The Physician Group Practice (PGP) demonstration project championed by the Centers for Medicare & Medicaid Services has resulted in quality improvements and Medicare savings and resulted in $110 million in incentive payments CMS announced Monday.
As in past years the bulk of the savings in the program were generated by a handful of the 10 participating practices. Four of the 10 groups participating accounted for $29.4 million of the $36.2 million Medicare saved during the year.
"We were very pleased that the results resulted in quality improvement and savings," said Shari Erickson, director, regulatory and insurer affairs, American College of Physicians, in response to CMS' announcement. "It's something that we have seen in numerous anecdotal cases with regard to the approaches that were taken, in terms of more coordinated care using evidence-based clinical guidelines, disease registries, dashboards – all of these approaches – improving their work flows to improve care management. . . . But this demonstration is really helpful in terms that it really confirms that on a larger scale we can take that forward in terms of other patient medical centered home projects as well as the accountable care organization project that CMS and others will be taking on."
The PGP demonstration was created as the first pay-for-performance initiative for doctors under the Medicare program. The program provided incentives for participants to coordinate care and improve quality and cost efficiency. During the demonstration, physicians continued to receive payment under regular Medicare fee schedules. The physician groups could earn performance payments of up to 80 percent of the savings they generated. Medicare retained at least 20 percent of the savings generated.
Of the 10 groups in the demonstration, seven achieved benchmark performance on all 32 performance measures in year five. The other three achieved benchmark performance on at least 30 of the 32 measures. In the first year of the demonstration, only two of the groups achieved benchmark performance on all measures.
Over the course of the demonstration, the physician groups also improved their quality scores, as follows:
- 11 percentage points on diabetes measures
- 12.4 percentage points on heart failure measures
- 6 percentage points on coronary artery disease measures
- 9.2 percentage points on cancer screening measures
- 3.8 percentage points on hypertension measures
All 10 of the physician groups that have participated in the demonstration project are taking part in the new PGP Transition demonstration, a two-year supplement to the original project that begin on Jan. 1, 2011.
CMS expects the transition project will provide more performance data and additional insights on how to sustain fee-for-performance models. The project will also continue to provide incentives. In order to share in the savings, participants will need to demonstrate lower growth in Medicare costs relative to a national benchmark.
"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," said CMS Administrator Donald Berwick, MD, in a statement. "The continued movement towards shared savings programs is beneficial for the both providers and their patients."
Practices 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