new york advancing pcmh-2013

A N I S S U E B R I E F

Advancing Patient-Centered Medical Homes in New York

OFFICERS

J. Barclay Collins IIChairman

James R. Tallon, Jr.President

Patricia S. LevinsonFrederick W. Telling, PhDVice Chairmen

Sheila M. AbramsTreasurer

Sheila M. AbramsDavid A. GouldSally J. RogersSenior Vice Presidents

Michael BirnbaumDeborah E. HalperVice Presidents

Stephanie L. DavisCorporate Secretary

DIRECTORS

Richard A. BermanJo Ivey Boufford, MDRev. John E. CarringtonDerrick D. CephasPhilip ChapmanDale C. Christensen, Jr.J. Barclay Collins IIRichard CottonMichael R. Golding, MDJosh N. KuriloffPatricia S. LevinsonDavid Levy, MDHoward P. MilsteinSusana R. Morales, MDRobert C. OsbornePeter J. PowersMary H. SchachneJohn C. SimonsMichael A. Stocker, MD, MPHJames R. Tallon, Jr.Frederick W. Telling, PhDMary Beth C. Tully

HONORARY DIRECTORS

Howard SmithChairman Emeritus

Douglas T. YatesHonorary Chairman

Herbert C. BernardJohn K. CastleTimothy C. ForbesBarbara P. GimbelRosalie B. GreenbergAllan Weissglass

United Hospital Fund

The United Hospital Fund is a health services researchand philanthropic organization whose primary mission is toshape positive change in health care for the people of NewYork. We advance policies and support programs that promotehigh-quality, patient-centered health care services that areaccessible to all. We undertake research and policy analysisto improve the financing and delivery of care in hospitals,health centers, nursing homes, and other care settings. Weraise funds and give grants to examine emerging issues andstimulate innovative programs. And we work collaborativelywith civic, professional, and volunteer leaders to identifyand realize opportunities for change.

U N I T E D H O S P I T A L F U N D

Advancing Patient-Centered Medical Homes in New York

Gregory BurkeD I R E C T O R , I N N O VA T I O N S T R A T E G I E S

U N I T E D H O S P I T A L F U N D

Copyright 2013 by United Hospital FundISBN 1-933881-37-2

Free electronic copies of this report are available atthe United Hospital Fund’s website, www.uhfnyc.org.

iii

Contents

INTRODUCTION 1

I. CURRENT STATUS AND TRAJECTORY OF THE MEDICAL HOME MODEL IN NEW YORK 2

PCMH Certification 3

The State Health Innovation Plan 4

II. WHAT PROVIDERS NEED TO EXPAND ADOPTION OF THE MEDICAL HOME MODEL 5

1. Health Information Technology 6

2. An Evolving Care Model 7

3. Supporting Practice Transformation 7

4. Getting Paid for a Medical Home 8

5. Changing Payment Methods 8

6. Targeting vs. Transformation 9

III. THE PROVIDER PERSPECTIVE 10

Paying for the Medical Home: Some Principles 10

Where Multipayer Alignment Is Needed 10

IV. THE PAYER PERSPECTIVE 11

What Payers Need From Providers 11

The Challenge of Multipayer Alignment 12

V. WHAT CONSUMERS AND PURCHASERS WANT 13

SUMMARY 13

REFERENCES 14

Advancing Patient-Centered Medical Homes in New York 1

This paper was prepared as background for aroundtable discussion, “Moving the Patient-Centered Medical Home Forward in New YorkState: Defining and Resolving Challenges toPayer-Provider Alignment,” co-sponsored by thePrimary Care Development Corporation, theNew York Chapter of the American College ofPhysicians, and the United Hospital Fund onNovember 4, 2013.

While New York State has experienced rapidgrowth and diffusion of the medical home modelover the past few years, maintaining thattrajectory will depend on a number of factors.Central among them is changing the paymentsystem for primary care from the fee-for-servicesystem to one that supports the medical homemodel.

