Arkansas Payment Initiative Update

Episode of Care Model – October 1 marked the start of the twelve month reporting period for Medicaid’s initial three episodes (Acute Upper Respiratory Infections, ADHD, and Pregnancy). The next two episodes will begin in January (knee/hip replacement and CHF). Meanwhile, ABCBS has sent contract amendments to physicians to implement their first round of episodes beginning January 1. Over the past couple of months, meetings have been held across the state to explain and demonstrate how the episode of care model works and how it impacts physicians and other health providers.


AMS advises physicians to carefully review their episode reports and let the AMS staff know if there appear to be any inaccuracies or problems with the reports. Only those physicians who treat the conditions above should be receiving reports, with one exception. For CHF, the principal accountable provider (PAP) is the hospital. AMS advocacy efforts are currently focused on identifying problems and working with the payers to get those problems corrected. Several problems have already been identified and are being addressed. Those include:


Small numbers – The minimum number of episodes to be included as a PAP is set at five per year. Just one case can create an “averaging” problem, generating wide swings in a PAP’s average cost per episode as well as any quality measure requirements necessary for gain sharing.


ADHD Certification – PAP’s are required to go online and certify their patients that qualify for a Level 1 or a Level 2 ADHD episode. There was some confusion over who had to complete this certification within the PAP’s office. The physician does not have to be the one completing the short certification form.


Pregnancy Episode – AMS received several calls from physicians unsure when births would count towards the performance period. If all births occurring on or after October 1 were to be counted, that would mean the performance period would include care provided for the previous 40 weeks, long before the episode of care model was finalized. This problem is being resolved and our understanding is that births occurring before January 1, 2013, will NOT be counted in the performance period.


Contracting Problems – ABCBS mailed out a contract amendment to PAPs that only included the cost threshold levels. The details of the episode model, stop loss information, cost sharing and gain sharing levels, and other necessary information was not included. AMS met with ABCBS and our understanding is that the contract amendment is being revised to include the missing details.


Hospital Costs – This is a problem unique to private payers. If the episode includes hospital costs and the physician is the PAP (i.e. pregnancy and knee/hip replacement),  the PAP’s costs per episode is influenced by the payers reimbursement contract with the hospital. Example – Physician A practices at a hospital with a relatively “high” reimbursement rate; Physician B practices at a hospital with a relatively “low” reimbursement rate.   If both physicians’ provide the exact same services, order the exact same tests, procedures, etc. and have the same length of stay, physician A will have a higher cost per episode than physician B because of the variation in hospital contract pricing with the payer. Medicaid avoided this problem by “normalizing” costs that are not within the PAP’s control. In fact, the episode of care model is predicated on the concept of holding PAPs accountable for those things that are within their control. AMS has stated its position that the private payers must not hold physicians accountable for hospital pricing contracts that the physician is not a party to. ABCBS has indicated its desire to work with us to address the issue.


Medical Home Pilots – Sixty-six primary care clinics from across Arkansas have been selected to participate in the multi-payer (Medicare, Medicaid, ABCBS and QualChoice) Coordinated Primary Care Initiative (CPCI). In addition, a physician advisory group has been formed to advise the State on how best to expand the patient centered medical home model to all primary care practices over the next 3-4 years. The CPCI pilot will pay selected clinics a per member per month fee (in addition to their fee for service reimbursements) in order to transform the clinic into a medical home model.


CMS Innovations Grant Request – The State has submitted an application for a federal innovation grant valued at $60 million to support the initiatives mentioned above. If awarded, a portion of the funds would be used to identify and establish support programs to assist physicians and other health care providers as they transform their practices, i.e., to a patient centered medical home. AMS and other physician organizations supported the grant request on that basis. Contrary to newspaper reports, the grant is not a “Medicare” grant and the grant is not dependent on Medicare being part of the payment reform program. However, Medicare is already the primary source of funding for the CPCI project paying an average of $20 per patient per month for every Medicare patient enrolled in the program.


AMS NEEDS TO HEAR FROM PHYSICIANS ….primary care physicians, psychiatrists, obstetricians, and orthopedic surgeons are the specialties impacted by the first wave of episodes under the episode of care model. Their experiences (good and bad) will impact how the next wave of episodes is developed (coming soon). In order to maximize advocacy on this issue, the AMS staff needs to know what problems are being encountered. Send an email to report any concerns or problems or just to provide feedback.