January 7, 2016
26 Initiatives in 2009 to More Than 160 Initiatives Today
WASHINGTON, DC— The National Committee for Quality Assurance (NCQA) analyzed the rapidly growing number of financial incentive programs that help primary care clinicians and practices become patient-centered medical homes (PCMH). Analysis included commercial/ private, public and multi-payer initiatives offering financial incentives for practices to become PCMHs across all 50 states, Puerto Rico and the District of Columbia.
The landscape of PCMH is rapidly evolving but the good news is that the number of programs financially supporting PCMH is up substantially—from just 26 in 2009 to more than 160 today. But most of the programs’ incentive payments still fall short of what, according to research, practices need in order to sustain PCMH transformation.
PCMH initiatives are using an array of incentive structures. Some use just one type of incentive, while many others use a combination of incentives to accommodate different providers’ readiness to adopt PCMH and payment reform. Others offer nonfinancial incentives, such as a care coordinator or participation in a learning collaborative. A key takeaway, however, is that ongoing infrastructure support—in the form of regular payments and other practice transformation resources—is critical to successful PCMH implementation.
“It’s gratifying to see more insurance plans recognizing the value of PCMHs,” says Margaret E. O’Kane, President of NCQA, “However, it is critical that ongoing support for PCMH’s continue in order to sustain transformation and attain full return on the investment of $6 in savings for every $1 spent, starting in year three.”
Analysis found a broad range of incentive payments, but the average is far less than the $6–$8 per patient research suggests is necessary to sustain transformation and reflect the true value and cost savings delivered by the PCMH model.
“Payers should provide long-term, stable compensation for value achieved, and incentives should be aligned between patients, payers and delivery systems,” says Michael K. Magill, MD, Professor and Chairman, Family and Preventive Medicine, University of Utah School of Medicine. “In my opinion, this will require migration from fee-for-service to comprehensive payment for advanced primary care services.”
Below is a snapshot of an evolving PCMH landscape, subject to limitations of time and available information. NCQA views the analysis as a “moving target,” wherein the information reflected will continue to change as interest in PCMH grows. Key findings include: • The number of PCMH initiatives across the country is growing rapidly. As of 2009, Edwards (et al) found just 26 PCMH initiatives in only 18 states. Today, there are over 160 active PCMH initiatives across 48 states, Puerto Rico and DC.
- Per-member, per-month payments are the most common incentive. Payments often increase, based on recognition level, to cover the cost of PCMH activities not traditionally reimbursed, such as care coordination or enhanced patient access.
- Only 1/3 of the initiatives we found provide adequate financial support. PCMH initiatives are offering a wide range of monthly incentive payments. However, the majority of incentives do not meet the $6-8 PMPM that research suggests is necessary to sustain transformation and reflect the true value and cost savings delivered by the model.
- The majority of incentives are tied to a national PCMH recognition program. Across both regional payers and larger national health plans, PCMH recognition is recognized or required for participation in many initiatives. At least 24 initiatives explicitly require NCQA recognition; another 88 recognize NCQA recognition as meeting programmatic goals.
- Many PCMH initiatives use multiple incentive structures. To accommodate the diverse needs and readiness of practices to adopt PCMH, payers often use multiple incentive structures to drive transformation.
- Payment reform is an integral component of successful PCMH implementation. Ongoing financial incentives are necessary to drive and sustain practice transformation. Incentives are critical for producing the demonstrated improvements in cost and quality that PCMH implementation can achieve.