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With patient-centered medical home (PCMH) pilots in high gear around the country, early results indicate that the PCMH model can deliver quality care at no added cost. However, no single reimbursement strategy for the PCMH is garnering both payor and provider support at the contract negotiating table.

Top on the list of healthcare cost containment strategies that the Patient Protection and Affordability Act will test are accountable care organizations (ACOs) and bundled payments, which seek to improve how we pay for healthcare to reward quality and coordination of care. Guided by the new Center for Medicare and Medicaid Innovation, pilot programs that successfully control Medicare costs through these episode-based payment methods will be given CMS approval to expand, instead of waiting for Congressional approval as in the past.

Medical Home Reimbursement ABCs: Funding Care Delivery through ACOs, Bundled Payments and Concrete Contracts provides a primer on emerging reimbursement models that are getting payors' and providers' attention while delivering cost savings. This 50-page report profiles three healthcare organizations that are redefining healthcare reimbursement with their pilots of new payment models and contracting strategies:

• ACOs: When Dean Health System reengineered its practice as an ACO — a network of primary care physicians, one or more hospitals and subspecialists that provide patient-centered care — it noticed tremendous improvements in patient satisfaction and access, HEDIS and quality scores and membership numbers. The health system is now third in Wisconsin, the state ranked first for healthcare by the NCQA. Dean Health System President and CEO Dr. Craig Samitt, M.B.A., describes the recruiting, incentives and performance management strategies built into the ACO model, also known as a multispecialty group, a medical neighborhood, an integrated delivery network (IDN) or an integrated delivery system (IDS).

• Bundled Payments: Baptist Health System experienced a "Hallmark moment" when it distributed gainshare checks to providers participating in the CMS Acute Care Episode (ACE) pilot. Michael Zucker, chief development officer for Baptist Health System, describes the motivation, preparation, experience and lessons learned thus far from Baptist's participation in the CMS demo. He provides a frank look at the challenges of structuring payments, adjusting for severity, engaging physicians and vendors, coordinating and negotiating services and preparing for transition to real-life application.

• Contracts: As a member of the contracting team for the Dartmouth-Hitchcock Medical Center (DHMC) medical home program and a provider herself, senior medical director Barbara Walters, M.D., has earned her negotiating stripes. Experienced in negotiations with public and private payors, Dr. Walters has helped to shape financial foundations for DHMC's participation in CMS's Group Physician Practice demo for Medicare beneficiaries; a partnership with Cigna to create a medical home pilot whose reimbursement structure starts with quality, not cost; and the separate New Hampshire Citizens Health Initiative, a multi-site multi-stakeholder medical home pilot. Dr. Walters brings the industry up to speed on DHMC's negotiating activities over the last year, describing how to represent providers' interests through effective negotiations and contracts with payors for the medical home model of care.

This 50-page special report is designed for healthcare organizations wishing to decipher the alphabet soup of healthcare reimbursement models, as explained by these early pioneers of healthcare payment models.

Table of Contents

• Meet the Medical Home Neighbor: Accountable Care Organizations
  • Eight Realities of Healthcare Today
  • Defining the Accountable Care Organization
  • Eight Strategies for a Successful ACO
  • Fitting the ACO into the Medical Home Model
  • Results from Dean Health System ACO
• Medical Home Reimbursement: Exploring Bundled Payment Options
  • Components of the CMS ACE Demonstration Project
  • Gainsharing Metrics in a Bundled Payment Model
  • Hypothetical Example of a Gainshare Payment
  • Challenges of the Bundled Payment Pilot
  • Early Feedback and Lessons Learned
  • Physician Support for a New Payment Model
  • Keys to Success
• Medical Home Contracting: Building a Solid Framework
  • CMS Physician Group Practice (PGP) Demo Model for Medical Home Reimbursement
  • Redesigning Roles and Processes
  • Testing Payment and Clinical Care Reform
  • Designing and Negotiating the Pilot
  • Negotiating Reimbursement: Prospective and Retrospective Payments
  • Challenges of Patient Enrollment and Attribution
• Q&A: Ask the Experts
  Structuring Startup ACO Payments for Independent Entities
  • Payment Modeling for ACOs
  • Role of Specialists in the ACO
  • Impact of ACO on Quality Outcomes and Physician Payments
  • Defining Roles for ACO Players
  • Point-of-Care Technology in the ACO
  • Setting Capitation and Bonuses in the ACO
  • Health Reform’s Impact on Medical Homes and ACOs
  • Distribution of Bundled Payments
  • Profiting from Bundled Payments
  • Accounting for Case Mix Differences in a Medical Home Reimbursement Model
  • First Dollar Savings from CMS PGP Demo
  • Coding in Medical Home Reimbursement Contracts
  • Building Patient Buy-in for Medical Home
  • Performance Metrics and Bonuses in the Medical Home
  • Building a Medical Home Without an EMR
  • Providers’ Feedback on Reimbursement Levels
  • Physician Attribution Methodology
  • Impact on PCP Salaries
• Glossary
• For More Information
• About the Presenters