Medical Payment Model Comfortably Pads the Bottom Line

One accountable care organization saved $8.5 million and received a check from Medicare for $4.2 million after 17 months. Suddenly, they had physicians clamoring to join.

Could you use an additional $150,000 added onto your medical practice’s bottom line? So few people would turn down the opportunity that Richard Lucibella, chief executive officer and director of Accountable Care Options, LLC, an accountable care organization and Medicare managed care operation in south Florida, has had to turn away 50% of primary care physician applicants.

Why?

“They’re not ready for the depth of documentation, and the depth of patient coordination that has to take place,” he explains.

In other words, they aren’t prepared to do what they were trained to do in the first place, but what payment mechanisms haven’t allowed them to do in 40 years.

The key, Lucibella says, is making a practice-wide commitment.

Learning new tricks

Medicare has “learned a lot” in 30 years as an institution, according to Lucibella. That includes recognizing the need to incentivize providers in order to reduce costs, and a commitment to practice medicine the way it used to be practiced.

“When the patient came in the door, [the physician] wasn’t so much concerned about what the chief complaint was,” he explains. “That could be dealt with in about 6 minutes. But the old-time docs were in the position of getting a full update on the patient’s chronic conditions, and then treating them.”

It wasn’t an easy sell to physicians at first.

The entrepreneurial spirit is strong in south Florida, Lucibella explains, referring to the bastion of one- and 2-physician practices. No one can walk into their office and tell them how to practice or force them to use en EMR and document at a high level. They demand their independence.

However, the seasoned Medicare Advantage providers would informally talk to other physicians, and gradually they realized it was worthwhile to take 2 steps back in order to move ahead 3.

The money didn’t hurt, either. After 17 months, Accountable Care Options received a notice from Medicare that it had a 100% score, had saved $8.5 million, and that Medicare was sending a check for $4.2 million.

“We took 70% of that $4.2 million and sent it directly to primary care offices, which turned out to be, on average, $500 per patient in shared savings bonus,” Lucibella recalls. “They don’t bill $500 per patient in a year. That turned out to be an average of $150,000 per practice to their bottom line. Did I have their attention? Yeah, I had their attention.”

Properly aligned

Lucibella says that the key to Medicare’s payment model experiment is that physicians must address patients with chronic conditions, and document in such a manner that they can demonstrate, for instance, bringing LDL levels in line, and that they provided patient education.

“My background is public health, and this is the first time in my entire career that I have seen quality measures come up to a technical level where they are directly aligned with cost efficiency measures,” he says.

Previously used quality measures tended to be technical in nature, Lucibella says. How quickly did the physician get the MRI done? Did he or she do the CAT scan?

Today, the focus is on outcomes. The needle has moved from process measures to outcomes measures. Did the patient have a mammogram? Did the physician address it in the chart? Because if he or she didn’t address it in the chart, then as far as Medicare is concerned, the patient didn’t have a mammogram.

“And that’s as it should be,” Lucibella says. “The hoops that we have to jump through now are very much outcome oriented. And when physicians start focusing on those, they are simultaneously focusing on the cost factors. I think for the first time we no longer have that dynamic tension between quality and cost. It’s a fascinating place to be today in primary care.”

Team effort

Lucibella says a key strategy is properly training medical practice staff. And, he points out, there’s strong receptivity.

“Medical assistants didn’t go to school and take a job to do height, weight, and blood pressure,” he says. “They want to do patient education. It makes for a more interesting day, and they feel more involved.”

In addition, Lucibella says it’s important not to focus too much on technology, especially during the first 2 to 3 years of working in an accountable care organization environment.

“You can’t go into a primary care physician’s office and drop a 30-page report on his desk and say you need to read this in order to get potential shared savings 18 months from now,” he says. “His eyes are going to glaze over. You just need to demonstrate that there really is a payday here. And you can ask them to go the extra mile, but don’t ask them to go the extra 5 miles during that first or second year.”