, which was essential in participants’ ability to gather data  and track progress in meeting quality-of-care targets. Eight of the 10  participating physician groups had an EHR in place before the  demonstration began, and the 2 other participants, out of necessity,  developed alternative methods for gathering patient data electronically  specifically for the demonstration, such as creating patient registries. In  contrast, only an estimated 24 percent of all physician practices in the  United States had either a full or partial EHR in 2005, and large practices  were more likely to have EHRs than small practices. These systems  enable physician group practices with multiple locations, such as the 10  participating physician groups, to share patient information and other  administrative resources across a wide geographic area. Health care  information technology experts believe that the primary reason smaller  physician practices have not implemented EHRs is their cost, estimated at  $15,000 and $50,000 per physician. In addition, experts estimated that  annual maintenance costs add between 15 and 25 percent of the initial per  physician investment. Furthermore, experts noted that small practices  tend to pay more per physician for EHR systems than larger physician  practices because larger physician practices are better able to spread the  fixed costs of these systems across more physicians.
Finally, the third size-related advantage that most of the 10 participating  physician groups had over smaller physician practices was the larger  groups’ experience with other pay-for-performance systems prior to  participating in the PGP Demonstration. Overall, 8 of the 10 participants  had previous experience with pay-for-performance programs initiated by  private or public sector organizations. This experience may have eased  their adjustment to the PGP Demonstration and afforded them greater  initial and overall success. For example, the University of Michigan  Faculty Group Practice’s participation in a pay-for-performance system  sponsored by Blue Cross Blue Shield of Michigan offered the physician  group incentives to upgrade its chronic care infrastructure. In addition to  experience with pay-for-performance programs, generally, the majority of  the 10 participating physician groups had experience with specific  elements of pay-for-performance, such as physician bonus compensation  methods and physician feedback processes. Representatives from some of  the participating physician groups stated that their exposure to one of  these various elements of pay-for-performance elements prior to the PGP  Demonstration may have enabled their organizations to adjust to the  demonstration more rapidly.
section_title: Conclusions
paragraphs: The care coordination programs used by the participating physician  groups show promise in achieving cost savings and improving patient  outcomes for Medicare beneficiaries. As a result of the demonstration,  participating physician groups generated several different approaches for  coordinating patient care across inpatient and physician settings for high- risk and high-cost patients, such as those with CHF, and better managing  patients with diabetes, the quality-of-care target for the demonstration set  by CMS. Additional years of the demonstration may be needed, however,  for CMS to collect and analyze the information necessary to fully evaluate  the effectiveness of these care coordination programs and their potential  for cost savings in this demonstration. Only one participant had all of its  care coordination programs operational for all 12 months of PY1, and  participants did not receive timely feedback from CMS on their progress  until PY3 had already begun.
While CMS’s demonstration design was generally reasonable, the lengthy  time CMS took to provide participating physician groups with  performance feedback and bonus payments may limit more widespread  use in other demonstrations, or use as an alternative method for paying  physicians group in Medicare FFS. The lack of timely and actionable  performance feedback also hinders participants’ ability to improve their  programs in response to data. Providing performance feedback and bonus  payments to participants more than 12 months after the end of the  measurement period precludes physician groups from adjusting their  program strategies on a more “real-time” basis. CMS has recently taken  action to provide participants with quarterly claims data sets on their  beneficiaries for PY3, but most participants indicated they would have  difficulty analyzing such data to determine their progress in achieving  cost-savings and quality-of-care targets.
Measuring participants’ performance using a comparison group where  beneficiaries were retrospectively assigned after the end of a performance  year, as used in this demonstration, may be impractical for more  widespread use beyond this demonstration because physician groups  cannot accurately predict on an ongoing basis whether they would be able  to generate cost-savings and receive bonus payments. In addition, the use  of a uniform savings threshold amount, such as the 2 percent used in this  demonstration, raises questions about whether this approach provides a  disincentive for physician groups that have lower spending. Physician  groups with fewer than 200 physicians—the vast majority of practices in  the United States—may also have more difficulty than larger practices,  such as the participants in this demonstration, absorbing the start-up and  annual-operating costs of the care coordination programs and  implementing them without EHR systems that many groups believed were  necessary to achieve cost savings while maintaining and improving the  quality of care.