The goal of the roundtable, which includedleaders from the provider and payer sectors,purchasers, self-insured plans, and from theState of New York Departments of Health,Mental Health, Financial Services, and CivilService, was to identify and discuss:• key issues that challenge the ability to bring

the patient-centered medical home (PCMH)model to scale in New York, and

• ways in which those challenges might beaddressed.

This paper is organized into five parts:I. The current status and trajectory of the

medical home model in New York;

II. What providers need to do to implement themedical home, and some issues they face indoing so;

III.What providers need from payers to expandthe adoption of the medical home model inNew York State;

IV. What payers need from providers to supportthe medical home model; and

V. What purchasers and consumers need andwant from both providers and payerspromoting the medical home.

The analysis here is based on discussions withleaders who generously shared their time,perspectives, and insights into the key issuesthat need to be resolved in order to expand theadoption of the medical home model across thestate. The issues they raised serve as thefoundation for this report, particularly the rosterof issues presented in sections III, IV, and V.

An accompanying chartbook, Patient-CenteredMedical Homes in New York: Updated Status andTrends as of July 2013, provides data and insightson the adoption and spread of the PCMH modelin New York over the last three years. Like thisreport, it is available on the United HospitalFund’s website, www.uhfnyc.org.

This paper was supported in part by the AltmanFoundation, TD Charitable Foundation,EmblemHealth, New York Community Trust,and Excellus BlueCross BlueShield.

Introduction

It has been six years since the nation’s four majorprimary care societies first articulated the JointPrinciples of the Patient-Centered Medical Home(PCMH). An increasing number of studies havedemonstrated the model’s effectiveness, and—asis shown in Figure 1—primary care providersacross the nation have embraced the model as away to increase the quality and impact ofprimary care they provide.1-11

Many payers, finding the PCMH effective inimproving quality and member satisfaction andreducing preventable utilization and cost, arepaying differently, paying more for primary caredelivered in a medical home.

Based on a recent review of National Committeefor Quality Assurance (NCQA) data countingboth NCQA-recognized practices and providersworking in those practices, New York is home to

one-sixth of the total number of NCQA-recognized PCMHs in the country (Figure 2).

New York State has led the nation in theadoption of the medical home model. As of July2013, nearly 5,000 clinicians in New York wereworking in practices that had been recognized bythe National Committee for Quality Assurance(NCQA) as PCMHs.

While one-quarter of all primary carepractitioners in the state work in PCMH-recognized practices, three-quarters still do not,despite the growth of the model.

As is shown in Figure 3, the rate of adoption ofthe PCMH model in New York seems to beleveling off: after rapid expansion in the adoptionof the model between 2011 and 2012 (when thenumber of clinicians in PCMHs in the state

2 United Hospital Fund

0

2,000

4,000

6,000

Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Figure 1. Growth in NCQA-Recognized PCMH Sites, United States, 2008-13

Source: National Committee for Quality Assurance. 2013. Patient-Centered Medical Homes (Fact Sheet). Available at http://www.ncqa.org/Portals/0/Public%20Policy/2013%20PDFS/pcmh%202011%20fact%20sheet.pdf (accessed November 25, 2013).

I. Current Status and Trajectory of the Medical Home Model in New York


Figure 2. PCMHs (Practices and Providers) in New York, Other States, and the United States

Note: NCQA data include practices recognized as PCMHs and providers working in those practices.

Source: NCQA Recognition Directory. Available at http://recognition.ncqa.org/index.aspx (accessed October 7, 2013).

State2008

Standards2011

Standards Total in StatePctg. of U.S.

