2. OFFICERS
DIRECTORS
United Hospital Fund
J. Barclay Collins II
Chairman
Richard A. Berman
Jo Ivey Boufford, MD
Rev. John E. Carrington
Derrick D. Cephas
Philip Chapman
Dale C. Christensen, Jr.
J. Barclay Collins II
Richard Cotton
Michael R. Golding, MD
Josh N. Kuriloff
Patricia S. Levinson
David Levy, MD
Howard P. Milstein
Susana R. Morales, MD
Robert C. Osborne
Peter J. Powers
Mary H. Schachne
John C. Simons
Michael A. Stocker, MD, MPH
James R. Tallon, Jr.
Frederick W. Telling, PhD
Mary Beth C. Tully
The United Hospital Fund is a health services research
and philanthropic organization whose primary mission is to
shape positive change in health care for the people of New
York. We advance policies and support programs that promote
high-quality, patient-centered health care services that are
accessible to all. We undertake research and policy analysis
to improve the financing and delivery of care in hospitals,
health centers, nursing homes, and other care settings. We
raise funds and give grants to examine emerging issues and
stimulate innovative programs. And we work collaboratively
with civic, professional, and volunteer leaders to identify
and realize opportunities for change.
James R. Tallon, Jr.
President
Patricia S. Levinson
Frederick W. Telling, PhD
Vice Chairmen
Sheila M. Abrams
Treasurer
Sheila M. Abrams
David A. Gould
Sally J. Rogers
Senior Vice Presidents
Michael Birnbaum
Deborah E. Halper
Vice Presidents
Stephanie L. Davis
Corporate Secretary
HONORARY DIRECTORS
Howard Smith
Chairman Emeritus
Douglas T. Yates
Honorary Chairman
Herbert C. Bernard
John K. Castle
Timothy C. Forbes
Barbara P. Gimbel
Rosalie B. Greenberg
Allan Weissglass
3. Advancing Patient-Centered
Medical Homes in New York
Gregory Burke
D I R E C T O R , I N N O VA T I O N S T R A T E G I E S
UNITED HOSPITAL FUND
UNITED
HOSPITAL
FUND
4. Copyright 2013 by United Hospital Fund
ISBN 1-933881-37-2
Free electronic copies of this report are available at
the United Hospital Fund’s website, www.uhfnyc.org.
5. Contents
INTRODUCTION
1
I. CURRENT STATUS AND TRAJECTORY OF THE MEDICAL HOME MODEL IN NEW YORK 2
PCMH Certification
The State Health Innovation Plan
II. WHAT PROVIDERS NEED TO EXPAND ADOPTION OF THE MEDICAL HOME MODEL
1. Health Information Technology
2. An Evolving Care Model
3. Supporting Practice Transformation
4. Getting Paid for a Medical Home
5. Changing Payment Methods
6. Targeting vs. Transformation
III. THE PROVIDER PERSPECTIVE
Paying for the Medical Home: Some Principles
Where Multipayer Alignment Is Needed
IV. THE PAYER PERSPECTIVE
What Payers Need From Providers
The Challenge of Multipayer Alignment
3
4
5
6
7
7
8
8
9
10
10
10
11
11
12
V. WHAT CONSUMERS AND PURCHASERS WANT
13
SUMMARY
13
REFERENCES
14
iii
7. Introduction
This paper was prepared as background for a
roundtable discussion, “Moving the PatientCentered Medical Home Forward in New York
State: Defining and Resolving Challenges to
Payer-Provider Alignment,” co-sponsored by the
Primary Care Development Corporation, the
New York Chapter of the American College of
Physicians, and the United Hospital Fund on
November 4, 2013.
While New York State has experienced rapid
growth and diffusion of the medical home model
over the past few years, maintaining that
trajectory will depend on a number of factors.
Central among them is changing the payment
system for primary care from the fee-for-service
system to one that supports the medical home
model.
The goal of the roundtable, which included
leaders from the provider and payer sectors,
purchasers, self-insured plans, and from the
State of New York Departments of Health,
Mental Health, Financial Services, and Civil
Service, was to identify and discuss:
• key issues that challenge the ability to bring
the patient-centered medical home (PCMH)
model to scale in New York, and
• ways in which those challenges might be
addressed.
