Results of CMSs Physician Group Practice Pay-for-Performance Demonstration Announced
July 13th, 2007
The Centers for Medicare and Medicaid Services (CMS) announced in a July 11 press release that two of ten large physician group practices (PGPs) participating in its three-year Medicare Physician Group Practice Demonstration were eligible to receive $7.3 million in pay-for-performance payments for redesigning care to improve clinical quality and create more efficient and effective delivery systems.
The demonstration program rewards providers for coordinating and managing the overall healthcare needs of Medicare patients with chronic conditions.
“This demonstration project provides new evidence that paying for quality of care instead of volume of services helps the [Medicare] program, physicians, and patients,” commented Department of Health and Human Services Secretary Michael Leavitt.
“Under the demonstration, which began April 1, 1995, PGPs continue to be paid on a fee-for service basis, but have the opportunity to share in savings generated from enhancements in care management,” the release explained.
“The [PGPs] are measured on performance using all health care spending for patients assigned to the group in relation to a comparison population of Medicare patients from their local market areas,” the release said. During the first year of the demonstration, which ended March 2006, a total of 224,893 Medicare patients were assigned to the ten participating PGPs.
Marshfield Clinic and University of Michigan Faculty Group Practice (U of M Group Practice) earned the $7.3 million in performance payments for quality and efficiency as their share of the $9.5 million in savings to the Medicare program during the first year of the project, according to the release.
The Marshfield Clinic will receive about $4.57 million in performance payments for savings of roughly $6 million to the Medicare program over the first year of the demonstration, according to a press release issued by the Clinic. CMS assigned the Clinic approximately 42,000 beneficiaries, representing the largest group of beneficiaries in the demonstration, according to the Clinic’s release.
According to the U of M Group Practice’s press release, it will receive about $2.7 million in performance payments for first-year savings of approximately $3.5 million to the Medicare program. The Practice was assigned 20,505 beneficiaries through the demonstration.
Both PGPs indicated they were pleased with their performance, but acknowledged that only data from beneficiaries with diabetes was used in the calculation of quality. “In coming years, heart failure, coronary artery disease, hypertension and preventative services quality measures will be added,” the U of M Group Practice’s press release said.
Marshfield Clinic’s president and chief executive officer Karl Ulrich also commented that the Clinic would put its performance payments “back into developing further quality outcome and data infrastructure in an effort to reduce costs in the long term.”
The remaining eight PGPs in the demonstration “had lower Medicare spending growth rates than their local markets but not sufficiently to share in savings,” CMS said. These PGPs are Billings Clinic (MT), Dartmouth-Hitchcock Clinic (NH), Everett Clinic (WA) Forsyth Medical Group (NC), Gelsinger Clinic (PA), Middlesex Health System (CT), Park Nicollet Health Services (MN), and St. John’s Health System (MO).
CMS also noted in its press release that all ten of the participating PGPs improved the clinical management of diabetes patients in the first year of the demonstration project, achieving benchmark or target performance on at least seven of the ten diabetes clinical quality measures. “Two physician groups—Forsyth Medical Group and St. John’s Health System—met all ten benchmarks,” the release said.
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