Jumping into collaboration with payers, creates opportunities for physicians

The unthinkable is occurring, physicians collaborating with payers, collaborations with the “dark side”. It is happening, and it actually can be successful, that is successful, but not without stress. More importantly, it needs to be successful, for the sake of physicians, their finances and their patients.

Stimulated by a commitment on the part of the Federal Government to tie physician reimbursement to quality and outcomes, and the potential of ACOs (accountable care organizations), commercial payers have sought to harness, for their benefit, this evolving change in the dynamics of care delivery. The concept is very simple, empower physicians (with and without hospital partners) to design, implement and operate their own clinically integrated network, and if it can be successful in meeting quality and cost measures, the physicians (and their hospital partners) derive an economic upside. To get providers involved, performance results in economic rewards. 

Historically the general theme of the physician-payer relationship has been one of friction and conflict. Physicians viewed payers as nefarious enterprises striving to reduce their income with burdensome bureaucrats that interfere with patient care. For the payer’s part, the medical community has been viewed as completely principally economically self-interested, with patient wellbeing secondary as dollars have dominated the conversations.

Both payers and physicians approach collaboration with a great deal of cynicism. Both have to mature their understandings of each other and internalize the fact that they need an expertise that each has, and that together they can work towards, and achieve what both desire.

For the payers, it is lowering the rate of cost increases, which only translate into higher premiums for employers and consumers alike. For physicians, it is a financial upside for achieving measures of quality and cost containment. For physicians, who control 85% of medical costs with their prescription pads and treatment plans actually benefiting from delivering better care, faster, and yes cheaper.

One key point in understanding that is necessary for physicians is to internalize what is the new world for health plans. Under Health Reform, The Accountable Care Act, health plans must spend 85% (80% for small groups) of premiums on medical care, with 15% (20% on small groups) allowed for administrative costs, including sales and marketing, and yes also including profit. If a plan spends more than the 85%, they must absorb the loss, if they spend less; they have to refund those dollars to the whomever pays for the policy. In essence, payers need the expertise and creativity of physicians just to survive. Years of payer efforts to mandate utilization controls have clearly failed to stem the rising costs of care delivery.

The key point of understanding that is necessary for payers is that the vast majority of physicians are truly committed to quality, and effective care delivery. Yes, physicians want to be paid, and paid appropriately, and given the information and support they are prepared to earn it through performance. Payers need as well to understand that physicians, who are closes to the needs of the patients and the deficiencies in the system of care delivery have the greatest potential for improving care quality and cost, if engaged.

Commercial payers are seeking out physicians and providers that are prepared to take on for the commercial patients the same responsibility, and rewards, as are being promoted under the Federal ACO program. Both physicians/hospitals and commercial plans are aggressively seeking out these opportunities to work with each other.

There are two factors driving provider engagement with payers, first the expectation that currently there is a window of opportunity to begin clinical integrations and shared savings with upside only benefits, early before there is a forced move to risk sharing, with its downside consequences, and secondly to capture patient volume within a collective of physicians and hospitals. Can a collective use this “window” to learn how to work together, to build an infrastructure now, so that when and if risk sharing becomes the norm in physician reimbursement, they will have the potential of success? And as patient volume becomes increasingly changed as patient financial responsibilities increasingly are motivating a reduction in visits to physicians, can the collective become self-promoting in the aggregate to replace lost volume and capture new volume?

In the case of University Physicians Network, working with NYU Medical Center, the motivation to be early adopters has been to learn how to ride the bicycle now, before the training wheels come off. And together a new entity was created NYUPN Clinically Integrated Network (CIN). It has been tasked to seek out opportunities for collaboration with payers and to build and operate an infrastructure to support those efforts.

Each payer has its own world view in approaching working with our CIN. Some more prepared than others, some more sophisticated to support the effort than others, and some more flexible than others. 

Now with six “shared savings” arrangements in place and operational, there are some observations are shared as to what is involved, and the impact.

One of the greatest leaps in understanding is the concept of attribution.  Just who is the patient that this CIN (Clinically Integrated Network) is responsible? Attribution is the methodology that assigns the responsibility for specific patients to the CIN and to the individual physicians. It’s not a perfect science, and each contact with a payer can calculate attribution differently, but a simple explanation is; attribution is a formula that seeks to assign the costs and quality of care delivered to that physician that most likely has the greatest contact/influence over a patient’s care. This means that claims data is used to see where patients get their primary care services, and then attribute the responsibility of preventive and routine care to that primary care physician. Likewise looking at the volume or cost of services paid to a particular provider will identify for attribution the specialist most responsible for the care of that patient. For purposes of patients being counted in the shared savings agreement, those whose primary care physician, and principal specialist is in the CIN’s provider’s network are counted.