This paper is organized into five parts:
I. The current status and trajectory of the
medical home model in New York;
II. What providers need to do to implement the
medical home, and some issues they face in
doing so;
III.What providers need from payers to expand
the adoption of the medical home model in
New York State;
IV. What payers need from providers to support
the medical home model; and
V. What purchasers and consumers need and
want from both providers and payers
promoting the medical home.
The analysis here is based on discussions with
leaders who generously shared their time,
perspectives, and insights into the key issues
that need to be resolved in order to expand the
adoption of the medical home model across the
state. The issues they raised serve as the
foundation for this report, particularly the roster
of issues presented in sections III, IV, and V.
An accompanying chartbook, Patient-Centered
Medical Homes in New York: Updated Status and
Trends as of July 2013, provides data and insights
on the adoption and spread of the PCMH model
in New York over the last three years. Like this
report, it is available on the United Hospital
Fund’s website, www.uhfnyc.org.
This paper was supported in part by the Altman
Foundation, TD Charitable Foundation,
EmblemHealth, New York Community Trust,
and Excellus BlueCross BlueShield.
Advancing Patient-Centered Medical Homes in New York
1
8. I. Current Status and Trajectory of the
Medical Home Model in New York
It has been six years since the nation’s four major
primary care societies first articulated the Joint
Principles of the Patient-Centered Medical Home
(PCMH). An increasing number of studies have
demonstrated the model’s effectiveness, and—as
is shown in Figure 1—primary care providers
across the nation have embraced the model as a
way to increase the quality and impact of
primary care they provide.1-11
Many payers, finding the PCMH effective in
improving quality and member satisfaction and
reducing preventable utilization and cost, are
paying differently, paying more for primary care
delivered in a medical home.
Based on a recent review of National Committee
for Quality Assurance (NCQA) data counting
both NCQA-recognized practices and providers
working in those practices, New York is home to
one-sixth of the total number of NCQArecognized PCMHs in the country (Figure 2).
New York State has led the nation in the
adoption of the medical home model. As of July
2013, nearly 5,000 clinicians in New York were
working in practices that had been recognized by
the National Committee for Quality Assurance
(NCQA) as PCMHs.
While one-quarter of all primary care
practitioners in the state work in PCMHrecognized practices, three-quarters still do not,
despite the growth of the model.
As is shown in Figure 3, the rate of adoption of
the PCMH model in New York seems to be
leveling off: after rapid expansion in the adoption
of the model between 2011 and 2012 (when the
number of clinicians in PCMHs in the state
Figure 1. Growth in NCQA-Recognized PCMH Sites,
United States, 2008-13
6,000
4,000
2,000
0
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Source: National Committee for Quality Assurance. 2013. Patient-Centered Medical Homes (Fact Sheet).
Available at http://www.ncqa.org/Portals/0/Public%20Policy/2013%20PDFS/pcmh%202011%20fact%20sheet.pdf
(accessed November 25, 2013).
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United Hospital Fund
9. Figure 2. PCMHs (Practices and Providers) in New York,
Other States, and the United States
2008
Standards
218
515
686
711
556
421
1,882
1,761
4,859
1,221
594
7,630
21,054
State
California
Florida
Illinois
Massachusetts
Michigan
New Jersey
North Carolina
Pennsylvania
New York
Texas
Washington
Other States
U.S. Total
2011
Standards Total in State
2,227
2,445
589
1,104
447
1,133
819
1,530
167
723
307
728
605
2,487
828
2,589
1,417
6,276
447
1,668
364
958
7,811
15,441
16,028
37,082
Pctg. of U.S.
Total
7%
3%
3%
4%
2%
2%
7%
7%
17%
4%
3%
42%
100%
Note: NCQA data include practices recognized as PCMHs and providers working in those practices.
Source: NCQA Recognition Directory. Available at http://recognition.ncqa.org/index.aspx (accessed
October 7, 2013).
Figure 3. Growth of Providers in NCQA-Recognized PCMHs,
New York, 2012-13
5,000
4,000
2012-13:
5% growth
2011-12:
37% growth
3,000
2,000
1,000
0
2011
2012
2013
Advancing Patient-Centered Medical Homes in New York
3
10. grew by 37 percent), the growth between 2012
and 2013 was only 5 percent.
The PCMH model is not evenly distributed
across different types of practices. As is shown in
Figure 4, NCQA recognition in New York tends
to be concentrated in practices with “scale”—
group practices, health centers, and
institutionally based providers. PCMH adoption
by smaller practices (<4 physicians), which lack
the scale to put in place the required
infrastructure, is far lower.