As the PGP Demonstration continues, data will become available to CMS  to determine how much influence factors such as the delay in the start-up  of participating physician groups’ care coordination programs and its  decision to use a uniform 2 percent threshold, and other factors, may have  had on participants’ ability to earn bonus payments. Consequently, it is  understandably too early to determine the success of the PGP  demonstration, but evidence so far indicates that the care coordination  programs initiated by the participants show promise, but that the wider  applicability of the payment methodology used in the demonstration may  be more limited.
section_title: Recommendation for Executive Action
paragraphs: We recommend that the Administrator of CMS provide participating  physician groups with interim summary reports that estimate participants’  progress in achieving cost-savings and quality-of-care targets.
section_title: Agency Comments and Our Evaluation
paragraphs: CMS reviewed a draft of this report and provided comments, which appear  in appendix IV. CMS stated that it appreciated our thoughtful analysis and  that our report would provide additional insight into performance year one  results and complement its ongoing evaluation efforts.
CMS agreed with the intent of our recommendation. CMS stated that it  was developing a new quarterly report and refined data set to aid the  physician groups in monitoring their performance, coordinating care, and  improving quality. CMS stated that these reports would address a key  limitation of existing quarterly data sets—that most physician groups do  not have the necessary resources to analyze the data sets in a timely  manner. We agree that this information would be helpful in improving  performance feedback to physician groups, which would allow them to  adjust their program strategies on a more “real-time” basis. As the  demonstration continues, we encourage CMS to continue its efforts to  improve performance feedback to the physician groups participating in the  PGP demonstration.
We are sending copies of this report to the Administrator of CMS. We will  provide copies to others on request. In addition, this report is available at  no charge on the GAO web site at http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-7114 or kingk@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff members who made key contributions to this  report are listed in appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: For the first performance year, we examined three objectives: (1) what  actions the participating physician groups took to achieve cost savings and  meet the diabetes quality-of-care targets selected by the Centers for  Medicare & Medicaid Services (CMS), (2) the extent to which the  demonstration design was a reasonable approach to rewarding  participating physician groups for cost savings and quality performance,  and (3) potential challenges involved in broadening the payment approach  used in the demonstration from the 10 large participating physician groups  to other physician groups and nongroup practices. For each of our  reporting objectives, we analyzed data we collected, by written  questionnaire, and supplemented this information with interviews in  person and by telephone and site visits to 5 of the 10 locations.
subsections: section_title: Questionnaire
paragraphs: We sent questionnaires to individuals CMS identified as points of contact  at each of the participating physician groups. These individuals were often  physicians or administrative staff tasked with overseeing their physician  group’s demonstration efforts. All 10 participants completed and returned  our questionnaire. The questionnaire contained three sections. The first  section gathered standardized information about the practice’s general  characteristics, including organizational structure, size, institutional  affiliations, and the extent to which it used electronic health records  systems. The second section gathered information about the programs  participants used as a part of the Physician Group Practice (PGP)  Demonstration. This section confirmed summary statements the individual  practices described in their original applications to CMS or in other  documents we obtained from CMS’s contractor, Research Triangle  Institute (RTI), and provided an opportunity for the group to add new  programs, if needed. Summary statements detailed the purpose, type, and  characteristics of each program. We also asked participants whether each  of their programs was created specifically for the demonstration, was a  preexisting program, or was an expansion of a preexisting program. In  addition, we asked officials from these physician groups to identify the  start-up costs and the annual operating costs of these programs. We also  asked about the extent to which the physician groups believe smaller  physician practices could implement similar programs. The third section  of the questionnaire gathered information about how the participating  physician groups compensated their physicians and how any  demonstration bonus dollars they may earn would be distributed to  individual physicians within the group.
section_title: Site Visits and Interviews
paragraphs: We also conducted site visits or telephone interviews with staff of all 10  participating physician groups. Five of these interviews were site visits,  which we chose to reflect geographic diversity (region of country and  urban/rural), size, and ownership status, among other factors. We  conducted site visits to Geisinger Health System in Pennsylvania, Park  Nicollet Health Services in Minnesota, Marshfield Clinic in Wisconsin,  Billings Clinic in Montana, and the Everett Clinic in Washington. We  collected the same information by telephone from the other participants in  the demonstration. For these in-person or telephone interviews, we  interviewed the demonstration project managers, physicians, care  managers, finance officials, and information technology staff.
