The Patient-Centered Medical Home Part I: A Primer

This article is the first of three parts.

“The times they are a-changin.’” That phrase is more than just a classic Bob Dylan song—in many ways it should be the official healthcare anthem. Just this year, the Sustainable Growth Rate has been repealed, Medicare payments are shifting to alternative payment models, ICD-10 is here whether you’re ready or not, and providers need to make heads and tails of all kinds of acronyms: MU, PQRS, VBPM, QRUR, MIPS, PCMH, ACO, CI, CIN, NCQA, MACRA, PCSP, and APM. OMG! How can a medical practice administrator possibly keep up with all this change?

This article, the first of a three-part series discussing the Patient-Centered Medical Home (PCMH), primarily focuses on the National Committee for Quality Assurance (NCQA) model. However, it is important to note the best practices, recommendations, and action steps are applicable to all models. The second article in the series will describe how to evaluate a practice to determine the opportune time to begin the PCMH transition. And for those who decide the time is right for PCMH transformation, the third article will provide tactical information on how to become a PCMH—what pitfalls should be avoided and what actions must be taken to ensure success.

The PCMH model has proved to be effective at improving quality.

The NCQA has been one of the main proponents for the PCMH concept, and for the past 12 years has championed its growth and evolution into a key component of the healthcare reformation taking place today. Contained within the details of the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), a 5% lump sum incentive payment for primary care practices participating in a PCMH model was announced. In addition to the lump sum, a 0.75% physician fee schedule increase will be offered starting in 2026, as opposed to a 0.25% increase for non–alternative payment models. Over 10,000 practices have already become NCQA-recognized PCMHs, but these represent only about 20% of all primary care clinics in the country. Fortunately for the remaining 80% of practices, incentives associated with MACRA do not start until 2019. Failure to act quickly, however, may result in practices lagging in adopting value-based care models and missing out on sizable revenue.

The PCMH model has proved to be effective at improving quality. Numerous studies outline the advantages for practices seeking to reduce emergence department (ED) visits, hospitalizations, readmissions, poorly controlled diabetes, and more. As an example, increasing access to primary care practices (a key staple of a PCMH), can reduce ED utilization by 56%.(1) This is very significant, considering the average ED visit costs $580 more than an office visit.(2) These benefits will be addressed in greater detail later and throughout the series, with the hope that as a result of this series, practices will seek a complete transformation through adoption of the PCMH model.

History

The need for the PCMH care model is a direct result of the average person’s approach to healthcare. As Toyosi Morgan, MD, Director of Preventative Medicine at Emory Healthcare and one of the physician leaders in the practice’s work in achieving NCQA Level 3 recognition (the highest level you can achieve) describes it, “[we] don’t always think of our health until we develop a problem” (personal communication). Morgan likens patients’ approach to their health to regular car maintenance—people tend to change their car’s oil every 3000 miles because they know if they don’t, their car could break down and the resulting cost will be exponentially higher. While it can be argued that patients should have more responsibility for their own health, physicians and practices should accelerate the transition from a reactive to proactive approach to healthcare delivery.

In 2003, the NCQA introduced a program called Physician Practice Connections (PPC), which emphasized the use of systematic processes and technology to begin managing patient populations to a greater extent. The desired outcome of this PPC program was to better understand a practice’s patient population and, as a result, manage their health more appropriately.

Learning and growing from their experience, NCQA expanded the PPC model in 2008 with the release of their next version, the Physician Practice Connections—Patient-Centered Medical Home (PPC-PCMH). This version began implementing the joint principles developed through the collaborative efforts of the American Academy of Pediatrics, American Academy of Family Physicians, American College of Physicians, and American Osteopathic Association. Seeing positive results, the NCQA revised the model and name in 2011 to Patient-Centered Medical Home 2011, which further aligned itself with various government health initiatives (e.g., Meaningful Use).

The 2008 and 2011 models have been the subject of numerous research studies and analysis as the government and various insurance companies have begun closely monitoring the effectiveness of these programs. The 2013-2014 Annual Review of Evidence published by the Patient-Centered Primary Care Collaborative collected and summarized the various research on the PCMH programs and found great success in an overwhelming number of cases(3):

• 89% of studies show an improvement with utilization;

• 71% of studies found cost improvements; and

• 56% of studies found improvements on access.

