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Part Three – Payment Reform: About More Than Just Dollar Signs


The final NCQA PCMH joint principle encourages appropriate payment that “recognizes the added value provided to patients who have a patient-centered medical home.”  In addition to the PCMH, Accountable Care Organizations can provide physicians with a payment structure that is financially rewarding, as well as efficient and unburdensome.

The following points highlight what is needed to ensure that primary care providers are reimbursed for delivery care in an adequate manner:

Billable Time

Payment for calls and emailing saves time and money for both the patient and the doctor if a face-to-face consultation is not necessary. Dr. Casalino says, “As long as practices are paid primarily for services provided by physicians during in-person visits, it will not be possible to fundamentally change the way physicians spend their time.”


Maryland HB 435 (enacted May 20, 2010) – requires health insurers to pay a bonus to PCPs for services provided after office hours.

Virginia SB 675 (enacted April 7, 2010)– requires health insurers to cover telemedicine services.


 Standardization of Claims

A recent Health Affairs article finds that on a national scale, a single transparent set of payment rules for multiple payers, a single claim form, and standard rules of submission would translate into $7 billion of savings annually for physician and clinical services. Four hours of professional time per physician and five hours of staff time could be saved each week.


Colorado recently enacted several bills (HB 1004, HB 1330, and HB 1332) to begin standardizing claims.

West Virginia enacted similar legislation (SB 665) on March 11, 2010.



While providers must submit claims within a certain period to be reimbursed, insurers often deny claims or claim to never receive them, placing the burden on physicians to monitor and resubmit paperwork.


Connecticut enacted HB 5303 (enacted May 5, 2010) – requires all managed care organizations to report claims denial data, which is posted on the state’s Department of Insurance website.

Vermont HB 444 (enacted June 2, 2009) – requires payers, within 30 days of receiving a claim, to send payment or to provide notice of why the claim is contested or denied.


In a Maryland State Medical Society survey of members, 95 percent said health insurance protocols had a somewhat or very negative effect on the doctor’s ability to treat patients, with nearly 19 percent of participants spending 150 hours per month interacting with carriers. The organization’s report concluded “hidden costs [are] missed opportunities: every hour a skilled provider spends on administrative tasks associated with insurance protocols is an hour not spent on patient care.”


While the federal health reform bill and recent state legislation provide opportunities to test different payment models, testing the feasibility of varying billing requirements is also needed to improve the primary care workforce.


Additional resources on payment reform

Harold D. Miller’s Ways to Facilitate Better Healthcare Payment and Delivery Systems and Lower Healthcare Costs

The Commonwealth Fund’s Developing Innovative Payment Approaches: Finding the Path to High Performance

AMA payment resources


Part Two – Not Doing the Job Alone

If only primary care providers played on a team rather than running alone, they may be able to address the inefficiencies of the status quo.  The patient-centered medical home (PCMH) model may not be a silver bullet—but is growing in popularity and can offer the support needed by many physicians.  The NCQA joint principles, on which many states base their pilot program definitions, require a team of physicians to collectively take responsibility for the ongoing care of patients.

With a whole person orientation of coordinated care, the PCMH promotes efficient and effective long-term delivery of care.  Also encouraged under these guidelines is the adoption of Health Information Technology (HIT) in order to enhance access to care and improve quality and safety.  Proper utilization of HIT provides support tools to guide decision-making and prevent wasting time by no longer having to sift through paper files.


According to a 2009 Kaiser Commission on Medicaid and the Uninsured report, Community Care of North Carolina, the state’s Medicaid program and a pioneer in establishing patient-centered medical homes, had an estimated savings for FY2006 of over $150 million.  An evaluation found the state achieved $3.3 million in savings for people with asthma and $2.1 million in savings for people with diabetes between 2000 and 2002.

In Seattle, Washington is the nonprofit, consumer-governed, integrated health insurance and care delivery system, Group Health Cooperative, which was recently examined in Health Affairs.  Investments in the medical home model led to an improvement in patients’ experiences with care, quality of care, and providers’ work environment–all while saving money.

Addressing Limitations

Adopting new standards in order to transition to a medical home overnight is not a possibility for any practice.  Another Health Affairs article (“How Physician Practices Could Share Personnel and Resources to Support Medical Homes”) provides suggestions how physicians, particularly in small practices, can utilize resources to make the change as easy as possible, citing existing examples.

After only 26 months, a study of the Patient-Centered Medical Home National Demonstration Project shows it can take years to see improved patient-outcomes.  However, improvements in access and better prevention and chronic care scores were already experienced under the demo.  A supplement to the May/June issue of the Annals of Family Medicine, also focused on implementing medical homes, provides lessons learned.

Moving Forward…

CMS is accepting applications for the Multi-Payer Advanced Primary Care Practice Demonstration, bringing Medicare, Medicaid and private payers into up to six state-operated PCMH demos.

Recently enacted state efforts include:

With the pilots included in the federal health reform bill and established separately through state legislation, opportunities to create medical homes will only continue to increase and the time to become informed is now.

The final segment in this three-part posting will feature state approaches to addressing payment and billing issues.


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