The New York State Department of Health’s
“Hospital Medical Home” program is likely to
increase the number of hospital teaching clinics
achieving recognition under NCQA’s 2011
standards over the next year; there is no
equivalent program or initiative focused on
providers working in other practice types.
PCMH Certification
As the PCMH model matures, standards are
becoming more demanding. The NCQA and
others are applying increasingly stringent criteria
for recognition as a medical home.
Of the nearly 5,000 New York State providers
working in PCMHs, 80 percent were recognized
under NCQA’s “first-generation” 2008 standards.
Those practices—whose initial recognition was
for three years—will soon need to reapply under
the NCQA’s 2011 standards.
Providers recognized under the 2008 standards
(particularly those recognized as Level 1 or 2
PCMHs) may have difficulty meeting—or be
unwilling to meet—the new and more stringent
standards. This may result in some practices
“dropping out” of that program.
As is shown in Figure 5, of the 3,900 providers
currently recognized by NCQA under the 2008
standards, 588 (15 percent of those recognized
under NCQA’s 2008 PCMH standards) work in
practices recognized as Level 1 or 2. These
practices and providers are at particular risk,
facing the biggest challenge in maintaining their
NCQA recognition.
The State Health Innovation
Plan
The evolving medical home is a centerpiece of
New York’s State Health Innovation Plan (SHIP)
and is likely to be included as part of an
application to the Center for Medicare and
Medicaid Innovation (CMMI) for $40-60
million in funding under the State Innovation
Models (SIM) initiative in early 2014.
Figure 4. PCMHs in New York State by Practice Type, 2012-13
1,600
2012
2013
1,200
800
400
0
Group
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Health Ctr
HHC
Hosp Clinic
Hosp Px
Practice
11. In its SHIP, the New York State Department of
Health (NYSDOH) is proposing a three-tiered
advanced primary care (APC) model. The three
categories (tentatively, “Pre-APC”, “Standard
APC”, and “Premium APC”) reflect increasing
capabilities.
The state plans to use a portion of the funds
requested from CMMI to support primary care
practices statewide in adopting the APC model,
and to help those practices already so recognized
to continue building their capacity and
improving their performance.
The SHIP uses NCQA PCMH recognition as
one marker for the Standard APC tier, and adds
a new category (“Premium APC”) for providers
that can demonstrate enhanced capacities,
including:
• better coordination with specialists in
“medical neighborhoods”;
• closer relationships with hospitals for
smoother care transitions;
• integration of behavioral health screening and
treatment in their practices; and
• closer working relationships with communitybased prevention and wellness programs.
New York’s plan focuses on ensuring that APC
practices would be paid differently by all payers,
consistent with their increased costs and value.
In fact, being able to demonstrate multipayer
support is a requirement of the SHIP, necessary
to ensure statewide adoption.
A number of factors, described in the following
pages, challenge the further expansion of the
medical home model in New York and have the
potential to erode gains made to date.
Figure 5. Providers in PCMHs by NCQA Program
and Level, New York State, July 2013
Level 2: 57 (1%)
Level 1:
10 (0%)
Level 3:
936 (19%)
Level 1:
405 (8%)
Level 3:
3,317 (68%)
Level 2:
183 (4%)
Advancing Patient-Centered Medical Homes in New York
5
12. II. What Providers Need to Expand Adoption
of the Medical Home Model
patients, using dedicated care managers
supported by registries.
As is shown in Figure 6, providers must
undertake a series of sequential changes as they
move from a “traditional” primary care practice
to a PCMH/APC model.
A medical home is quite different from a
traditional primary care practice. In transitioning
to a medical home model, practices need to:
• Expand operating hours, changing how they
schedule patients, developing new functions
and new skills, creating new roles for existing
staff and adding new staff, all of whom work
together effectively as a team;
• Interact with patients differently, with more
pre- and post-visit contact, using secure
portals for communication and routine
requests;
• Change the nature of patient visits by
planning and preparing for visits in advance,
with work lists for clinicians to help them
focus on closing gaps in care and on
managing both current and impending
problems;
• Actively manage quality of care, with new
systems to support the use of evidence-based
best practices and new processes for
measuring and reporting process and
outcome measures; and
• Closely manage referrals and care transitions,
particularly those of high-risk, chronically ill
Each of the steps marked with an asterisk (*)
requires some type of up-front investment by
providers: capital, paying for technical
assistance, working capital, increased operating
costs. These are investments in overhead costs,
not generally recognized or covered under the
prevailing fee-for-service payment system.