Specific findings include:

• 10.7% decrease in days in the hospital(4);

• 7.6% savings measured against expected cost of care(4);

• 8.5% reduction in readmissions(4);

• 5% to 8% reduction in ED utilization(5); and

• 7.4% Medical costs gross savings compared with control group reduction in readmissions.(6)

In addition to quality improvements, Medical Group Management Association analyses suggest that PCMH practices have $143.97 in total medical revenue after operating cost per patient compared with $78.43 for non-PCMH practices.(7) This significant increase in medical revenue after operating costs is due in part to the increased efficiency and increase in panel sizes that accompanies the PCMH transition. The Advisory Board projects a 43% increase in panel size.(8)

The NCQA PCMH model continues to evolve and most recently released the refined 2014 PCMH model, which includes five key changes:

1. Greater emphasis on team-based care;

2. Further integration with behavioral medicine;

3. Increased focus on intentional quality improvement, specifically aligned with the Triple Aim (who’s goals include improving the patient experience of care, the health of populations, and reducing the per capita cost of healthcare);

4. Updated alignment with Meaningful Use Stage 2; and

5. Narrowed focus on the care management of high-risk patients.

The continued development and refinement of the PCMH model has cemented it as the foundation for healthcare reform moving forward. The expectation is that the number of practices with PCMH accreditation will continue to increase beyond the 10,000 recognized models today. In fact, Health and Human Services officials have called for fee-for-service payments through alternative payment models, such as the patient-centered medical home, to increase to 50% by the end of 2018.(9)

Physician Drivers

The Triple Aim has the goal of providing the best care at the lowest cost for the whole population. The Centers for Medicare & Medicaid Services (CMS) has been putting increasing pressure on clinics to evolve through the use of programs that have significant payment adjustments for lack of participation or poor results. The Physician Quality Reporting System (PQRS) and Value Modifier go hand in hand, in that practices are required to participate or risk being penalized up to 6% in 2018 based on failure to submit in 2016; practices that do not submit receive a 2% penalty from PQRS and a 4% penalty for the Value Modifier.(10) Because practices are required to submit more information, this gives them an opportunity to evaluate how they perform against the benchmark in various cost and quality measures in a report called the Quality and Resource Use Report (QRUR).

QRURs provide meaningful and actionable data from CMS on cost and quality outcomes (e.g., determining variance in per capita costs by diagnosis). This allows practices to have a firm understanding of how they perform compared with their peers. Due to the beneficiary allocation model that is used in the Value Modifier, primary care practices are allocated a large number of beneficiaries, and therefore have a great opportunity to truly evaluate how they perform. At the same time, with a large number of attributed beneficiaries there is greater risk for negative payment adjustments.

Details of the various quality programs go beyond the scope of this article, but the key takeaway is that the total revenue at risk for a practice and health system is rapidly on the rise. An organization must focus on three critical areas: enterprise intelligence; revenue transformation; and clinical enterprise maturity. Forward-thinking primary care practices that can quickly adopt care models proven to improve quality and reduce costs position themselves for success in the future.

What is a Patient-Centered Medical Home?

The effectiveness of a successfully implemented PCMH program is very well documented, with plenty of evidence demonstrating cost improvements, decreased ED utilization, improved quality outcomes, and even increased practice revenue. So what exactly is a PCMH, and what components make up a PCMH practice?

The NCQA PCMH model is like a Russian doll: you peel back one layer to reveal another and you peel back that next layer to reveal a third. Those layers are called Standards, Elements, and Factors. As you move from one layer to another, each layer gets more detailed and more specific about what a practice should be doing. Another way to imagine the PCMH model is to think of it as an architectural blueprint for clinical success. Each standard is a different floor in your house—each floor has its own purpose and the house cannot stand on its own without each floor— and the elements are the various rooms in that floor that make it complete. The factors are the details for each room—the furniture, paintings, their arrangement, and so on (Figure 1).

Figure 1. The ways in which the various components of a Patient-Centered Medical Home (PCMH) application build upon each other. Factors are the most detailed and specific components. These factors are combined to form elements, which are grouped into like segments to form standards. The six standards, together, form the foundation for a Patient-Centered Medical Home.

Six standards are designed to meet the specific goals of the triple aim:

• Patient-centered access;

• Team-based care;

• Population health management;

• Care management and support;

• Care coordination and care transitions; and

• Performance measurement and quality improvement.(11)

Within the six standards are 27 associated elements. Six elements are designated “must-pass” elements, meaning you cannot receive recognition as a PCMH without the successful implementation and integration of that element. The NCQA has selected specific must-pass elements to direct a practice’s focus and efforts to successfully implementing these very fundamental and essential concepts. An example of a must-pass element is Standard 1, Element A – Patient Centered Appointment Access. This element requires a practice to determine and define various workflows for providing routine and urgent same-day appointments, to determine how to provide care outside of regular business hours, to explore and implement alternative methods of conducting a patient visit, to put in place basic capacity management, and to implement access-focused process improvement.

Factors describe, in detail, what exactly a practice needs to do to receive recognition and designation as a PCMH. Factors may require a practice to submit written processes, reports, screenshots, example materials, and even blinded patient health records. There are 178 factors a practice may complete, and each set of factors earns a practice a certain percentage of the total points available within an element.

Tier 3 is the highest tier a practice can achieve.

