Managed Care Contracting & Provider Payment

Is Your Organization Implementing a Policy for “Never Events”?

I’m once again asking for information from you –

In November, 2006, the National Quality Forum released a list of 28 medical events that it called “serious reportable events.” Shortly after, the Leapfrog Group, an association of employers working to improve health care quality, issued a position statement on what it termed “Never Events”. The Leapfrog Group encouraged hospitals to: (i) apologize to the patient and family affected by the “Never Event”; (ii) report the event to an accrediting reporting agency for medical errors; (iii) analyze the root cause of the error and (iv) waive all costs related to the event.

Medical Center Restructures Payments to Share Savings from Efficient Practice Patterns

Recently, Virginia Mason adopted treatment guidelines for several diagnoses to reduce the number of expensive tests ordered and streamline the number of expensive specialty physician services used. These initiatives resulted in financial penalties to the hospital based on existing payment systems which reward the number of tests ordered and specialists used. As an example, the article states “Insurers often reimburse high-tech procedures richly, while simpler remedies and visits to doctors, therapists or nurses earn far less and sometimes incur losses. With each MRI that Aetna and the employers avoided at around $850, Virginia Mason lost about $450 in profit.” In one department, the guidelines yielded over $100,000 in savings to area employers, but resulted in losses to the medical center.   

20 Questions About Pay 4 Performance

A very interesting article, published in April by the Agency for Healthcare Research and Quality lists 20 questions for health care purchasers considering a pay for performance incentive system. The most interesting part of the article is that it “deconstructs” the diverse features of pay for performance systems and discusses the factors that go into each choice of feature. The discussion should educate payors who are considering P4P as well as providers who are presented with one – or provider organizations considering designing their own.

The article is: Dudley RA, Rosenthal MB. Pay for Performance: A Decision Guide for Purchasers.  Rockville, MD: Agency for Healthcare Research and Quality; 2006. AHRQ Pub. No. 06-0047. A link to the report is: HERE

12th Question About a Commercial Payor’s Pay-for-Performance Incentive Program

A CEO from a federally qualified healthy center adds the following question: 

“One question we should all ask is what effect do these programs have on the non-compliant patient? These folks who need us most will be the ones physicians eliminate from their panels because they are not meeting "criteria".”

Good point. The medical provider is "graded" on whether the guidelines were met even when he / she / it does not have ultimate control over whether the patient accepts the care.

11 Questions to Ask About a Commercial Payor’s Pay-for-Performance Incentive Program

Pay for performance is cited as the “next big thing” the latest in trend in incentive compensation between payors and providers (physicians and hospitals).

One source says there are already over 100 different Pay-for-Performance programs being offered by payors across the country.  [Rewarding Quality Performance: The Multidisciplinary Approach, 5/12/06, Alliance for Health Reform, replay available at: Kaiser Foundation] The Boston Globe recently reported that Blue Cross Blue Shield of Massachusetts is doubling to $189 million the annual amount it spends on pay-for-performance incentives for health care providers. Incentives to improve quality sound like a positive thing, but with all this going on, we suggest some questions to ask when evaluating these initiatives.