David Wroten, executive vice president of the Arkansas Medical Society, agreed that most physicians aren’t at risk for penalties. With upper respiratory infections, the physicians who could be in trouble are those who are routinely prescribe antibiotics, or routinely order labs and x-rays, or inappropriately upcode for the office visit.
"This is going to spotlight those folks," Mr. Wroten said.
He expressed concern about the perinatal episode of care. Some physicians have a higher cesarean delivery rate, which drives up their costs, but there is no evidence to show that it’s unnecessary, Mr. Wroten said.
Going forward, Medicaid and the other payers plan to expand the number of episodes of care included in the program. Episodes involved in long-term care are on their agenda, Dr. Golden said. They are also working on how they could potentially pay physicians more for providing a patient-centered medical home, he said.
Not all doctors will benefit, even if they provide a portion of the treatment for a particular episode of care in these areas. As part of the program, the payers will identify a principal accountable provider (PAP) who is the main source of care. For instance, with an upper respiratory infection, the PAP is likely to be the primary care provider. For heart failure, the PAP likely would be the hospital where the patient was first admitted.
Even though the PAP directly controls only a portion of the spending for the episode of care, he or she is responsible for the global cost of that episode. For example, for an upper respiratory infection, the episode would begin with the initial office visit and would include all follow-up care for the next 21 days. The global cost includes office visits, labs, imaging, and any prescribed medications.
The idea is that other providers who may be involved in the episode – perhaps a radiologist or a pharmacist – are passive players, according to Dr. Golden. The PAP, who acts as a quarterback for the patient’s care, is responsible for holding down the overall costs.
For most physicians, the program won’t make a difference in their bottom lines. Medicaid and the private insurers will continue to use the traditional fee-for-service system. For the five episodes of care, the payers will set thresholds for appropriate spending, ranging from "acceptable" to "commendable." Based on claims data, the payers will retrospectively review spending and identify those physicians who are outliers.
Physicians whose average costs for a particular episode of care exceed the "acceptable" cost level will have to return a portion of the extra fees, likely about half, according to Dr. Golden. However, there will be a limit on how much physicians have to pay back to ensure that the penalties aren’t excessive, he said.
Those with costs that are lower than the "commendable" level will share about half of the savings they have generated. Those in the middle won’t see any change in payment.
Very-high-cost patient events will be excluded when calculating an average cost of care, Dr. Golden said. For instance, with upper respiratory infection episodes, infants and patients with chronic obstructive pulmonary disease could be excluded from the calculations.
Each of the participating payers will apply the program slightly differently. For example, Arkansas Blue Cross Blue Shield will start off with just three episodes of care: perinatal care, hip and knee replacement, and heart failure.