section_title: Analysis for Reporting Objectives
paragraphs: To identify programs used by the participating physician groups to achieve  cost savings and meet the CMS-set diabetes quality-of-care targets, we  analyzed data we collected by written questionnaires and interviews,  supplemented with information we obtained at site visits to 5 of the 10  participants. We included in our analysis new programs or expansions of  existing programs created in response to the demonstration. To determine  the extent to which the demonstration’s design was reasonable, we  analyzed documents on the overall research design and bonus payment  methodology obtained from CMS, analyzed data collected through the  questionnaire, and used interviews we conducted with the participating  physician groups and CMS and its contractor RTI. We also reviewed and  analyzed CMS-contracted documents on the design of PGP Demonstration.  To determine the potential challenges involved in broadening the payment  approach used in the demonstration to other physician groups, we  compared selected characteristics of the 10 participating physician groups  to physician practices in the United States, using data primarily from the  Medical Group Management Association’s (MGMA) annual survey. We also  used data we collected from the questionnaire and from our interviews  with officials from the physician group practices. We also interviewed  experts on health information technology systems.
section_title: Data Reliability
paragraphs: We assessed the reliability of the information we obtained about  participating physician group practices and the data we used to compare  them to other physician groups in the U.S. in several ways. First, we  checked the internal consistency of the information we obtained from the  physician groups with information from RTI’s PGP Demonstration site  visit reports and CMS’s 2006 Report to Congress on the PGP  Demonstration. We verified the information we collected from the  questionnaire with detailed follow-up interviews with officials from all 10  participants. Second, we spoke to the survey director for the 2005 MGMA  survey to ensure that we used the information from that survey  appropriately and that we understood any data limitations. In addition, we  compared the data we used on U.S. group practices from the 2005 MGMA  survey with data from the 2005 National Ambulatory Medical Care Survey  and determined that the results were largely consistent and adequate for  our purposes. Third, on the basis of this comparison and discussions with  experts knowledgeable about the data, we used broad categories to  describe the data. We determined that the data used in our analysis were  sufficiently reliable for the purposes of this report.
We conducted our work from May 2006 through December 2007 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: New and Expanded Programs Implemented by the 10 Participating Physician Groups for the PGP Demonstration
subsections: section_title: Program name and program type
paragraphs: Billings Clinic  Cancer treatment center—care  coordination (disease management)
Patients received coordinated cancer care including  screening, prevention education, and infusion  treatments.
Chronic obstructive pulmonary disease  (COPD) management—care coordination  (disease management)
Care managers worked with COPD patients to avoid  functional decline, offer preventive services such as  immunizations, and treat complications early.
Community crisis center—care  coordination (case management)
High-risk patients with chronic psychiatric conditions  were redirected from the emergency room to the  psychiatric center for treatment.
A patient registry was used to identify diabetes patients  and create patient report cards, which displayed  treatment confirmation and treatment gaps.
Heart failure clinic—care coordination  (disease management)
Care managers monitored an automated system, which  recorded patients’ answers to health status questions,  and intervened if necessary.
Hospitalist program—care coordination  (case management)
Hospitalists worked with internists and family  practitioners to improve the communication and care  provided to patients at hospital discharge.
Electronic prescription system better reconciled patients’  medications between inpatient and outpatient settings to  reduce adverse events.
Nursing home staff educated on consulting a Billings  geriatrician before admitting patient to the hospital.
To coordinate nursing home and hospital care, physician  assistants were assigned to patients entering the  hospital’s emergency room from local nursing homes.
Cancer care/palliative care—care  coordination (case management)
Care managers assisted cancer patients and families in  coordinating, planning end-of-life care.
Health coaching—care coordination (case  management)
Care managers helped patients follow hospital post- discharge instructions, make physician appointments,  and take the correct medications and dosages.
Physicians received feedback through intranet, met with  management on identified issues.
Forms were placed on the front of patients’ medical  charts to remind physicians of CAD quality-of-care  measures.
A director position was created and charged with  coordinating program interventions and with overseeing  all care for Medicare patients.
Hypertension management program— care coordination (disease management)
A patient registry was used to identify patients with  hypertension and remind physicians to measure and  document patients’ blood pressure.
Program name and program type  Palliative care program—care  coordination (case management)
Care managers provided patients and families end-of-life  planning information on quality-of-life issues, alternative  living options, and in-home support.
Patient care coordination—care  coordination (case management)
Care managers coordinated inpatient and outpatient  care, helping to ensure proper discharge planning and  schedule follow-up appointments with physicians.
