Medical homesteading: Moving forward with care coordination

With a Medicare medical home project behind schedule, some physician practices have forged ahead without the federal government's help.

By — Posted July 6, 2009

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At first, the Cranford Family Practice in Cranford, N.J., did not appear to be the most logical choice to be a pioneer of the patient-centered medical home concept. For starters, the single-physician practice did not have a very robust disease registry to track patients across care settings. It also had limited electronic communication with patients, and it did not regularly host group visits for patients with related diseases or illnesses.

But by participating in a national demonstration project with 35 other small- and medium-sized family practices, family physician Robert Eidus, MD, helped his practice realize its potential to serve as a medical home by strengthening its resources.

"For some practices, this was completely new," Dr. Eidus said. "But others had been working in this direction for many years, and this was a catalyst to keep moving in this direction and foster patient care."

The demonstration was sponsored by TransforMED, a wholly owned, for-profit subsidiary of the American Academy of Family Physicians that offers medical home products and consulting services. Similar projects are under way in numerous states involving physician practices of all sizes, employers, insurance companies and state governments. They hope to show that medical homes can improve care and reduce costs by providing patients access to dedicated physician practices that manage and coordinate their care.

The federal government has yet to follow suit. A major Medicare demonstration in eight states that will pay higher rates to selected practices that serve as medical homes was supposed to have started recruiting participants in January 2009. That initiative has now been delayed.

The Centers for Medicare & Medicaid Services cited the arrival of a new administration as one of the main reasons for the holdup. But at this article's deadline, the White House Office of Management and Budget also was taking a closer look at the projected budget for the project. Under the plan, the extra medical home payments per physician could run in the thousands of dollars per month, though CMS officials said they hoped the investment would save money over the long run through reduced hospitalizations and lower medical costs.

Until Medicare has a chance to try out medical homes, physicians exploring the concept will need to look for feedback from physicians who have pursued other avenues. Those on the cutting edge of the medical home concept hope these early pioneers will show how medical homes can work. The lessons for Congress and other policymakers already are coming out.

"One of the problems is that it can be expensive, and it can be impractical for some practices," Dr. Eidus said. "Unless, of course, there are changes to the external reimbursement."

An initial analysis of the TransforMED project's results indicated that medical home implementation "consumes an inordinate amount of time, energy and dollars," according to a report in the May/June Annals of Family Medicine(link).

TransforMED expects to release a final analysis by the end of the year.

The persistent problem of pay

Until the Medicare demonstration launches or lawmakers decide to change the payment system, physicians will not receive one federal dollar more for coordinating their patients' care through a medical home. Many doctors see that as the main barrier. But some private insurers have started putting their own money toward the concept.

David Lainoff, MD, was able to take advantage of such financial help by hiring a nurse to work as a case manager with his diabetic patients. He's an internist and medical director of Crozer Medical Associates in Eddystone and Media, Pa., part of the Crozer-Keystone Health System. Dr. Lainoff's eight-person practice has been one of 32 participants in the Southeast Pennsylvania Collaborative, a three-year medical home program that launched in May 2008. It's part of a comprehensive effort by Pennsylvania Gov. Edward G. Rendell to help control health care costs and involve insurance companies in patient-centered medical home planning.

When the program began, only about 40% of Crozer's diabetic patients had received a recommended foot exam. A year into the program, Dr. Lainoff estimates that the number grew to 90%.

Dr. Lainoff credits the financial involvement of the insurance companies for the success of the collaborative, which Rendell is expanding to the entire state. Six insurers committed to paying the practices up to $13 million over the course of the project to meet certain performance goals.

Other insurers and states have begun to pay for medical homes. Blue Cross Blue Shield of Michigan, for instance, recently said it would spend $60 million in 2009 to help more practices meet the National Committee on Quality Assurance's three-tiered system of patient-centered medical home standards. Community Care of North Carolina coordinates services for nearly 1 million Medicaid beneficiaries across the state. CIGNA HealthCare and the Dartmouth-Hitchcock physician group practice have been conducting a medical home demonstration in New Hampshire for a year.

The American Medical Association sees many potential benefits in paying more for patient-centered medical homes, but it insists that programs not become too restrictive. "In the past, some attempts to change health care have been seen as a gatekeeper process, and no one wants to see the medical home become like that," said Robert M. Wah, MD, an AMA Board of Trustees member.

The AMA also opposes budget-neutral policies for medical homes that take money from other physician services to fund the coordination. Dr. Wah said medical homes instead should be seen as an "elevation of services," requiring additional funding.

Startup costs

Obtaining an electronic medical records system is the first step toward becoming a medical home, and that can take a financial toll at first, said Kim Leatham, MD, an internist and family physician with the Virginia Mason Medical Center, a network of primary and specialty care clinics based in Seattle that is also a part of TransforMED's demonstration. "It's tough being an early adopter."

Dr. Leatham is one of many doctors anxiously waiting for the federal government to get in the game. "Doing it one insurance group at a time is never going to be comprehensive," she said. "Regardless of who pays for it, someone has to lead the way in identifying the system and making it happen. CMS has a lot of research and analysis that can show if it's working, and I think that's what it's going to take."

Some physicians have managed to be medical home early adopters without being paid any more for their services, but those practices appear to be relatively rare.

