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United to attach performance conditions to more doctors' pay

The nation's largest health plan wants to have at least 50% of its network under "value-based contracting" by 2015.

By Emily Berry — Posted Feb. 29, 2012

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Like its competitors WellPoint and Aetna, UnitedHealth Group says it is planning a large-scale overhaul of the way it pays physicians.

United is ramping up the number of incentive programs it offers so that at least half of its network physicians will be earning bonuses in recognition of value, quality and efficiency within a few years. The Minnetonka, Minn.-based insurer is the largest in the country by both membership and revenue, and its physician network includes doctors in every state.

In January, United began notifying employers of its plans to begin "value-based contracting," from about 2% of its contracted physicians to between 50% and 70% of its network by 2015, according to documents provided by spokesman Tyler Mason.

The company's outreach comes as WellPoint and Aetna make their own changes to their primary care payment method and amounts.

In January, Aetna said it will begin paying $2- or $3-per-member monthly bonuses to physicians at practices certified as patient-centered medical homes. WellPoint said in January that it will begin paying on average 10% more to primary care physicians who agree to adopt patient-centered care methods -- without requiring certification as patient-centered medical homes.

United defines "value-based contracting" as payment methodologies that include pay-for-performance based on quality and/or efficiency scores, as well as those that include incentives for integrating technology into care or adopting an accountable care model.

United plans to accomplish the expansion of its value-based contracting under the auspices of three programs:

  • "Primary care physician incentive" payment programs in a handful of markets, estimated to pay physicians bonuses of between $1 and $3 per member per month.
  • Twenty-one patient-centered medical home pilot programs already under way, where incentive payment ranges have yet to be determined.
  • Between eight and 10 accountable care "shared savings" pilots to be launched this year, resulting in additional payments of between $1 and $5 per member per month.

United introduced its first primary care incentive program in Rhode Island this year and expects to have three or four more up and running by the end of the year, in locations to be determined. The patient-centered medical home pilot programs already in place include 1,200 physicians caring for more than half a million patients in 13 states, according to the company's documents.

United, WellPoint and Aetna aren't necessarily the vanguards when it comes to payment reform, but their announcements are a big deal because of their scale, said Lisa Bielamowicz, MD, a managing director and national physician practice leader for The Advisory Board Co., a research, consulting and technology firm serving academic and health care organizations.

"They're not the first mover. They are the fast, big follower," she said. "This means a majority of [primary care physicians] out there will have this kind of contracting and incentives available to them."

Where health plans are simply paying more to primary care physicians in lieu of complicated risk arrangements or pay-for-performance programs, she said, the insurers are extending a financial "lifeline" to doctors under financial distress. Those straightforward boosts in pay are likely to be replaced by arrangements that involve physicians taking on risk.

"I do think we'll see reimbursement models still continue to evolve," she said. "I don't think payers are done figuring out strategy."

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