TotalCalifornia 218 2,227 2,445 7%Florida 515 589 1,104 3%Illinois 686 447 1,133 3%Massachusetts 711 819 1,530 4%Michigan 556 167 723 2%New Jersey 421 307 728 2%North Carolina 1,882 605 2,487 7%Pennsylvania 1,761 828 2,589 7%New York 4,859 1,417 6,276 17%Texas 1,221 447 1,668 4%Washington 594 364 958 3%Other States 7,630 7,811 15,441 42%U.S. Total 21,054 16,028 37,082 100%

0

1,000

2,000

3,000

4,000

5,000

2011 2012 2013

2011-12: 37% growth

2012-13: 5% growth

Figure 3. Growth of Providers in NCQA-Recognized PCMHs, New York, 2012-13


grew by 37 percent), the growth between 2012and 2013 was only 5 percent.

The PCMH model is not evenly distributedacross different types of practices. As is shown inFigure 4, NCQA recognition in New York tendsto be concentrated in practices with “scale”—group practices, health centers, andinstitutionally based providers. PCMH adoptionby smaller practices (<4 physicians), which lackthe scale to put in place the requiredinfrastructure, is far lower.

The New York State Department of Health’s“Hospital Medical Home” program is likely toincrease the number of hospital teaching clinicsachieving recognition under NCQA’s 2011standards over the next year; there is noequivalent program or initiative focused onproviders working in other practice types.

PCMH Certification As the PCMH model matures, standards arebecoming more demanding. The NCQA andothers are applying increasingly stringent criteriafor recognition as a medical home.

Of the nearly 5,000 New York State providersworking in PCMHs, 80 percent were recognizedunder NCQA’s “first-generation” 2008 standards.

Those practices—whose initial recognition wasfor three years—will soon need to reapply underthe NCQA’s 2011 standards.

Providers recognized under the 2008 standards(particularly those recognized as Level 1 or 2PCMHs) may have difficulty meeting—or beunwilling to meet—the new and more stringentstandards. This may result in some practices“dropping out” of that program.

As is shown in Figure 5, of the 3,900 providerscurrently recognized by NCQA under the 2008standards, 588 (15 percent of those recognizedunder NCQA’s 2008 PCMH standards) work inpractices recognized as Level 1 or 2. Thesepractices and providers are at particular risk,facing the biggest challenge in maintaining theirNCQA recognition.

The State Health InnovationPlan The evolving medical home is a centerpiece ofNew York’s State Health Innovation Plan (SHIP)and is likely to be included as part of anapplication to the Center for Medicare andMedicaid Innovation (CMMI) for $40-60million in funding under the State InnovationModels (SIM) initiative in early 2014.

Figure 4. PCMHs in New York State by Practice Type, 2012-13

0

400

800

1,200

1,600

Group Health Ctr HHC Hosp Clinic Hosp Px Practice

2012 2013


In its SHIP, the New York State Department ofHealth (NYSDOH) is proposing a three-tieredadvanced primary care (APC) model. The threecategories (tentatively, “Pre-APC”, “StandardAPC”, and “Premium APC”) reflect increasingcapabilities.

The SHIP uses NCQA PCMH recognition asone marker for the Standard APC tier, and addsa new category (“Premium APC”) for providersthat can demonstrate enhanced capacities,including: • better coordination with specialists in

“medical neighborhoods”;• closer relationships with hospitals for

smoother care transitions;• integration of behavioral health screening and

treatment in their practices; and • closer working relationships with community-

based prevention and wellness programs.

The state plans to use a portion of the fundsrequested from CMMI to support primary carepractices statewide in adopting the APC model,and to help those practices already so recognizedto continue building their capacity andimproving their performance.

New York’s plan focuses on ensuring that APCpractices would be paid differently by all payers,consistent with their increased costs and value.In fact, being able to demonstrate multipayersupport is a requirement of the SHIP, necessaryto ensure statewide adoption.

A number of factors, described in the followingpages, challenge the further expansion of themedical home model in New York and have thepotential to erode gains made to date.

