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MedPAC promotes 'more flexible payment systems'

The Medicare Payment Advisory Commission has found through an analysis of pilot projects what is already widely known - that the current fee-for-service model does not promote the teamwork and flexibility needed to coordinate care to improve patient outcomes.

The fragmented delivery of care and the number of providers involved in a patient's episode of care erects barriers to be able to effectively coordinate care, the commission said during a meeting held last Friday.

[See also: MedPAC issues 2013 payment recommendations]

MedPAC wants to develop recommendations for payment incentives to encourage innovation to achieve better patient results.

The fee-for-service model is not as accommodating for organizations to find what works for their patient population and requires proven interventions, said Glen Hackbarth, MedPAC chairman and an independent consultant.

"I think there is broad agreement here that more flexible payment systems that get away from fee for service and are broadly bundled not only create incentives, but they also give providers the flexibility to allocate resources and be accountable for those resources," he said.

In a study of demonstration projects of care coordination in fee-for-service Medicare, "promising models were not always able to recruit enough participants or be financially viable," said Kate Bloniarz, MedPAC analyst. In addition, lower hospitalizations did not necessarily lead to lower program spending. The projects ran for several years.

[See also: MedPAC advises 1 percent pay increase for doctors, hospitals]

At the same time, the Centers for Medicare and Medicaid Services is paying incentives to providers that can demonstrate meaningful use of electronic health records (EHRs), and the requirements increasingly call for sharing patient information among physicians and hospitals and care settings to achieve better patient results. CMS' Innovation Center also has launched pilots for team-based patient care and bundled payments, in which providers may share in the savings.

But under the traditional fee-for-service model, the evidence is mixed on which elements of care coordination are most critical to success. Programs may incorporate the same elements and appear similar, "but are quite different on the ground," Bloniarz said.

Massachusetts General Hospital in Boston had more success than other demonstration projects because it conducted extensive planning in its health center pilot to identify problems and made sure that the patients enrolled in the pilot had established ties to the physicians' organization, she said.

Each physician was paired with only one care manager to streamline the case management, and physicians were paid a fee for interacting with the care manager.

Electronic health records, interoperable information systems and communications protocols were critical tools in linking the care manager, hospital, medical practices and beneficiaries. "The care manager knows when the beneficiary shows up at the hospital," Bloniarz said.

Care coordination can't be plugged in like a module, but evidence of best medical practices can be available to organizations to build into their culture and values, said Mary Naylor, a commission member and nurse from the University of Pennsylvania.

"We know that this is not cookbook stuff. This is multi-dimensional and managing complexity in complex systems," she said. Often clinicians don't talk to each other within systems let alone across providers.

"I think the core issue is finding what are the best combinations of incentives or disincentives to get to the outcomes that people care about, like their functioning and quality of life," she said. Providers need to be able to apply multiple approaches and not just one because people's needs change over time.

MedPAC's analysis and comments about the state of care coordination will be included in the advisory group's report to Congress in June.

[See also: MedPAC approves SGR repeal proposal]

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