Some issues related to implementing the
medical home model in a traditional primary
care practice are discussed below.
1. Health Information Technology
The Issue: Over the past decade, New York’s
HEAL program, New York City’s Primary Care
Information Project, and federal/state Meaningful
Use programs provided financing and technical
assistance to help practices acquire and use
electronic medical record (EMR) systems and
participate in regional and statewide health
Figure 6. Steps for Implementing the Medical Home
Premium APC
TA for collaborative care, other functions*
PCMH (2011 Standards) / APC
TA on additional requirements*
Payments reflecting added
costs and value of PCMH
Additional Operating Costs
TA for practice transformation*
Capital and TA for EMR*
PCMH (2008 Standards)
EMR
Baseline
* Step requiring up-front investment.
6
United Hospital Fund
13. information exchanges. As the HEAL program is
phased out, it is not clear how the remaining
physicians and practices will assemble the capital
to purchase those technologies, participate in the
regional data exchanges, or pay for the technical
assistance required to reorganize their practices,
and workflow.
Although not a formal requirement of the
NCQA’s 2008 standards, health information
technology (HIT) is in fact essential to a primary
care provider’s success as a PCMH; it is now
required by the NCQA’s 2011 standards.
Medical homes must have sophisticated EMRs
that can establish and maintain registries, stratify
populations and identify high-risk patients
needing care management, identify and highlight
“gaps” in recommended care, accept and analyze
new data input, and generate different types of
reports.
Despite substantial state investments and
increasing adoption of EMRs in hospitals, health
centers, physician groups, and primary care
practices in New York State, many practices
(particularly small practices) do not currently
have EMRs with those capacities. For those
practices, acquisition and use of an EMR
represents a substantial up-front capital
investment.
New York State has created a network of regional
health information exchanges (HIEs) that have
the potential to greatly improve continuity,
coordination, and quality of care; reduce
duplication of services; and control costs across
the state.
Primary care practices connected to an HIE can
exchange clinical information with specialists,
hospitals, laboratories, and pharmacies; but
connecting to these HIEs requires that the
practice make additional (and unreimbursed)
investments in interfaces and training.
2. An Evolving Care Model
The Issue: Models for medical homes are
changing. Accrediting agencies, payers, and the
NYSDOH are adopting and endorsing models that
differ from each other today, and are likely to
diverge further over time. For primary care
providers to develop and sustain programs of care
that are recognizable as medical homes, there must
be more agreement among the various parties on a
“preferred” model or models, and more congruence
regarding criteria that providers must meet in order
to be treated and paid as medical homes.
Over the past five years, practices in New York
pursuing the medical home model had a fairly
consistent set of standards to use: the NCQA’s
2008 standards. That model of care has been
used by the State and others as the gold standard
for identifying practices that were likely to be
higher-performing; and it has been used by
Medicaid and other payers to identify practices
eligible for different types and levels of payment.
Increasingly, providers and payers have noted
that achieving recognition under the NCQA’s
2008 standards constitutes a good foundation—
necessary, but not sufficient—but is not always
indicative of true “practice transformation.”
The NCQA has issued a new and more rigorous
set of standards.12 These include capacities that
providers and payers have noted as important for
the effectiveness of a medical home in improving
quality and patient experience and reducing
utilization and cost.
The medical home model continues to evolve
within and beyond formal NCQA recognition.
New York State’s recent articulation of the APC
Advancing Patient-Centered Medical Homes in New York
7
14. model parallels action elsewhere, as states and
payers have put forth new, often tiered models
(tied to different payment rates and methods) for
medical homes. These models generally build on
the NCQA’s foundation, often adding new
emphases and competencies.
3. Supporting Practice Transformation
The Issue: As part of their demonstration projects,
some payers in New York have provided “start-up”
funding (or in-kind support, like embedded care
managers) to specific practices; others have
“advanced” PCMH payments to practices while
they were pursuing NCQA recognition. Those,
however, are the exceptions.
In most cases, no funding or payment is available
to practices to cover their start-up costs. When
payers offer augmented “medical home” payments,
they tend to be made to practices that have already
achieved NCQA recognition. As the medical home
model and primary care practices’ capacities evolve
over time, subsequent investments will be required
to enable providers to incorporate further changes
in the program model.
The process of “practice transformation”—
moving from a traditional primary care practice
to a PCMH model—is a complex undertaking.
