The Centers for Medicare & Medicaid Services recently announced that the five-year Physician Group Practice Demonstration project has resulted in quality improvements and Medicare savings and resulted in $110 million in incentive payments.
The PGP, which started in 2006 as a pay-for-performance model program, has reported ongoing improvements in quality of care among the ten participating health systems and has shown modest results in terms of reducing overall healthcare expenditures.
Based on the ongoing success of the program CMS announced a two-year extension of the program through 2012 called the PGP Transition Demonstration. The hope is that lessons learned in the PGP program can be used broadly across provider organizations as CMS looks to promote the creation of accountable care organizations.
[See also: KPMG: Providers, payers hesitant about Medicare ACO participation; Top 4 obstacles to ACO formation]
"As we work to help bring care coordination to a broader set of providers through accountable care organizations, the lessons learned by this demonstration provide great insight into how to use Medicare's payment systems to improve quality while reducing costs," said CMS Administrator Donald M. Berwick, MD, in announcing the latest results fro the PGP. "We have learned to invest in sustained improvement over time, and that short-term comparisons between start-up costs and measureable results may fail to realize the long-term value of these efforts."
One standout in the program has been Wisconsin's Marshfield Clinic, one of four organizations to split 2010 incentive payments totaling $29.4 million. Of that total, Marshfield took home the lion's share – just short of $16 million. Others receiving incentive payments for 2010 were Park Nicollet Health Services, St. Louis Park, Minn.; St. John's Health System, Springfield, Mo. and University of Michigan Faculty Group Practice, Ann Arbor, Mich.
The incentive payment to Marshfield will be used to fund other initiatives aimed at improving the quality of care within the system, said Theodore A. Praxel, MD, medical director, Institute for Quality, Innovation & Patient Safety.
"The performance payment Marshfield Clinic receives will allow us to continue beneficial health care activities that are not currently reimbursed by most insurers right now," Praxel added.
As a group, the practices improved their quality scores in a number of areas by an average of:
- 11.0 percent on diabetes measures;
- 12.4 percent on heart failure measures;
- 6.0 percent on coronary artery disease measures;
- 9.2 percent on cancer screening measures and
- 3.8 percent on hypertension measures.
As the ten provider groups move to the next two years under the PGP Transition Demonstration, they will need to show lower growth of Medicare costs relative to national averages in order to receive additional shared savings incentive payments. The extension of the program also includes new areas of focus including chart-based measures, composite measures and patient experience measures.
"We are optimistic that these groups that participated in the both the initial PGP Demonstration and the new PGP Transition Demonstration will continue to show improved quality and generate shared savings for the Medicare program," added Berwick. "The continued movement towards shared savings programs is beneficial for the both providers and their patients."
Providers participating in the PGP are:
- Billings Clinic, Billings, Montana
- Dartmouth-Hitchcock Clinic, Bedford, New Hampshire
- The Everett Clinic, Everett, Washington
- Forsyth Medical Group, Winston-Salem, North Carolina
- Geisinger Health System, Danville, Pennsylvania
- Marshfield Clinic, Marshfield, Wisconsin
- Middlesex Health System, Middletown, Connecticut
- Park Nicollet Health Services, St. Louis Park, Minnesota
- St. John's Health System, Springfield, Missouri
- University of Michigan Faculty Group Practice, Ann Arbor, Michigan