Speaking before the Senate Health, Education, Labor and Pensions Committee in May, Marsha Raulerson, MD, a pediatrician in Brewton, Ala., noted that the American Academy of Pediatrics first used the term "medical home" in 1967 and published its first statement defining it in 1992. She started practicing in 1981 and has considered her office to be a patient-centered medical home since soon after that time. Still, she testified that most physicians need financial help to adopt health information technology and other required resources.

Return on investment

Despite the money and effort required, some medical home pioneers say they already have gained invaluable experience.

Allan Crimm, MD, is an internist and managing partner of Ninth Street Internal Medicine, a nine-person practice based in Philadelphia that also participates in the Southeast Pennsylvania Collaborative. He feels that the medical home concept must be an integral part of lawmakers' health system reform discussions.

Dr. Crimm's practice did not at first have all of the components of a standard medical home model. And even after they were in place, he realized that a home requires a new way of thinking in addition to new resources.

"We started using an electronic medical record three years ago, and it drastically changed our workflow and tasks," he said. "But we felt like something was missing. We had this new system, but we were basically doing the same thing as before, but just not recording the data with pen and paper. It wasn't changing anything regarding our clinical endeavors. We needed to figure out how to use the tool."

Like some other pioneers, the physicians in Dr. Crimm's practice wandered alone for a while before encountering others with whom they could collaborate. By developing a system of care for patients that involves teaming up with other physicians as well as nurses, care coordinators, consulting pharmacists and social workers, some of these practices are finding their way.

The team approach is essential, Dr. Eidus said. "Otherwise, you have all of this rich data which you cannot act upon."

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How much will Medicare pay?

Although it has been delayed, an eight-state Medicare demonstration project would pay more to selected primary care practices that agree to be patient-centered medical homes for volunteer beneficiaries. In the demo, a medical home would be placed in one of three tiers based on how comprehensively the practice has adopted the concept. If CMS follows the 2008 recommendations of the AMA/Specialty Society RVS Update Committee, the additional Medicare payments could be significant. The following RUC estimates are for a hypothetical practice with one doctor, one nurse case manager and 250 participating beneficiaries:

Tier 1Tier 2Tier 3
Case manager$5,145$6,965$8,841
Professional liability insurance$190$190$190
Electronic medical record$0$50$1,015
Patient education booklet$97$97$97
Month total$7,796$10,139$13,489
Year total$93,555$121,671$161,871

Note: Figures are rounded and are based on the 2008 Medicare conversion factor.

Source: American Medical Association/Specialty Society RVS Update Committee

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Medical home legislation

Lawmakers have not decided whether patient-centered medical home provisions will make it into any of the major health system reform bills Congress is considering this year. But if they do, one likely source could be a bill introduced in May by Rep. Allyson Schwartz (D, Pa.) that seeks to address the growing shortage of primary care physicians in part by boosting incentives for medical home practices and coordinated care. The bill, which has more than 100 co-sponsors, would:

  • Adjust Medicare budget neutrality rules to reward primary care practices for using care coordination to reduce avoidable hospital admissions for patients with chronic diseases.
  • Require that Medicare transition to a new national payment methodology for qualified patient-centered medical homes that will expand upon the pending eight-state demonstration project.
  • Direct Medicare to pay -- on a fee-for-service basis -- for specific care coordination services that have been shown to improve outcomes for patients with chronic illnesses.
  • Provide grants to states to incorporate the patient-centered medical home concept into Medicaid and the Children's Health Insurance Program.
  • Set aside funding for quality improvement organizations to assist small- and medium-sized practices in becoming patient-centered medical homes.

Source: Preserving Patient Access to Primary Care Act of 2009 (link)

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Medical homes: Who gets paid?

Many physician organizations and policy experts agree that the federal government should pay more to practices that serve as patient-centered medical homes. But heated debate continues over what types of practices should qualify.

In developing a pending Medicare medical home demonstration project, the Centers for Medicare & Medicaid Services indicated that it largely based its definition of a patient-centered medical home upon literature from the American College of Physicians. The ACP represents internists, who, along with family doctors and geriatricians, are considered to be the more traditional examples of primary care physicians.

CMS also excluded certain specialties and subspecialties, including radiology, pathology, anesthesiology, dermatology, ophthalmology, emergency medicine, psychiatry and surgery. Specialists are concerned that the deck is stacked too heavily in favor of primary care.

"If medical home or other innovative delivery systems are to succeed, there must be collaboration between primary care and specialty medicine," Steven Schlossberg, MD, said at a May hearing before the Senate Health, Education, Labor and Pensions Committee. He is chair of health policy at the American Urological Assn., which is a member of the Alliance of Specialty Medicine. "Primary care will not always be the most cost-efficient and effective provider for every condition and disease."

Dr. Schlossberg said policymakers should think in terms of identifying a "principal" physician -- and not always assume it will be a primary care doctor. Specialists note that a woman might consider a gynecologist to be her primary physician, while a patient with prostate cancer might want a urologist in that position.

The AMA says patients should be able to choose physicians from a range of practices and specialties to serve as their key coordinators in a medical home.

"It's not so important to think about whether the physician is in a specialty practice or primary care setting, but more about what the services and benefits are that a patient gets through a patient-centered medical home," said Robert M. Wah, MD, an AMA Board of Trustees member.

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