COPD management—care coordination  (disease management)
Care managers worked with patients to monitor their  health status and to encourage patients to visit their  physicians when necessary.
Congestive heart failure management— Care coordination (disease management)
Care managers monitored patients’ health status  through a voice recognition system and contacted  patients when their health status became problematic.
Diabetes disease management—care  coordination (disease management)
Care managers worked with patients to educate them on  managing diabetes.
Moderate risk case management—care  coordination (case management)
Care managers worked with patients to reduce risk  factors associated with potential future hospitalizations.
Postacute case management—care  coordination (case management)
Care managers contacted patients after a hospital  discharge to ensure that home health services were  received, correct medications taken, etc.
Anticoagulation—care coordination (case  management)
Pharmacists and physicians worked with patients during  a hospitalization to ensure prescriptions were correct  and to assist in the transition from inpatient to outpatient  care.
Cancer care management—care  coordination (disease management)
Care managers worked with colon, breast, and lung  cancer patients and their physicians to ensure that  evidence-based treatment guidelines are followed for  psychological, nutritional, and palliative care.
Chronic care management—care  coordination (case management)
Care managers educated patients admitted to the  hospital on disease self-management and proper  medication use.
Congestive heart failure (CHF)—care  coordination (disease management)
Care managers helped patients understand and follow  their post-discharge instructions.
Diabetes disease management—care  coordination (disease management)
Care managers worked with diabetes patients to  coordinate care across providers, provide in-person  patient education, and remind patients of appointments.
Certified diabetes educators assisted patients in  understanding diabetes self management tools.
Heart smart program—care coordination  (disease management)
Care managers provided case management services to  cardiac patients enrolled in home care services.
HomeMed program—care coordination  (case management)
Frail, elderly patients with multiple conditions receive a  telemedicine device in their home that monitors vital  signs.
Program name and program type  Anticoagulation—care coordination (case  management)
Care managers worked with patients to ensure that  dosages of the anticlotting drug Warfarin were adjusted  properly. Also educated patients on recognizing factors  that can influence anticoagulation such as diet, activity,  other medications, and other illnesses.
CHF management—care coordination  (disease management)
Care managers called patients to check on health status,  schedule physician visits, and answer questions.
Disease management, compass—care  coordination (disease management)
Care managers assisted patients with medication  management, appointments, and physician referral.
Outpatient case management—care  coordination (case management)
Care managers helped high-risk, high-cost patients  recently discharged from the hospital schedule follow-up  physician visits and learn of available resources.
Physicians and staff were educated on how to talk to  patients about palliative care.
Physicians and clinical staff were educated on evidence- based guidelines for chronic disease management.
Transition of care program—care  coordination (case management)
Nurses contacted patients after hospital discharges to  ensure patients made follow-up physician appointments.
Diabetes care management—care  coordination (disease management)
Care managers educated newly diagnosed diabetes  patients on diabetes self management.
During a 30-minute office visit, patients received an  evaluation of needs, health education, diagnoses,  prevention measures, and fitness counseling.
Heart failure care coordination—care  coordination (disease management)
Care managers monitored patients’ medication usage  and dietary regimes through an interactive voice  response system.
Patients telephoned a call center where nurses directed  them to care based on their symptoms.
Case management systems—care  coordination (case management)
Care managers provided care to high-risk patients  including coordination of inpatient and outpatient care  services and guidance on following treatment plans.
Disease management—care coordination  (disease management)
Care managers managed, educated, and coached  patients with chronic conditions.
CHF program (disease management)
Nurses assessed the health status of heart failure  patients.
Low-income patients were assisted in obtaining free  medications from pharmaceutical companies.
Program name and program type  Complex care coordination—care  coordination (case management)
Care managers monitor patients with multiple chronic  diseases and educate them on self management.
Post-discharge transitional care—care  coordination (case management)
Care managers provided education, medication  counseling, guidance on post-acute care treatment, and  assistance with making and getting to post-discharge  appointments.
section_title: Appendix III: Reported PGP Demonstration- Related Start-up and Operating Costs for New and Expanded Programs
subsections: section_title: University of Michigan Faculty Group Practice
paragraphs: Start-up investment expenditures for Integrated Resources for the Middlesex Area were not  available.
section_title: Appendix IV: Comments from the Centers for Medicare & Medicaid Services
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Thomas Walke, Assistant  Director; Jennie Apter; Kelly Barar; Zachary Gaumer; and Jennifer Rellick  made key contributions to this report.