Level 1: 10 (0%)

Level 2: 57 (1%)

Level 3:936 (19%)

Level 1: 405 (8%)

Level 2: 183 (4%)

Level 3:3,317 (68%)

Figure 5. Providers in PCMHs by NCQA Program and Level, New York State, July 2013


A medical home is quite different from atraditional primary care practice. In transitioningto a medical home model, practices need to:

• Expand operating hours, changing how theyschedule patients, developing new functionsand new skills, creating new roles for existingstaff and adding new staff, all of whom worktogether effectively as a team;

• Interact with patients differently, with morepre- and post-visit contact, using secureportals for communication and routinerequests;

• Change the nature of patient visits byplanning and preparing for visits in advance,with work lists for clinicians to help themfocus on closing gaps in care and onmanaging both current and impendingproblems;

• Actively manage quality of care, with newsystems to support the use of evidence-basedbest practices and new processes formeasuring and reporting process andoutcome measures; and

• Closely manage referrals and care transitions,particularly those of high-risk, chronically ill

patients, using dedicated care managerssupported by registries.

As is shown in Figure 6, providers mustundertake a series of sequential changes as theymove from a “traditional” primary care practiceto a PCMH/APC model.

Each of the steps marked with an asterisk (*)requires some type of up-front investment byproviders: capital, paying for technicalassistance, working capital, increased operatingcosts. These are investments in overhead costs,not generally recognized or covered under theprevailing fee-for-service payment system. Some issues related to implementing themedical home model in a traditional primarycare practice are discussed below.

1. Health Information TechnologyThe Issue: Over the past decade, New York’sHEAL program, New York City’s Primary CareInformation Project, and federal/state MeaningfulUse programs provided financing and technicalassistance to help practices acquire and useelectronic medical record (EMR) systems andparticipate in regional and statewide health

Baseline

Figure 6. Steps for Implementing the Medical Home

TA for collaborative care, other functions*

TA on additional requirements*

TA for practice transformation*

Capital and TA for EMR*

Premium APC

PCMH (2011 Standards) / APC

Additional Operating Costs

PCMH (2008 Standards)

EMR

Payments reflecting added costs and value of PCMH

* Step requiring up-front investment.

II. What Providers Need to Expand Adoption of the Medical Home Model


information exchanges. As the HEAL program isphased out, it is not clear how the remainingphysicians and practices will assemble the capitalto purchase those technologies, participate in theregional data exchanges, or pay for the technicalassistance required to reorganize their practices,and workflow.

Although not a formal requirement of theNCQA’s 2008 standards, health informationtechnology (HIT) is in fact essential to a primarycare provider’s success as a PCMH; it is nowrequired by the NCQA’s 2011 standards. Medical homes must have sophisticated EMRsthat can establish and maintain registries, stratifypopulations and identify high-risk patientsneeding care management, identify and highlight“gaps” in recommended care, accept and analyzenew data input, and generate different types ofreports.

Despite substantial state investments andincreasing adoption of EMRs in hospitals, healthcenters, physician groups, and primary carepractices in New York State, many practices(particularly small practices) do not currentlyhave EMRs with those capacities. For thosepractices, acquisition and use of an EMRrepresents a substantial up-front capitalinvestment.

New York State has created a network of regionalhealth information exchanges (HIEs) that havethe potential to greatly improve continuity,coordination, and quality of care; reduceduplication of services; and control costs acrossthe state.

Primary care practices connected to an HIE canexchange clinical information with specialists,hospitals, laboratories, and pharmacies; butconnecting to these HIEs requires that the

practice make additional (and unreimbursed)investments in interfaces and training.

2. An Evolving Care ModelThe Issue:Models for medical homes arechanging. Accrediting agencies, payers, and theNYSDOH are adopting and endorsing models thatdiffer from each other today, and are likely todiverge further over time. For primary careproviders to develop and sustain programs of carethat are recognizable as medical homes, there mustbe more agreement among the various parties on a“preferred” model or models, and more congruenceregarding criteria that providers must meet in orderto be treated and paid as medical homes.

