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Roy Vaughn, BCBST

Patient-Centered Medical Home Pilot to Provide Early Tests

Across the nation, healthcare reform is a hot topic, and one major element of that discussion is provider-payment reform. Although several models have emerged, the trend seems to be a movement away from the current payment system of volume driven, fee-for-service toward reimbursement tied to performance or outcome, with a goal of aligning payment with value. Proponents of this method feel it results in improved coordination of care and more effective disease management, which is expected to result in better quality and lower costs for patients.

"The economy and healthcare reform are on everyone's mind," said Roy Vaughn, director of communications for BlueCross BlueShield of Tennessee (BCBST). "We know most chronic conditions are preventable and, therefore, so are the costs. We believe there is a need to take a more holistic approach to health, while partnering with physicians to design programs that are in line with what they as doctors want to accomplish for their patients. BCBST is taking steps in this direction."

"Fee-for-service reimbursement methods provide incentives to do more services, procedures and tests, which have the unintended effect of making it more costly," said Robert J. Mandel, MD, senior vice president of healthcare services for BCBST. His responsibilities include overall clinical strategy, transformative medical management delivery, clinical network operations, strategic medical policy positioning and clinical operational success of commercial business and established market units.

Value-based reimbursement is an evolution of the payment system to focus on outcomes, said Mandel, who holds a master's degree in business administration from the Wharton School of Business, is a graduate of the American Association of Health Plan's Leadership Program and worked with BlueCross BlueShield of Massachusetts as vice president of healthcare services before taking the position in Tennessee.

"One driving force behind this movement is that in spite of the fact that as a country we invest more in healthcare than other nations, we rank lower in outcomes than we should and therefore we are not getting as much value from this investment," he added. "The current healthcare system's focus is on delivery — not outcome. We need to evaluate how we align our benefit – and our payment – structure to match a more holistic approach. Such a reimbursement method needs to support a strong primary care base that can effectively manage a patient's overall health."

Although we do not have data from other insurance providers, we do have access to information from Medicaid and TennCare that we can combine with our subscriber information," said Mandel. "By tracking our members' claims data, we have health information to share with physicians that gives them a tool to manage treatments and diagnosis. We all share the same goal — high quality care with good healthcare outcomes for patients."

"There are a number of ways in which we measure outcomes, all of which are nationally accepted," Mandel explained. "Our standards come from sources such as the National Quality Forum, the Joint Commission, the National Committee for Quality Assurance, and the Center for Medicare and Medicaid Services (CMS). We look at these measures across the patient population for a physician and provide incentives for achieving certain levels of performance in those measures."

One early element of this transformational shift is the "medical home," which can also be called a "patient-centered" or "advanced" medical home. This concept involves a physician practice, usually primary care, taking the role of providing and coordinating care that is both appropriate and timely. This payment model typically includes a fee for case-management and pay for performance that supports optimal preventive and chronic-disease care.

BlueCross BlueShield has patient-centered medical home pilot programs in Memphis and Cookeville, with plans to add six more programs by year end. The pilot programs look at five chronic diseases, said Mandel. "We know these patients' care will need to be closely monitored, so as a part of the reimbursement, we pay the physician a monthly management fee for the time spent in coordinating care. Reimbursement is also tied to quality measures with incentives attached. By changing the payment a bit, we are trying to keep these chronically ill patients' at their optimum health status and reduce the need for acute interventions."

BlueCross Blue Shield will evaluate these programs for at least a year to see that both sides feel they are getting a higher value and that patients are receiving better care, added Mandel. "We would like to have eight of these pilot groups in place by the end of the year. Local representatives from organizations such as the American Academy of Family Practice and the American College of Physicians are helping us identify practices that would be good candidates and are interested in participating in the program.

We do not think it will necessarily reduce what we spend on healthcare, but hope that it will reduce the rate of increase while increasing quality," he explained, adding that it will mean more information to patients and an improvement in their health and well-being. The focus is on keeping people healthy and engaged in that process. This just helps to structure a relationship that fosters that.

"I think we are going to see our entire delivery system transformed, and reimbursement that focuses on outcome and is value-based is one important part of it," said Mandel. "In regard to health status, Tennessee ranks 47 out of 50, so we see a lot of opportunity for improvement, and we want to support the provider community in doing that."

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