Every physician has difficulty with the concept of attribution, for every physician will tell the antidotal tales of the patients that won’t come in for preventive services, that they haven’t seen before that patient headed out to a specialist, or a similar tale of why they aren’t responsible or can’t control their patient’s decision. All true, and in point of fact, such patient choice cannot be restricted, and the payer’s own benefit packages provides for this patient choice. However, the reality is that attribution models are actually in the aggregate fairly accurate in identifying the physician that can most influence and direct the patient’s care experience. 

Physicians will have to struggle with the issue of “responsibility” for costs and quality with the lack of the ability to control, or even address the recalcitrant patient that will not follow their advice and guidance. Again, in actual experience, physicians have more influence than they give themselves credit over patient decisions. It is the difference between the physician saying, “you need to see a cardiologist” and the physician saying, I would like you to see my colleague, Dr X a cardiologist for a x”.

With “lives attributed”, the patients identified for quality and economic responsibly identified, physicians and their collaborating health plan now have a collective challenge, what do we know about these patients, what do they need and how do we engage with them?

This is opening the black box, or Pandora’s box of data from the payers. It is claim data; it is the aggregate of paid and unpaid claims for the patients now attributed to the CIN. And it is a wealth of data, it is not yet information. It is the great challenge to the CIN to understand and manipulate this “big” data to make it usable, to turn it into information. 

Key in the collaborative relationship has to be very clear obligations of the payers to the CIN for the delivery of data, its timeliness and quality. It is from this data that the physicians in the CIN are going to know their challenges. What is the health status of the “attributed lives”, what percent have not received the expected routine and preventive services? This is the basis of the quality measures on which the CIN will be judged. 

In addition, the CIN will learn where the dollars have been going for these lives. Are these patients obtaining material levels of care from providers outside of the CIN? If so, is this an opportunity to “capture” volume? Are these patients receiving care from providers that are not contracted with the health plan? Such care is largely not coordinated with the physicians in the network, and much costlier, often hundreds of times costlier than services by contracted providers.

A word of advice – when entering into such collaborations with payers, put the risk of non-delivery of data according to the agreed schedule of timeliness and completeness on the payer. In other words, if the payer does not deliver, the physicians get specified credit towards meeting the goals and targets.

Data, turned into information, will be an eye opener. And information can readily scare the physicians in the CIN, as their history of claims activities become shared and known to others. Now the data will never be perfect, but it will be telling, and it will be incomplete. Claims data, which is what payers have and it suffers because it is not matched with clinical information, and it is dependent on the claims submitted by physicians, the quality of which is highly variable. This is why it is so critical for physicians to embrace EHRs and shared clinical data. For example, physicians are notorious lax about diagnoses being submitted on billings, after all the only motivation is to enter a code that will get the bill paid. Also, claims data from a payer represents only what the payer receives in claims. On review of medical records, often times there are preventive and routines services documented, but whether not billed, or perhaps paid by a different insurance carrier it is not in the claim data of the payer.

Include in your collaborations when it comes to assessing meeting the quality goals the provision of having medical record documentation of completion included in any assessment, not relying solely on claims data.

With data becoming information, you know what you’re dealing with where the challenges are and the opportunities.

On one level, there is the challenge of patient engagement. Building a strategy to reach out and motivate patients to come in to the physician office, and to obtain preventive services., to keep up with care if chronically ill. There is no one solution to this challenge. The approach much be multi-channel. From making sure that offices know to perform/order these services when a patient presents for other reasons, to phone and mail campaigns to patients. And make sure you know how to smooth their appointments for such things as mammography’s. Are you going to schedule them for the patient? Do you have ready convenient capacity to handle?

This cannot be accomplished by delegation to the physician. They simply do not have resources in their practice to call patients or take on mailings. Any physician efforts must be supported with resources in addition to their office staffs. But make sure the primary physician knows their patients are being contacted.  Avoid the embarrassment, for example, of outreaching to a patient that has not been seen for a mammography per the data, that is known to their physicians has having had a double mastectomy.

