Medical homes move forward, cost-shifting remains

September 27, 2009
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Insurance companies are forging ahead with plans to increase payments for primary care doctors to create patient-centered medical homes for their patients — which was chosen as the top health objective at the Regional Policy Conference hosted by the Grand Rapids Area Chamber of Commerce in 2008.

But the difficult economy and the battered state budget mean that progress has occurred without state support. Last week, a 3 percent tax on doctors was proposed as part of state budget negotiations over cuts to Medicaid.

“It’s been real tough going,” Chamber Senior Vice President Jared Rodriguez said. “If you’re going to ‘increase funding’ — those are the two key words in today’s current environment in Lansing. It’s not something they have the funds to do right now.”

An update on progress toward conference directives is set for the Oct. 5 Economic Club of Grand Rapids meeting.

Conference attendees that “increase funding for providers with effective prevention practices” should be the top policy directive on health. Essentially that means paying primary care doctors to introduce patient-centered medical home features into their practices.

Those measures may include adding office hours on evenings and weekends, creating patient registries to track the outcomes of preventive measures, and possibly even adding mid-level professionals, such as nurse practitioners and physician assistants, to create a team approach to treating patients.

“We see nothing but costs increasing,” Rodriguez said. “One of the ways we believe you can help slow the increase is to get individuals in to see primary care physicians, especially those that don’t have insurance or are currently in the Medicare/Medicaid system.”

Rodriguez said the 30-member Regional Policy Conference Task Force, which has been meeting over the past year, has given the thumbs up on a proposal supporting increased payments to medical homes for Medicaid recipients.

“We’re targeting the Medicaid population and we’re targeting primary care providers to meet the needs of that population and get them into the system. In order to do that, we need to create some sort of standard that, if met, the primary care provider would receive increased funding for Medicaid patients.”

Rogriguez said one idea floating around is diverting money that now goes to hospitals to offset the cost of uncompensated care — known as DSH money. That would require legislative action.

This year, $6.4 million via the American Recovery and Reinvestment Act boosted federal DSH money shared by eligible Michigan hospitals to $266 million.

“There might be some sort of incentive if we could use the DSH funding — now, no one’s signed off on this, this is one of the thoughts we might have — perhaps that might be an area we could explore, to use that funding to help increase Medicaid reimbursement. … Certainly, we have to work with our hospitals and see if that might be feasible.

“Ultimately, our goal is to address the shortage of primary care providers and gain better access to care, and the way we think we can do it is we have to provide some sort of financial incentive and benchmarking.”

Rodriguez said these changes would help to mitigate the practice of providers making up for low Medicaid reimbursements and uncompensated care by shifting those costs to commercial insurance premiums paid by employers.

“This is an idea we’re going to begin talking about in Lansing and meeting with lawmakers on and trying to take this a step further,” he added.

The idea, said Jeff Connolly, president of Blue Cross Blue Shield of Michigan’s West Michigan operations, is to help people develop relationships with primary care doctors instead of turning to expensive hospital emergency rooms for routine care. With an emphasis on preventive measures, medical homes should be able to keep people from developing hospital-worthy complications of chronic diseases.

In addition, raising income might entice more medical students into the primary care field, which is facing a shortage of doctors, he said. BCBSM earlier this year certified 1,200 Michigan doctors, including 300 in West Michigan, as medical homes eligible for a 10 percent boost in payments for office visits. Also, physician organizations that show they have implemented medical home standards received $30 million in incentives last year.

BSBSM is able to fund these programs through the money it saves by supporting the changing approach to primary care, Connolly said. 

“If we don’t do this, if our communities don’t respond to this, we’re at serious risk of a diminishing the supply of primary care doctors,” said Connolly, who served as a co-chair of the conference.

“If it continues to get worse, it’s going to be difficult to right this path on the cost trend.”

BCBSM and Priority Health both have put a focus on such programs. Priority Health spokeswoman Juanita Smith said Priority Health has increased reimbursements for medical home measures for its Medicaid customers and has seen an impact on the use of medical services as a result.

Connolly said that the changes being promoted by these incentive plans help all the patients of a participating practice, not just those covered by a certain company.

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