Healthcare Provider, Insurer Seek to Lower Costs, Improve Quality

Andrew Kitchenman | December 13, 2012 | Health Care
Cigna, Summit Medical become the latest accountable care organization partners in NJ

An agreement between insurance firm Cigna and Summit Medical Group reflects a growing trend of the state’s insurers and larger provider organizations pursuing accountable care organization-based collaborations.

The ACO model, a core component of healthcare reform, is a network of doctors, hospitals, and other healthcare providers that all work together to coordinate quality care for the patients they serve.

Under the agreement, which was announced Thursday and took effect Dec. 1, Cigna will pay Berkeley Heights-based Summit Medical Group for clinical care coordinators — registered nurses who will serve patients with chronic ailments and other challenging conditions. The care coordinators will work to reduce hospital readmissions by providing follow-up care and screening to patients. They will collaborate on this with a team of Cigna case managers.

The ACO agreement with Summit Medical Group is Bloomfield, Conn., -based Cigna’s 42nd in the country and second in New Jersey, following a September 2011 agreement with New Brunswick-based Partners in Care.

In the accountable care organization model, insurers attempt to compensate medical providers for how well they perform and keep costs down, rather than for each service they provide. ACO agreements are on the rise with other New Jersey insurers, including Horizon Blue Cross Blue Shield of New Jersey, which reached its most recent agreement with AtlantiCare in October. An ACO-based approach also was authorized for Medicare patients under the federal Affordable Care Act.

Summit Medical Group Chairman and CEO Dr. Jeffrey Le Benger said the agreement is possible due to changes that his practice has been making in recent years.

“We’ve been changing our infrastructure to be able to control the cost of care,” including the how the firm approaches billing and record keeping, Le Benger said. By unifying all of a patient’s health information into a single record, Summit Medical Group has been able to avoid duplicating services, Le Benger said.

As in other ACO agreements, Summit Medical Group doctors will be rewarded with additional pay if they meet targets for improving quality and lowering medical costs. With more than 300 providers, Summit is the state’s largest physician-owned multispecialty practice.

Le Benger said his group has been taking other steps to reduce medical costs and improve patient health, including operating an urgent care center, which serves patients who need immediate treatment for conditions ranging from allergic reactions to pneumonia, but who are less likely to require hospitalization. Of the patients at the center, 3 percent are admitted for hospital stays, as opposed to the more than 20 percent of emergency room patients who are admitted.

In the future, Le Benger hopes that insurers will offer patients lower premiums and copayments if they choose to receive services from providers that have demonstrated high-quality care.

The agreement is the first for Summit Medical Group, but Le Benger said the medical practice is “moving in that direction with other major insurers.”

The payments for care coordinators and incentives to doctors will raise Cigna’s overhead costs, but company officials are confident that those additional costs will be more than offset by savings from improved care.

Dr. Dan Nicoll, Cigna’s New Jersey market medical executive, contrasted the agreement with traditional fee-for-service payments in which “if you got one, you paid for one; if you got two, you paid for two” procedures, rather making payments based on what care provides the best value.

“With mutual respect, we can work on reducing the burden of illness and complications for a population” before they become costly and debilitating, Nicoll said. As examples, a care coordinator can work with a patient with asthma to help them avoid allergens and with a diabetic patient to make changes before they face kidney failure or lose their eyesight, he said.

“It’s going to serve our clients by improving the health of our populations and reducing their costs,” he said.

Charlie Catalano, president and general manager for Cigna in New Jersey, emphasized in a statement that heading off health problems at an early stage is a principal goal of the collaboration.

“Helping people reduce their health risks, preventing health problems before they happen, stopping disease before it progresses and helping to ensure the right care, at the right time, in the right place are all at the heart of our collaboration with Summit Medical Group,” Catalano said.

Nicoll touted the collaborative accountable-care approach as the next step in managing care, an improvement over having insurers deciding whether medical services were necessary, sometimes after they have been delivered.

He said Summit Medical Group was a good partner for the agreement because their longstanding relationship “made this easy for us. They have an enlightened leadership who understand where things are going,” with increased collaboration and a focus on value.

Cigna is looking for more ACO partners, but said they must have three attributes: forward-thinking leadership, a credible track record, and a significant customer base. Having enough providers and a healthy enough financial footing is not possible without large numbers of customers, Nicoll said. Therefore, a small practice with a perfect record of providing good care but without a large number of patients “is not going to work” for an ACO agreement, he said.