AMS and several physician groups, including representatives of the Arkansas Orthopedic Society, have been meeting regularly with ABCBS officials to work through concerns over their implementation of the Arkansas Payment Improvement Initiative (APII). As a direct result of these discussions, ABCBS has made changes and adjustments, some of which are also being made by Medicaid.

These changes include clarifying “in writing” the details of the episode of care provisions, including the percentages of shared savings/risk, stop loss provisions, outlier exclusions, and appeal processes. Changes that apply to ABCBS, as well as Medicaid, include removal of “all-cause” admission/readmission rates from the determination for gain sharing as well as removal of certain unrelated readmissions (a list developed by CMS) from the principal accountable provider’s (PAP) episode costs.

Discussions with ABCBS are continuing on another issue that is of significant consequence to physicians who are PAPs for episodes that involve hospital services (knee/hip replacement and perinatal). Currently, the carrier is not making adjustments to the PAPs average episode costs to account for variations in hospital contracts. The result is the PAP’s average cost per episode is affected by their hospital’s respective reimbursement contract, which of course the PAP has no control or influence over. For hospitals with higher than average contracts, the PAP “could” end up with an average cost above the acceptable level for no reason other than the hospital’s higher reimbursement contract. This goes 180 degrees from the episode of care concept of holding the PAP accountable for costs they have influence over. Medicaid addressed this issue by normalizing the variations in hospital rates when the physician is the PAP.   Negotiations are ongoing and AMS expects to reach an agreeable solution soon.