New Jersey was one of only seven states selected Wednesday to participate in an innovative federal pilot that aims to transform primary care practices into patient-centered medical homes that cut costs and enhance care by eliminating duplicative and unnecessary treatments.
The pilot is overseen by the Centers for Medicare and Medicaid Services. It sets up a system in which participating practices receive payments each month from commercial health insurers, Medicare, and Medicaid. The money will give doctors more freedom to coordinate and consolidate patient care. It also can help free up or hire staff to make sure patients are keeping appointments, taking medications as prescribed, and meeting with specialists as needed. Any savings realized by the CMS and the commercial insurers will be shared with the patient-centered medical home (PCMH).
New Jersey prevailed in a very competitive arena: the CMS received nearly 40 applications from around the country. Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth NJ are the commercial payers that applied for and were selected to take part in the Comprehensive Primary Care Initiative. Horizon subsidiary Horizon Healthcare Innovations has been running a PCMH pilot for the past 18 months in the state and this week released some preliminary findings.
"This is potentially a game changer," said Dr. Robert Eidus, president of the New Jersey Academy of Family Physicians, commenting on New Jersey being picked to participate.
"New Jersey is a distressed-practice environment, an area where primary care is an endangered species," he added. "We face the imminent prospect of having primary care deserts in the state. Having the opportunity to have a model that rewards what we do best, which is taking care of populations, conserving healthcare resources, having enduring relationships with our patients, and then rewarding us for that -- this is what needs to happen in New Jersey."
HHI president Dr. Richard Popiel noted that "in contrast to some other geographies, [New Jersey] has a very fragmented delivery system." He explained, "Its primary care workforce has been stressed and they tend to be in small practices that do not set up well for an integrated comprehensive approach to care. So this … enables physicians to take a more comprehensive view."
New Jersey's other two major commercial insurers, UnitedHealthcare of New Jersey and Cigna, did not apply to participate in the pilot. UnitedHealthcare spokeswoman Mary Mcelrath-Jones said the company is considering next steps in light of the CMS approval; the company is part of the Colorado and Ohio pilots. Cigna's proposal for Colorado overlaps a portion of the market selected by the CMS, according to spokesman Amy Turkington.
The next step for the CMS is to solicit applications from New Jersey primary care practices that want to participate. It will select 75 finalists.
Dr. Lisa Blondin, senior medical director of AmeriHealth NJ, said the 75 practices "are not going to be chosen on the basis of size. They are going to be chosen in the basis of the willingness to transform care and to provide optimal care for their patients."
The Comprehensive Primary Care Initiative is set up so that the CMS will make bonus payments to the practices averaging $20 per patient, per month. Horizon and AmeriHealth will also make uniform payments to each practice, but the amount, which has been approved by the CMS, must remain confidential because antitrust issues preclude commercial insurers from sharing reimbursement data. Medicaid, a state and federal program that provides care to low-income residents, is also part of the pilot. Valerie Harr, the New Jersey Medicaid director, will be working with CMS to implement the program.
Practices don't have to be recognized as PCMHs by the national standards setting group, the National Committee for Quality Assurance (NCQA), but the steps that CMS will require the practices to take -- such as coordinating care and providing preventive care and screenings -- will position the practices to become formal PCMHs if they chose to do so.
But what of the skeptics who question whether healthcare reform can bend the cost curve?
HHI has an answer. It reports an across-the-board 10 percent savings in healthcare spending in 2011, the first year of its statewide PCMH pilot, in which eight primary care practices with 24,000 patients demonstrated the potential of the PCMH to both improve the quality of patient care and lower the cost.
Horizon said the 24,000 patients in the pilot were compared with a similar population of 1 million Horizon members. The pilot population achieved the following: 8 percent higher rate of improved diabetes control; 6 percent higher rate for breast cancer screening, and a 6 percent higher rate of cervical cancer screening. On the cost side of the equation, the pilot population had 26 percent fewer emergency room visits, 25 percent lower rate of hospital readmissions, 21 percent lower rate of hospital inpatient admissions, and 5 percent higher rate of generic drug use.
Popiel said the findings were encouraging enough that Horizon expanded the pilot to 22 practices with 80,000 patients -- and could further expand to 200,000 patients by the end of this year.
The results also reflect the principles of the PCMH, which are a fundamental departure from the way primary care has traditionally been practiced.
Instead of just providing care to the patients who seek it and come in for regular checkups, the PCMH employs specially trained nurses who coordinate the care of entire populations, such as diabetes or heart disease, to make sure they get regular screening and fill their prescriptions.
In addition, the PCMH coordinates the care the patients receive from specialists, with the goal of avoiding unnecessary procedures while at that same time ensuring that patients get the care the need -- addressing so-called gaps in care. And by having physicians on call around the clock, the PCMH helps patients avoid using the hospital emergency room unless it's really an emergency.
The pilot is a collaboration of Horizon and the New Jersey Academy of Family Physicians.
Eidus, whose Vanguard Medical Group in Cranford was one of the original eight practices in the Horizon pilot, had this to say about the experience:
"For a long time [doctors and health plans] have been on opposite sides or have been engaged in adversarial roles. I think there was kind of a mutual awakening by a lot of the practitioners and by Horizon that continuing down that path is only going to get us the same results we've had in the past -- which quite frankly are unacceptable, especially in New Jersey where we have among the highest cost and worst quality outcomes in the nation."
Lawrence Downs, chief executive of the Medical Society of New Jersey, sounded much the same note. Even though the Horizon results were "preliminary," he said, they demonstrate that "healthcare reforms that are driven by physicians and where the payers enter into true partnerships with them, those initiatives can obviously improve the quality of care delivered to patients."
Popiel also stresses the beneficial effects of PCMHs on participating physicians.
"It's great news that New Jersey was chosen to participate in this important new initiative," said Dr. Jeffrey Brenner, who heads the Institute for Urban Health at Cooper University Hospital and leads the Camden Coalition of Healthcare Providers, which for the past decade has pioneered a team approach to improving healthcare in that city.
"Aligning multiple payers behind a common model for improving primary care for high cost, complex patients is crucial," he said. "It's hard for a primary care physician to improve their practice when each payer has embraced a different model of payment and measurement."