Published in Health Care

Priority Health, Blue Cross work together in pilot program to drive primary care efficiency

BY Sunday, September 04, 2016 03:00am

Setting aside their competitive tendencies, Priority Health and Blue Cross Blue Shield of Michigan are working together with the federal agency that administers Medicare and Medicaid to test new ways to pay doctors and drive cost and quality improvements.

Through an initiative known as Comprehensive Primary Care Plus, the two largest health plans in Michigan will alter compensation models for participating primary care doctors to enable practices “to care for their patients the way they think will deliver the best outcomes and to pay them for achieving results and improving care,” according to the federal Centers for Medicare & Medicaid Services, or CMS.

CMS designed the pilot to further push a transition in health care to a performance- or value-based payment system that compensates and rewards doctors and hospitals for quality and efficiency.

“There’s a collective gain for us all to work together like this to help transform not only Priority Health’s business, but the business of health care for the entire state of Michigan,” said Priority Health COO Michael Koziara.

Priority Health and Blue Cross Blue Shield are among 57 health plans in 14 regions that CMS chose for Comprehensive Primary Care Plus, which aims to enroll 5,000 primary care physicians to participate. 

Building on a prior five-year effort that concludes at the end of this year, the initiative seeks to move CMS toward a goal of having 50 percent of its payments to primary care doctors based on an alternative to the traditional fee-for-service model by 2018.

When the new five-year effort ends, CMS and participating health plans hope to see a change in the ever-escalating cost of health care.

“We’d like to be able to say … we were able to see a continued improvement in the quality of care, a clear improvement in the satisfaction of patients that do receive that care, and — as important as the other two — to see a declining cost of care so that our premiums that individuals and our employer groups pay improve,” Koziara said. 

The prior effort, launched in October 2012, sought to begin moving CMS toward a value-based payment system, to improve primary care and to reduce unnecessary care. Early data from that pilot suggested that it generated enough savings to nearly cover care management fees while also leading to reduced hospitalizations and fewer visits to outpatient emergency room visits, primary care physicians, and specialists, according to an analysis of the program’s second year.

The initial pilot generated an estimated $325 million in savings for CMS in Michigan by paying participating providers based on value and led to the follow-up Comprehensive Primary Care Plus by CMS, said Dr. Tom Simmer, senior vice president and chief medical officer at Blue Cross Blue Shield of Michigan.

Simmer expects savings to grow as payers and providers learn more together in the new, larger pilot about how best to implement and execute a value-based payment model.

Further potential savings come from raising the level of primary care that patients receive to  improve or maintain their health, coordinating care better across various providers, managing chronic medical conditions, and preventing costly hospital admissions. Doing so involves making greater use of care teams to manage a case, engaging care managers to work with people who are chronically ill to deal with their conditions, and gathering and analyzing large swaths of data to identify high-risk patients who need more attention.

“There are very few things that we can do that are more important than improve care at the primary-care practice level,” Simmer said. “We believe very strongly that having a really high-performing primary care foundation to health care accomplishes a lot in terms of making that care much better coordinated, cost effective and achieving better outcomes.”


Among the differences from the initial pilot, the Comprehensive Primary Care Plus initiative will seek to provide payments to participating physicians on a real-time basis, Koziara said. As the value-based model emerged in recent years, Priority Health paid incentives annually to doctors who met quality metrics. Under Comprehensive Primary Care Plus, payments will occur monthly, he said.

The difference represents a “real powerful enhancement” that provides additional incentive for doctors to transform their practices and move away from the fee-for-service payment model, he said.

“The providers get the cash up front. They can meet their obligations and there’s a closer correlation to their actions with their payment. From a cash-flow perspective and from an incentive correlation perspective, they’re getting the money upfront as opposed to waiting almost a year, in some cases,” Koziara said. “Real-time cash flow for any enterprise is an important aspect of any business relationship. Then they can take that cash flow and they can use that to make the investments that are necessary to be better managers of their patients and their population.”

Health insurers involved in the pilot will adjust payments to doctors based on the severity and complexity of their patient population.

As Priority Health implemented value-based contracting with doctors, it has been working to introduce risk adjustments for case complexities. The Comprehensive Primary Care Plus initiative “now builds that as an expectation,” Koziara said.

“If they have more complex patients and need to spend more time with them, they’ll get more money,” he said. “Other doctors that have a little less complex patient needs will get a little less for that, but they don’t need that much because people that are young and healthy need less of an oversight in terms of their support, obviously, than people with a lot of needs.”


Although it’s an initiative of the Centers for Medicare & Medicaid Services, the pilot project extends to all patients of participating primary care physician practices, whether they are enrolled in a Medicare, Medicaid, individual, or commercial health plan.

“They’re really bringing everybody in to try to have all practices, or as many as possible, demonstrate that they can do this successfully, and then within those practices, it will be the model of care for all of the patients,” Simmer said.

CMS is accepting applications from physicians until Sept. 15 to participate in the Comprehensive Primary Care Plus program. 

Priority Health expects up to 100 physician practices in its care network to become involved in the program, affecting as many as 250,000 members. Blue Cross Blue Shield could start out with about 400 practices statewide and expand it to 800 over the five-year period, Simmer said.

Physician practices can apply for participation in two tracks, one of which requires a higher level of patient management and coordination using an advanced patient-centered medical home model, plus better use of electronic medical records to support patient care, Koziara said. Practices in that higher-level track also must have a care model to support behavioral health.

Along with that higher standard of participation comes higher payments for success, he said.

“There’s a higher standard of participation, but there’s a higher opportunity to be compensated for that,” Koziara said. “It’ll be very interesting to see if the greater investments in the advanced model give a better return in terms of quality experience and cost effectiveness.” 

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