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A New Way of Treating Patients at "Home"

Beth Fitzgerald | November 3, 2011

Patient-centered medical homes team doctors and nurses to ensure patients get preventative care.

One of the directives of President Obama's healthcare reform is to find new ways to deliver medical services to Americans. A New Jersey pilot of a patient-centered medical home, or PCMH, is doing just that. A PCMH is a new approach to healthcare management, one in which doctors and nurses work together to make sure patients get preventive care in an effort to head off crises that lead to hospitalizations.

Judging by early results, the 10-month-old pilot is meeting with some success with both insurance providers and caregivers. Horizon Blue Cross Blue Shield of New Jersey reports lower hospital admissions and the potential for lower medical costs down the road, while doctors are getting extra revenue and the latitude to spend more time with patients who need the most attention. Horizon Healthcare Innovations (HHI), a year-old division of Horizon Blue Cross, is overseeing the pilot, which is being expanded to cover Medicaid patients -- starting with the Newark family medicine practice of Dr. Thomas Ortiz, Forest Hill Family Health Associates.

Horizon NJ Health, the Horizon subsidiary that administers the Medicaid program for 533,000 New Jerseyans, is working with HHI to bring the patient-centered medical home to Forest Hill's 1,800 Medicaid patients.

The PCMH pilot launched in January with 63 physicians in eight primary care practices, including the five-physician Forest Hill. It serves 24,000 patients. By extending coverage to Medicaid patients, Horizon officials said they will be reaching the more difficult medical cases typical of the program. They also said they will shoulder the additional costs of delivering higher-intensity primary care to Medicaid recipients.

"The Medicaid population often faces complex and chronic health conditions that can result in higher emergency room use and hospital admissions," said Dr. Philip Bonaparte, chief medical officer of Horizon NJ Health. He cited statistics from the federal Agency for Healthcare Research and Quality, which show that hospital admissions of Medicaid patients rose 30 percent between 1997 and 2008, compared with a 5 percent increase for patients with private health insurance.

A PCMH is generally more expensive to operate than a traditional medical practice, said Dr. Richard Popiel, president of HHI. He explained that there are three revenue streams Horizon provides to practices enrolled in the pilot.

"One is the payment of a coordination fee, an upfront payment, on a per-member, per-month basis, to enable the physicians to sit back and manage from a population perspective," Popiel said.

A second source of revenue, according to Popiel: Horizon either supplies or pays for "population care coordinators" or "embedded nurses." These are "practice-based nurses who focus on higher-risk patients. They are armed with data about which patients are in the hospitals and look to find gaps in care. They work hard to close those gaps and develop care plans for the high-risk patients," which can involve making sure women get mammograms and diabetics get glucose screenings.

Popiel indicated that the third revenue stream is an "outcome-based payment" or a bonus to the practice for meeting quality goals. "If you put all these components together and make the assumption that the performance [of the practice] is high, you are talking about north of a 25 percent increase in total practice revenue" paid by Horizon.

The financial incentive from Horizon is critical, Ortiz said. "In New Jersey we are losing ground with regard to the number of doctors who stay in the state." He said family doctors earn considerably less than specialists, and Medicaid reimbursement rates are low. "This project gives us some hope that we can get the fees to a reasonable level and do good case management and provide less expensive care and more prevention."

Bonaparte said that in the Medicaid version of the PCMH, Horizon will also fund care coordination, provide patient-care coordinators, and pay bonuses for meeting targets. And he said "Medicaid is not paying us a dime more to do this; we have taken this upon ourselves." He said it is part of the core mission of Horizon to help put Medicaid on a sustainable footing by improving quality, lowering costs, and thus ensuring access to care. "It is the right thing to do; we believe in the Medicaid program. The only way the business will be sustained is if we put our focus on the foundation, and the foundation is the primary physician."

Ortiz said his practice was able to join the PCMH because he was an early adopter of electronic health records, starting 11 years ago. Digital data is essential for the PCMH to compile registries of patients with chronic conditions like diabetes and then keep tabs on them to get regular screenings and bring their disease under control.

Ortiz said he recently borrowed money to upgrade his technology. "I did it because I'm committed to it, and it is a significant cash outlay." By investing in IT, Ortiz said he expects his practice to ultimately be more successful.

Dr. Richard Corson is a past president of the New Jersey Academy of Family Physicians, which worked with Horizon over the past year to get the 63 New Jersey physicians certified as PCMH's by a national accrediting organization.

According to Corson, "there is a lot of excitement" about PCMH in New Jersey, noting that Horizon is clearly in the vanguard. Corson said "the key to the PCMH really succeeding is that it has to be across the board for all payers [insurance plans]." He said other health plans are talking about moving into the PCMH space.

Corson said he expects his two-physician, 3,500-patient practice in Hillsborough to be certified as a PCMH early next year. He said many of the changes that result from the switch to a PCMH "involve putting systems into place that enhance patient safety. When we have a test ordered we make sure it gets done, that we have the results, that the patients are contacted about the results, and that we track labs and X-rays and referrals" to specialists.

"It changes medicine from episodic care to more of a continuum of care," explained Corson. "Even if you don't show up in the office, we pay attention to you."

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