The big clinical challenge is to use the data to identify high risk/high cost patients and then aggressively act to provide care coordination and support of the physicians to seek to reduce the cost of care by improving interventions. Here you need not only the traditional nurse case managers, but it’s time to think out of the box. Can you team up with a sophisticated home care operation not just to engage post a hospital discharge, but to use their resources, and protocols that you design as a tool to avoid hospitalizations? In general, 5% of the population incur 50% or the medical expenses. You’re not going to deprive necessary care to anyone, but you can work in a coordination manner, in a creative manner, to deliver what the patient needs in different ways.

As you turn data into information, you will identify non-physician providers that deliver care with vastly differences in cost. For example, hospital outpatient services are costlier than independent clinical laboratories, ambulatory surgery centers less costly than hospital outpatient surgery. The appropriateness of place of service substitution is a topic that needs to be explored. Additionally, you will find at times unexpected differences in outcomes by providers, for example lower levels perhaps of readmissions for post-acute care when home care is provided than nursing homes? Or outpatient cardiac rehabilitation compared to inpatient rehabilitation? Patterns of treatment, long standing may be appropriate to change, if they add nothing towards improving outcomes, and only costs, because of “traditional” referral patterns.

Information now known will also identify those medical practices and physicians that will be most challenging. Tracking the care ordered by practices will identify things that you hope not to find. Those few physicians that are perhaps gaming the system, or threating their referral activity with what could be considered disregard for cots and appropriateness. For example, the participating physicians that funnels all this ambulatory surgery to a non-contracted ambulatory surgery center, or the devotion to a non-contracted laboratory. Or perhaps the physician that has the interest in the non-contracted physical therapy practice that seems to get his referrals. Such non-clinically justified “business” arraignments need to be addressed head on.

Another important value in of information is to identify the opportunities for improved revenue by improved diagnosis coding. As noted before physicians and their billers, which are increasing good at CPT coding, have relegated diagnoses coding to the back burner. What one code will get this claim paid? After all, physicians are paid on CPTs, who cares about the diagnoses code? Now you need to care, and there is the need for re-education across all the physicians and billers in the CIN. Diagnoses coding is critical for the economic success of these collaborations. 

The economics of shared savings, and soon shared risk are adjusted based on the severity of illness of the patients. The outcry against the old concept of capitation was that if you had a sick patient, your capitation was insufficient. The adjustment needed then, and needed now is the full and complete documentation of severity of illness of each patient, because as documented severity of illness increases, so too does the dollars that payers will pay towards these reimbursement arraignments, recognizing that sicker patients do cost more. A recent retrospective review of claims data with medical record information found that had the physicians for some 200 patients, out of over 100,000 properly documented with their billings the diagnoses that were present at the time services were presented, diagnoses that the physicians would properly consider when ordering further care, the added reimbursement to the CIN would have been in excess of $1 million. Funds that would readily flow to the physicians themselves.

The common conditions often present that can dramatically impact dollars yet are often not coded on the bill: diabetes, COPD, Depression, and obesity.

While these arraignments provide physicians with greater control over their daily world, and pass onto the physicians individually and collectively more responsibly for the success of their venture, the payer is cannot sit on the sidelines. They have a vested interest in the venture’s success. Remember if successful, then healthcare costs are constrained making their products more competitive in the market, garnering for them the opportunity for business and financial growth. The payer’s role dramatically and definitively changes with the CIN and its physicians’. They become a data source, and depending on the company, will play a more or less active role in the engagement with patients, as well as support with clinical, educational and financial resources towards the infrastructure and operation of the CIN. The degree that each payer participates is the negotiation of the shared savings/shared risk arrangements.

For both payer and physician and their Clinically Integrated Network the journey is just beginning. Early success is coming from “low hanging” fruit of opportunities, closing quality gaps, ending referrals to non-contracted physicians, improving diagnoses coding. The real challenge, and opportunity lies ahead, and it is going to be data driven. As physician EHRs link up with CINs, marrying clinical claim data, physicians as scientists will begin to challenge themselves to understand and intervene using the patterns of care that identify the better outcomes with the lowest cost. This is where the real opportunity is, how to and to implement care delivery that can be faster, better and cheaper. That challenge will dramatically change existing patterns of care, and patterns of referral activity. Physicians, working collectively through a CIN will have to work collaboratively with their payer collaborators to continue to refine the care needed by their attributed patients to accomplish success.