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Amid PCMH Funding Concerns, URAC Seeks Sustainable Solution

Tuesday, August 16th, 2016

For those desiring increased coordination and value-based delivery of care, the patient centered medical home (PCMH) is a popular model. In fact, the proposed rule that was recently released for the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA) encourages physician and clinician participation in certified PCMH practices to ensure compliance.

TH PDF graphicOutside of MACRA, promotion of PCMH development in general has grown substantially. Only 26 PCMH-related incentive programs reportedly existed back in 2009. There are now over 160 organizations working to stimulate PCMH transformation.

Even with all of this encouragement, practices still report that costs associated with PCMH transformation are posing a significant barrier to broader adoption of the model. Studies are now backing up the claims about costs.

The desire to want to participate in and promote PCMH transformation is understandable. PCMH practices are designed to provide comprehensive, individualized services aimed at delivering the right care in the right setting at the right time. In its latest annual assessment of recent PCMH studies, the Patient-Centered Primary Care Collaborative reported “a clear trend showing that the medical home drives reductions in health care costs and/or unnecessary utilization.” This included 21 of 23 studies showing a cost savings among PCMHs and 23 of 25 showing a reduction in utilization of services.

Transformation, however, creates new expenses for participating practices in areas such as staffing and technology. This can put off many practices from taking steps toward becoming a PCMH. To offset these additional costs, public and commercial payers may offer enhanced reimbursements to PCMHs in the form of additional per-member/per-month payments.

Despite the incentives, the overall investment in PCMH transformation remains a significant barrier in the promotion of more accountable care. In particular, the process can be daunting for small and independent practices. Two studies are illustrative of the problem:

  • A regional study of costs associated with sustaining a PCMH, published in the Annals of Family Medicine in 2015, revealed that the average cost per full-time equivalent primary care clinician was $7,691 per month for Utah practices and $9,658 for practices in Colorado (costs varied across practices). PCMH incremental costs per encounter were $32.71 in Utah and $36.68 in Colorado.
  • A more recent study, this one published in 2016 in the Journal of General Internal Medicine, found similar concerns about estimated costs for PCMH practices participating in the Pennsylvania Chronic Care Initiative (PACCI). The PACCI was a statewide, multi-payer PCMH pilot program. It was determined to have successfully reduced costly procedures while improving overall care. But practices incurred a median cost of $30,991 each associated with their PCMH transformation – equivalent to $9,814 per clinician and $8 per patient. The study also found the median ongoing annual cost associated with transformation was $147,573 per practice – an equivalent of $64,768 per clinician and $30 per patient. In the PACCI study, as much as 60% of the costs associated with PCMH transformation were attributed to care management activities. Costs were found to be a greater burden on small and independent practices, as opposed to large and system-affiliated practices.

Adding to the problem, safety net health centers providing primary care to underserved, minority, and low-income patients may face unique challenges related to PCMH transformation. This can include more frequent staff turnover and patients with complex needs. These specific providers may also have issues securing the steady funding streams that are considered necessary to building and maintaining a PCMH organization.

While some would simply argue more money must be inserted into the delivery system to address some practices’ problems, URAC considers this an unrealistic solution given current pressures to reduce costs if alternatives can be tested. With this in mind, URAC restructured its PCMH certification program to ease the initial burden practices face when pursuing their PCMH transformation.

Rather than relying on adherence to a checklist, URAC instead engages practices by phasing in required capabilities. URAC’s certification is designed to help willing practices more effectively handle the challenges that practice innovation related to PCMH transformation can enact on smaller providers.

URAC embraces the idea that the best way to begin the transformation process is to utilize existing resources. It enables a reasonable time frame for acquisition. This sustainable PCMH transformation is a step-wise approach. Participating practices can focus on building foundational capabilities and spread out their costs and development over a longer period of time. It can create a solid and sustainable PCMH framework instead of just meeting certification requirements at a single point in time. At the same time, the process is designed to remain in complete parity with existing national expectations for a PCMH.

In drawing from lessons learned through past demonstration projects and early industry efforts, URAC’s PCMH certification features three levels of recognition and an optional health information technology designation. Provided materials help practices assess their level of accomplishment. The unique design also allows practices to advance by meeting key milestones and quality standards over time. Additionally, internal practice “champions” can help facilitate PCMH development meant to positively impact the health status of their communities.

As providers fear and studies document, the development of a PCMH practice can be a resource-intense investment. But, as other studies point out, it’s still a worthwhile endeavor that addresses the national health care goal of delivering more accountable care.

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