But what happens if a practice cannot complete all 178 factors? PCMH tiers practices based on how well they implement the various standards, elements, and factors. Tier 3 is the highest tier a practice can achieve, and for that, a practice needs to earn 85 of the 100 possible points. Tier 2 is the 60- to 84-point range, and Tier 1 is from 35 to 59 points

If you achieve Tier 1 or 2 but want to jump up a level, you have the opportunity to complete an add-on survey. This is an additional survey (and extra cost) in which you can submit new or adjusted data. Bumping up a level doesn’t add any time to the three years you are recognized as a PCMH, but instead allows you the opportunity to demonstrate continued effort to fully implement PCMH factors.

What if you are the administrator of a larger practice with three or more practice sites? In that case, you can fill out a multi-site application. To be eligible for a multi-site application you need three or more sites that use the same procedures and have the same electronic health record system. If this is the case, you will fill out an application that includes roughly half the factors. Those completed factors carry over to each site’s individual application, meaning you will not need to duplicate efforts. Because PCMH recognition is granted at a site level, each practice must submit its own application. The multi-site survey will allow that group of factors to be applied across all sites, thereby reducing the work necessary on the applications for each site.

The multi-site survey is very valuable from a timing perspective, because the application itself takes quite a bit of time to complete. Most practices report requiring about 12 months to complete a PCMH application. This is due in part to the size of the application, but also because PCMH is more than just a form to fill out—it is a transformation in how practices work and function. Change takes time to accomplish, and during that time, competing interests vie for a practice’s attention and focus. That is why, as will be described in great detail in coming articles, strong physician and staff leadership is a necessity to achieve recognition.

Conclusion

The PCMH is becoming a cornerstone of healthcare reform. MACRA specifically references medical homes, and the research findings are very promising.(12) Practices that position for the future through embracing these models will be positioned effectively for value-based reimbursement, meeting population health expectations and most importantly able to meet their patients’ needs (Figure 2). There are distinct benefits for both patients and providers from implementing the core concepts of medical homes, most evident in the government’s backing of the program and commercial payers’ development and support of medical homes.

Figure 2. Summary of the key takeaways from the article. PCMH, Patient-Centered Medical Home; SGR, Sustainable Growth Rate.

As mentioned in the introduction, this is the first of three articles in the comprehensive PCMH series. The next article will explore whether your practice is ready for the journey. It will cover specific application details and discuss approaching the cultural transformation that must take place.

References

1. New England Healthcare Institute. A matter of urgency: reducing emergency department overuse. NEHI.net . March 2010; www.nehi.net/writable/publication_files/file/nehi_ed_overuse_issue_brief_032610finaledits.pdf. Accessed October 5, 2014.

2. Machlin SR. Statistical Brief 111: expenses for a hospital emergency room visit, 2003, Adjusted to 2007 Data. Medical Expenditure Panel Survey (MEPS). January 2006. Rockville, MD: Agency for Healthcare Research and Quality (AHRQ). 2006; www.meps.ahrq.gov/mepsweb/data_files/publications/st111/stat111.pdf . Accessed November 1, 2010.

3. Nielsen M, Gibson A, Buelt L, Grundy P, Grumbach K. The patient-centered medical home’s impact on cost and quality–annual review of evidence. Milbank.org . www.milbank.org/uploads/documents/reports/PCPCC_2015_Evidence_Report.pdf . Accessed October 3, 2015.

4. 2014 PCMH Program performance report. Carefirst.com. July 30, 2015; https://member.carefirst.com/carefirst-resources/pdf/pcmh-program-performance-report-2014.pdf . Accessed October 4, 2015.

5. David G, Gunnarsson C, Saynisch PA, Chawla R, Nigam S. Do patient-centered medical homes reduce emergency department visits? Health Services Research. 2015;50:418-439.

6. Advancing primary care delivery: practical, proven, and scalable solutions. UnitedHealthGroup.com . September 2014; www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashx . Accessed October 5, 2015.

7. Medical Group Management Association. MGMA Cost Survey: 2014 Report Based on 2013 Data. MGMA.com . www.mgma.com/Libraries/Assets/Key-Findings-CostSurvey-FINAL.pdf?source. Accessed October 5, 2015.

8. Reid RJ, Coleman K, Johnson EA, et al. The Group Health Medical Home at year two: cost savings, higher patient satisfaction, and less burnout for providers. Health Affairs. 2010;29:835-843.

9. Better care. Smarter spending. Healthier people: paying providers for value, not volume. CMS.gov . January 26, 2015; www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-01-26-3.html . Accessed October 4, 2015.

10. Value-based payment modifier. CMS.gov . www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeedbackprogram/valuebasedpaymentmodifier.html. Accessed October 3, 2015.

11. 2014 PCMH Standards and Guidelines (epub). NCQA.org. http://store.ncqa.org/index.php/2014-pcmh-standards-and-guidelines-epub-single-user.html . Accessed October 2, 2015.

12. H.R.2–Medicare Access and CHIP Reauthorization Act of 2015. Congress.gov . www.congress.gov/bill/114th-congress/house-bill/2/text . Accessed May 2, 2015