Over the past five years, practices in New Yorkpursuing the medical home model had a fairlyconsistent set of standards to use: the NCQA’s2008 standards. That model of care has beenused by the State and others as the gold standardfor identifying practices that were likely to behigher-performing; and it has been used byMedicaid and other payers to identify practiceseligible for different types and levels of payment.

Increasingly, providers and payers have notedthat achieving recognition under the NCQA’s2008 standards constitutes a good foundation—necessary, but not sufficient—but is not alwaysindicative of true “practice transformation.”

The NCQA has issued a new and more rigorousset of standards.12 These include capacities thatproviders and payers have noted as important forthe effectiveness of a medical home in improvingquality and patient experience and reducingutilization and cost.

The medical home model continues to evolvewithin and beyond formal NCQA recognition.New York State’s recent articulation of the APC


model parallels action elsewhere, as states andpayers have put forth new, often tiered models(tied to different payment rates and methods) formedical homes. These models generally build onthe NCQA’s foundation, often adding newemphases and competencies.

3. Supporting Practice TransformationThe Issue: As part of their demonstration projects,some payers in New York have provided “start-up”funding (or in-kind support, like embedded caremanagers) to specific practices; others have“advanced” PCMH payments to practices whilethey were pursuing NCQA recognition. Those,however, are the exceptions.

In most cases, no funding or payment is availableto practices to cover their start-up costs. Whenpayers offer augmented “medical home” payments,they tend to be made to practices that have alreadyachieved NCQA recognition. As the medical homemodel and primary care practices’ capacities evolveover time, subsequent investments will be requiredto enable providers to incorporate further changesin the program model.

The process of “practice transformation”—moving from a traditional primary care practiceto a PCMH model—is a complex undertaking.Generally, practices need expert assistance fromconsultants to help them implement the PCMHmodel, assisting with workflow redesign, thedesign and use of registries, training of existingand new staff, new processes for caremanagement, and improved techniques forpatient engagement.

With the increasing expectations for the PCMHmodel come additional demands for practicetransformation. For example, the NCQA’s morestringent 2011 standards require enhanced carecoordination with hospitals and specialists andmore active care management.

Similar investments in technical assistance willbe required to put in place new models like thestate’s proposed “Premium APC” model, whichincludes new competencies: • Integrating behavioral health screening and

care management into the medical home,using the Collaborative Care model, requiresnew staff and skills, as well as workflowchanges focused on managing the care ofpatients with behavioral health problems.

• Increasing the involvement of practices incommunity-based prevention and communityhealth promotion may require investments intraining and support.

Beyond the required investments in consultantservices, practice transformation can disrupt apractice’s operations, reducing productivity andcash flow for as much as four to six months.

4. Getting Paid for a Medical HomeThe Issue: A given practice generally servespatients covered by a number of different payers. Itis a major challenge to primary care providers tosupport the medical home model—transformingcare and care processes for all patients—when onlya portion of the payers recognize and pay for theadded costs and value of the medical home.

The new work of a PCMH entails new costs,many of which are not recognized or paid forunder traditional fee-for-service paymentsystems.

The coverage and payment for PCMHs in NewYork State is quite variable. Many payers in NewYork are experimenting with new paymentmethods that recognize and pay differently forthe medical home model, but few have madesuch payments routine.

In multipayer demonstrations now under way inthe Adirondacks, the Capital Region, and


Hudson Valley, all participating primary carepractices receive specific payments from allparticipating payers (including Medicare) tocover the added costs of the medical homemodel. Elsewhere in the state, however, theextent of payment for medical homes varieswidely, with some payers paying differentproviders one way, while other purchasers andpayers pay differently or not at all.

5. Changing Payment MethodsThe Issue: There is growing consensus that themedical home is worth paying for, but lessagreement about how best to do so. Paymentapproaches vary. Many payers who are paying formedical homes use a per-member, per-month(PMPM) care management fee, often combinedwith a pay-for-performance arrangement. Giventhe continuing evolution in the model andpayment systems, consistency may not be easy toachieve.

