The Centers for Medicare & Medicaid Services announced Thursday that all physician groups participating in the Physician Group Practice Demonstration have earned $16.7 million in incentive payments for improving the quality of care delivered to chronic disease patients.
The 10 groups earned the incentive payments under the CMS demonstration that rewards healthcare providers for improving health outcomes and coordinating the overall healthcare needs of Medicare patients with congestive heart failure, coronary artery disease, and diabetes mellitus.
The payments were for the second performance year of the project, covering April 1, 2006 through March 31, 2007. The initial three-year demonstration was extended for a fourth performance year, which runs through March 2009.
"We are paying for better outcomes and we are getting higher quality and more value for the Medicare dollar," said Kerry Weems, acting administrator of CMS. "These results show that by working in collaboration with the physician groups on new and innovative ways to reimburse for high quality care, we are on the right track to find a better way to pay physicians."
Weems said the physician groups achieved outstanding levels of performance by having "clinical champions" at the practice, redesigning clinical care processes, and investing in healthcare information technology. Enhancements to electronic health records and patient registries allowed practices to more easily identify gaps in care, alert physicians to these gaps during patient visits, and provide interim feedback on performance.
According to CMS, all 10 of the participating physician groups achieved benchmark or target performance on at least 25 of 27 quality markers for patients with diabetes, coronary artery disease and congestive heart failure.
The groups increased their quality scores an average of 9 percentage points across the diabetes mellitus measures, 11 percentage points across the heart failure measures, and 5 percentage points across the coronary artery disease measures.
The participating groups are:
- Billings Clinic, Billings, Mont.
- Dartmouth-Hitchcock Clinic, Bedford, N.H.
- The Everett Clinic, Everett, Wash.
- Forsyth Medical Group, Winston-Salem, N.C.
- Geisinger Clinic, Danville, Pa.
- Marshfield Clinic, Marshfield, Wis.
- Middlesex Health System, Middletown, Conn.
- Park Nicollet Health Services, St. Louis Park, Minn.
- St. John's Health System, Springfield, Mo.
- University of Michigan Faculty Group Practice, Ann Arbor, Mich.
Five of the physician groups - Forsyth Medical Group, Geisinger Clinic, Marshfield Clinic, St. John's Health System, and the University of Michigan Faculty Group Practice - achieved benchmark quality performance on all 27 quality measures.
In addition to achieving benchmark performance for quality, several physician groups also experienced favorable financial performance under the demonstration's performance payment methodology. For patients with diabetes or coronary artery disease, Medicare expenditures grew more slowly for beneficiaries assigned to the physician groups than for beneficiaries in the comparison group with the same conditions.
This lower expenditure growth for chronic conditions, as well as complex patients treated in the ambulatory and hospital settings, contributed to four physician groups sharing in savings for improving the overall efficiency of care they furnish their patients.
The four physician groups - Dartmouth-Hitchcock Clinic, The Everett Clinic, Marshfield Clinic, and the University of Michigan Faculty Group Practice - earned $13.8 million in performance payments for improving the quality and cost efficiency of care as their share of a total of $17.4 million in Medicare savings. CMS said this compares to two physician groups that earned $7.3 million in performance payments under the first year of the demonstration.
The PGP demonstration is one of CMS' "value-based purchasing" initiatives, the goal of which is to tie Medicare payments to performance on healthcare cost and quality measures. VBP is part of CMS' stated attempt to transform Medicare from a passive payer to an active purchaser of higher quality, more efficient healthcare.
A related VBP effort is the Physician Quality Reporting Initiative, which uses a pay-for-reporting approach. Under the PQRI, physicians and other healthcare professionals can earn incentive payments for reporting measurement data about the quality of care they provide to Medicare patients.
CMS is developing a Physician VBP Plan for moving from the PQRI pay-for-reporting approach to a performance-based approach for Medicare physician payments. The agency intends to glean lessons from the PGP Demonstration in developing the performance-based payment plan.
All physician groups participating in the PGP Demonstration received at least 96 percent of their PQRI incentive payments, with five groups earning 100 percent of their incentive payments. A total of $2.9 million in PQRI incentive payments was paid out to the 10 groups under the demonstration.