Medical Home Reimbursement ABCs: Funding Care Delivery through ACOs, Bundled Payments and Concrete Contracts

Patient-centered medical home (PCMH) pilots in high gear around the country, and early results indicate that the PCMH model can deliver quality care at no added cost. However, no single reimbursement strategy for the PCMH is garnering both payor and provider support at the contract negotiating table. Among financial models getting a test run as healthcare reform unfolds are accountable care organizations (ACOs) and bundled payments also known as episode-based payments or case rates. Medical Home Reimbursement ABCs: Funding Care Delivery through ACOs, Bundled Payments and Concrete Contracts provides a primer on emerging reimbursement models that are getting providers' attention while delivering cost savings. This 50-page report profiles three healthcare organizations that are redefining healthcare reimbursement with their pilots of new payment models and contracting strategies: ACOs: When Dean Health System reengineered its practice as an ACO a network of primary care physicians, one or more hospitals and subspecialists that provide patient-centered care it noticed tremendous improvements in patient satisfaction and access, HEDIS and quality scores and membership numbers. The health system is now third in Wisconsin, the state ranked first for healthcare by the NCQA. Dean Health System President and CEO Dr. Craig Samitt, M.B.A., describes the recruiting, incentives and performance management strategies built into the ACO model, also known as a multispecialty group, a medical neighborhood, an integrated delivery network (IDN) or an integrated delivery system (IDS). Bundled Payments: Baptist Health System experienced a "Hallmark moment" when it distributed gainshare checks to providers participating in the CMS Acute Care Episode (ACE) pilot. Michael Zucker, chief development officer for Baptist Health System, describes the motivation, preparation, experience and lessons learned thus far from Baptist's participation in the CMS demo. He provides a frank look at the challenges of structuring payments, adjusting for severity, engaging physicians and vendors, coordinating and negotiating services and preparing for transition to real-life application. Contracts: As a member of the contracting team for the Dartmouth-Hitchcock Medical Center (DHMC) medical home program and a provider herself, senior medical director Barbara Walters, M.D., has earned her negotiating stripes. Experienced in negotiations with public and private payors, Dr. Walters has helped to shape financial foundations for DHMC's participation in CMS's Group Physician Practice demo for Medicare beneficiaries; a partnership with Cigna to create a medical home pilot whose reimbursement structure starts with quality, not cost; and the separate New Hampshire Citizens Health Initiative, a multi-site multi-stakeholder medical home pilot. Dr. Walters brings the industry up to speed on DHMC's negotiating activities over the last year, describing how to represent providers' interests through effective negotiations and contracts with payors for the medical home model of care. This report is designed for healthcare organizations wishing to decipher the alphabet soup of healthcare reimbursement models, as explained by these early pioneers of healthcare payment models.