In New York State, as elsewhere, methods ofpaying providers for care are moving away fromfee-for-service to PMPM care managementmodel that many payers now employ. Payers aretesting new methods, including pay-for-performance incentives to reward providers forimproved quality and patient satisfaction, risk-adjusted capitation payments, gain-sharing,risk-sharing arrangements, and, eventually,accountable care.

PMPM payments will probably always have aplace, as an initial payment method, to helpcover a practice’s new infrastructure and addedcosts. As practices produce measurable results,

however, there is increasing support for shiftingto models that pay providers based on theoutcomes they achieve.

6. Targeting vs. Transformation The Issue:Most of the medical home’s near-termreturn on investment (ROI) derives from providingbetter care to high-cost patients; but improvingcare for all patients served by a practice (includingthose not yet high-cost but at risk of becoming so),may have a greater long-term return. This leavesproviders and payers with a conundrum: shouldefforts be focused more narrowly on the high-costpopulation, which could yield demonstrable near-term ROI; or on a model that improves care for allpatients, reducing future spending, but dilutingnear-term ROI by spreading those savings over alarger population?

Most studies of the medical home have shownthat it improves quality and patient experience;many studies have shown its potential to reduceutilization and lower the total costs of care.13

Much of the model’s ROI, however, comes fromthe medical home’s ability to reduce preventableutilization of hospitals and emergencydepartments by a small cohort of high-costpatients who have multiple chronic illnesses.

Targeting interventions to improve the care ofhigh-cost patients can achieve substantial short-term results. However, by focusing on improvingaccess, quality, coordination of care, prevention,and wellness of entire populations the medicalhome has the potential to save as much or more.


Primary care providers implementing themedical home model are changing their caremodel, investing in new capacities and new staff,thereby increasing their operating costs. Theseinnovations are not supported well by the fee-for-service payment system; they require changesin the way providers are paid. As payers expandtheir support for medical homes, each naturallytends to do so in its own way. This variability cancreate problems for the medical home providers.

Some of the key issues facing providers—whatthey need from payers—are described below.

Paying for the Medical Home:Some Principles1. Agreement on a model, with the ability toevolve, over time: To date, NCQA recognitionhas been used by both providers and payers asthe standard for medical homes in New York.This gives providers a description of thecapacities and behaviors that they need to put inplace; and it gives payers a legitimate way toidentify specific providers eligible for augmentedpayments. NCQA’s standards are evolving, andproviders are identifying and including othervalue-added capacities that will enable medicalhomes to achieve increased impact.

Providers and payers need to agree on criteria formedical homes (some, like New York’s proposedAPC model, are using tiered payments thatreflect different capabilities), and on a way forthose models to evolve over time.

2. Full participation: Providers operatingmedical homes need most, if not all, of the payerswhose members they serve to participate, payingdifferently for the care their members receive atthose practices. Free riders, purchasers andpayers who do not participate in supporting this

new care model, threaten a medical home’sfinancial viability.

3. Fair payment: Providers need payers to paythem fairly for the care they provide. Paymentsshould be adjusted to reflect the range ofservices they provide, and the mix of patients forwhom a given provider or practice is caring.

4. Outcomes-based payments: While PMPMpayments are a comparatively simple andreasonable way to pay for a medical home duringits start-up phase, that method needs to evolveto paying for outcomes—performance comparedto benchmarks—and eventually to sharedsavings.

5. Consistent payment methods: It would beideal, from a provider’s perspective, if all payersused the same payment methods, but perfectconsistency is not likely to be achievable in thenear term. More commonality among thoseapproaches to paying for medical homes,however, could decrease the administrativecomplexity facing providers in implementing themedical home model.

