ACP American College of Physicians - Internal Medicine - Doctors for Adults

The Three-Part Payment Model

The major primary care physician groups and the Patient-Centered Primary Care Collaborative (PCPCC) believe that the most effective way to re-align payment incentives to support the Patient-Centered Medical Home would be to combine traditional fee-for-service for office visits with a three-part model that includes:

• A monthly care coordination payment (“bundled care coordination fee” that is risk adjusted and reflective of the practice’s service capability based on the NCQA PPC-PCMH recognition process) for the physician and non-physcian work that falls outside of a face-to-face visit and for the system infrastucture (e.g. heath information technologies) needed to achieve better outcomes.

• A visit-based fee-for-service component that recognizes visit-based services that are currently paid under the present fee-for-service payment system and maintains an incentive for the physician to see the patient in an office-visit when appropriate.

• A performance-based component that recognizes achievement of quality and efficiency goals.

A more detailed description of this payment model can be found in: A System in Need of Change: Restructuring Payment Policies to Support Patient-Centered Care (an ACP policy paper).

Cost

The cost for a practice to implement these services will vary based on several factors, such as practice size, existing practice capabilities, the costs of new capabilities required to “ramp up” to be a qualified PCMH, availability of low-cost or subsidized practice and patient-support resources, and characteristics of the patient population being treated. More complete information is currently being developed through the following sources:

• A research report sponsored by the American College of Physicians with support from the Commonwealth Fund titled: Incremental Cost Estimates for the Patient-Centered Medical Home. Zuckerman, S. et al. October 16, 2009.

• Efforts of the American Medical Association’s Relative Value Update Committee (RUC) to evaluate the work and practice expense values of services to be provided within the Medicare Medical Home demonstration project.

• Data from the multiple private sector Patient-Centered Medical Home demonstration projects throughout the country currently under development or in progress (more information on these projects).

Are the NCQA PPC-PCMH recognition fees being covered for the demonstration projects? If so, how?

Yes, in most cases these fees are being covered. However, how this is occurring is variable. In many of the projects, a prospective "care coordination" fee paid upon achievement of PPC-PCMH recognition is expected to cover the cost of recognition. This does mean that the practice will pay for the recognition up front, but then will get it back about a month later, once they achieve that recognition. Other projects are asking the payers to provide a separate up-front infrastructure payment—prior to PPC-PCMH recognition—that includes the recognition fee in addition to other items, such as technology and staff (e.g., Southeastern Pennsylvania Rollout of the Chronic Care Initiative). Still others are paying the recognition fee up-front for the participating practices through a means other than the payers, such as by a grant or another participating stakeholder (e.g., New York Hudson Valley P4P/Medical Home Project).

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