Where Multipayer Alignment Is NeededMedical home providers generally serve patientsfrom different payers that often use differentapproaches in dealing with some key issues.Achieving multipayer alignment in these areas isa priority for medical home providers.

1. Attribution: Fundamental to the medicalhome concept is the ability to “assign” patients toproviders, in order to be able to hold providersaccountable for the care of those patients, and topay them for that care. Payers often use differentmethods to “attribute” their members to a

III. The Provider Perspective


primary care provider, using different statisticaltechniques. A common approach is needed.

2. Claims data: Medical home providers areaccepting responsibility for the health and costsof care for their covered populations. They needtimely, accurate claims data to enable them tounderstand their patients’ utilization patterns,identify patients with “gaps in care,” and identifyhigh-risk populations in need of caremanagement.

Common formats would be helpful, as would thecapacity to generate aggregated data across

payers to produce composite practice-levelprofiles.

3. Measures: Different payers often use differentmetrics to measure a medical home’sperformance on quality and patient experience,utilization and cost, and they reward a practice ifits performance equals or exceeds somespecified standard or benchmark. Using differentmeasures and benchmarks increases thecomplexity of medical home paymentarrangements. Agreement among payers andproviders on a specific and consistent set of“core” measures would greatly reduce thisproblem.

IV. The Payer PerspectivePayers are in a competitive business. They needto maintain—and, where possible, increase—their market share and bottom lines, oftenoperating in two different lines of business: • They design, sell, and manage health

insurance products, in which they bear theinsurance risk for enrolled populations.

• They provide “administrative services only”(ASO) to self-insured employers and unionhealth benefits funds, acting as a third-partyadministrator to help structure benefits, puttogether provider networks, negotiate rates,and pay providers for care.

To succeed in either business line, payers musthave evidence of demonstrable value—afunction of quality, patient experience, and costs,with the most important single variable beingpremium cost.

In theory, medical homes should add value to apayer’s provider network by improving qualityand reducing cost. However, it is not clear whatdata will prove the model’s value—for whichpatients, over what period of time, and for whichenhanced services. Furthermore, it may not be

easy to convince self-insured purchasers to paymore for primary care when they feel they arealready paying too much for health care.

What Payers Need FromProviders1. A model that works: Fundamentally, payerswant results. They are willing to pay more forcare in high-performing primary care practices,which can produce higher quality, increasepatient satisfaction, and reduce costs; they areless interested in paying more for practices thatmay have received NCQA recognition but havenot improved their performance or reduced theiroverall costs.

As noted, the NCQA’s standards are evolving,and providers are identifying other value-addedcapacities that will enable more advancedmodels of medical homes to achieve increasedimpact. Providers and payers need to agree oncriteria for medical homes (perhaps usingpayment tiers that reflect different capabilities),and on a way for those models to evolve overtime.


2. Amplitude: Payers want as many of theirmembers as possible to receive their care inprovider networks that efficiently producequality care. This means that they need sufficientavailability of a medical home model incommunities they serve, to care for a majority oftheir members. Insufficient penetration of themedical home model in a given providercommunity means that those members will bemore likely to receive their care in lower-performing practices.

3. Participation by payers and purchasers: If aprimary care practice serves a large number of agiven payer’s members, that payer hasconsiderable weight with the practice and caninfluence it. Conversely, if many of a payer’smembers receive their primary care in practiceswhere it represents a smaller proportion of thepractice’s panel, it will have less influence onthat practice. If only a few other payers in thatmarket are paying for the medical home model,or if most are still using fee-for-service schemes,the impact of any one payer’s medical homepayments and incentives on a practice will bediminished.

To achieve community-wide penetration of themedical home model, most if not all payers mustparticipate in paying for the medical homemodel, with as few free riders as possible.

4. A high-performing delivery system: As thedelivery system moves toward accountable care,payers are adopting new ways to pay for the careneeded by their members, in new modelsfocused on improving quality and acceptingperformance-based risk for managing populationhealth. Medical homes that perform wellrepresent the foundation of such a system.

The Challenge of MultipayerAlignment1. Differentiation: Payers need to be able todifferentiate their products and networks from

their competitors. They must also be able todemonstrate value— high quality, excellentpatient experience, and costs of care— at anaffordable premium. A multipayer effort, inwhich all payers offer (and pay for) medicalhomes, reduces the payers’ ability to use themedical home as a point of competitivedifferentiation.

2. Different approaches and measures: Mostpayers who are paying for medical homes haveinvested in development of—and are to varyingdegrees committed to—their own methods forpatient attribution, and measures of quality andpatient satisfaction. Achieving multipayerconsensus or alignment on a single method forpatient attribution, or on core measures ofquality or patient satisfaction is a significantchallenge.

In addition, many payers operate in a number ofdifferent markets, offering insurance and ASOservices in different regions of the state, often indifferent states, across the nation. In thesecases, the underlying approaches and systemsmay have been established at a corporate level,and are not easily aligned with commonprocesses or measures in different regions oreven for New York State as a whole.

3. Evolving payment methods: Most payersoffering medical home payments have adaptedtheir claims payment systems, developingdifferent methods to pay medical homes (e.g.,risk-adjusted primary care capitation, differentmixes of PMPM, pay-for-performance, and gain-sharing or risk-sharing models), and thosemethods are changing. Payers have invested inthese systems and in many cases are committedto preserving them. Changing to a commonsystem will not be without costs to the payers.

It is not clear whether achieving a unifiedapproach to paying for medical homes is anabsolute requirement for providers; but if so, itmay not be easy to achieve.


Most of the focus on the medical home model todate has come from providers and payers—essentially, the supply side. Ultimately, however,the success (or failure) of the medical homemodel will depend on its attractiveness toconsumers and purchasers.

In general, consumers and purchasers wantprimary care that is accessible, affordable,convenient, high-quality, and safe—and that isdelivered by a primary care provider with whomthey have a relationship, who knows and caresabout them. Increasingly, consumers also wantproviders to involve them in treatment decisionsand provide training and support that enablesthem to participate more effectively in their owncare. In theory, the evolving medical home modelwill be able to meet or exceed these consumer

expectations over time.

Purchasers and employers are being asked to paymore for primary care delivered using themedical home model because it promises to:• improve quality, patient experience, and

employee/member health; • decrease absenteeism; and • reduce their total costs of care.

Before they do so, purchasers need tounderstand the model, and have clear andcompelling evidence that it works, and canimprove quality and reduce health care costs.They also need their employees and members tounderstand and appreciate the model’s value,and to want it as a service model and healthinsurance benefit.

V. What Consumers and Purchasers Want

New York State has been a national leader insupporting the adoption of the medical homemodel in primary care; but its growth trajectoryis at an inflection point. Adoption by providerswith scale—group practices, independentpractice associations, hospitals, and healthcenters—has been impressive and accounts formost of the PCMH penetration to date.However, considerable effort will be required totransform those practices that have not yetbecome PCMHs.

Small and medium-size practices have shownthe least penetration of the medical homemodel, and they often lack the scale andinfrastructure necessary to do so. In the absenceof up-front investments to effect practicetransformation and more consistent payment formedical homes, it is not clear that these smallpractices—often an important source of care for

New Yorkers—will be able to become PCMHs.

The medical home model has great promise; butto bring that model of care to scale in New YorkState will require additional effort over thecoming years. Providers and payers must be ableto understand each others’ perspectives andneeds, and be prepared to work together toresolve the challenges they face. Innovation inhealth care delivery requires a parallel innovationin payment.

This paper is an effort to articulate some (clearlynot all) of the issues that must be addressed, andto note what providers and payers need fromeach other in order to accomplish what bothwant: a higher-performing primary care system asthe foundation for a better-performing healthcare delivery system.

Summary


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