Generally, practices need expert assistance from
consultants to help them implement the PCMH
model, assisting with workflow redesign, the
design and use of registries, training of existing
and new staff, new processes for care
management, and improved techniques for
patient engagement.
With the increasing expectations for the PCMH
model come additional demands for practice
transformation. For example, the NCQA’s more
stringent 2011 standards require enhanced care
coordination with hospitals and specialists and
more active care management.
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United Hospital Fund
Similar investments in technical assistance will
be required to put in place new models like the
state’s proposed “Premium APC” model, which
includes new competencies:
• Integrating behavioral health screening and
care management into the medical home,
using the Collaborative Care model, requires
new staff and skills, as well as workflow
changes focused on managing the care of
patients with behavioral health problems.
• Increasing the involvement of practices in
community-based prevention and community
health promotion may require investments in
training and support.
Beyond the required investments in consultant
services, practice transformation can disrupt a
practice’s operations, reducing productivity and
cash flow for as much as four to six months.
4. Getting Paid for a Medical Home
The Issue: A given practice generally serves
patients covered by a number of different payers. It
is a major challenge to primary care providers to
support the medical home model—transforming
care and care processes for all patients—when only
a portion of the payers recognize and pay for the
added costs and value of the medical home.
The new work of a PCMH entails new costs,
many of which are not recognized or paid for
under traditional fee-for-service payment
systems.
The coverage and payment for PCMHs in New
York State is quite variable. Many payers in New
York are experimenting with new payment
methods that recognize and pay differently for
the medical home model, but few have made
such payments routine.
In multipayer demonstrations now under way in
the Adirondacks, the Capital Region, and
15. Hudson Valley, all participating primary care
practices receive specific payments from all
participating payers (including Medicare) to
cover the added costs of the medical home
model. Elsewhere in the state, however, the
extent of payment for medical homes varies
widely, with some payers paying different
providers one way, while other purchasers and
payers pay differently or not at all.
5. Changing Payment Methods
The Issue: There is growing consensus that the
medical home is worth paying for, but less
agreement about how best to do so. Payment
approaches vary. Many payers who are paying for
medical homes use a per-member, per-month
(PMPM) care management fee, often combined
with a pay-for-performance arrangement. Given
the continuing evolution in the model and
payment systems, consistency may not be easy to
achieve.
In New York State, as elsewhere, methods of
paying providers for care are moving away from
fee-for-service to PMPM care management
model that many payers now employ. Payers are
testing new methods, including pay-forperformance incentives to reward providers for
improved quality and patient satisfaction, riskadjusted capitation payments, gain-sharing,
risk-sharing arrangements, and, eventually,
accountable care.
PMPM payments will probably always have a
place, as an initial payment method, to help
cover a practice’s new infrastructure and added
costs. As practices produce measurable results,
however, there is increasing support for shifting
to models that pay providers based on the
outcomes they achieve.
6. Targeting vs. Transformation
The Issue: Most of the medical home’s near-term
return on investment (ROI) derives from providing
better care to high-cost patients; but improving
care for all patients served by a practice (including
those not yet high-cost but at risk of becoming so),
may have a greater long-term return. This leaves
providers and payers with a conundrum: should
efforts be focused more narrowly on the high-cost
population, which could yield demonstrable nearterm ROI; or on a model that improves care for all
patients, reducing future spending, but diluting
near-term ROI by spreading those savings over a
larger population?
Most studies of the medical home have shown
that it improves quality and patient experience;
many studies have shown its potential to reduce
utilization and lower the total costs of care.13
Much of the model’s ROI, however, comes from
the medical home’s ability to reduce preventable
utilization of hospitals and emergency
departments by a small cohort of high-cost
patients who have multiple chronic illnesses.
Targeting interventions to improve the care of
high-cost patients can achieve substantial shortterm results. However, by focusing on improving
access, quality, coordination of care, prevention,
and wellness of entire populations the medical
home has the potential to save as much or more.
Advancing Patient-Centered Medical Homes in New York
9
16. III. The Provider Perspective
Primary care providers implementing the
medical home model are changing their care
model, investing in new capacities and new staff,
thereby increasing their operating costs. These
innovations are not supported well by the feefor-service payment system; they require changes
in the way providers are paid. As payers expand
their support for medical homes, each naturally
tends to do so in its own way. This variability can
create problems for the medical home providers.
Some of the key issues facing providers—what
they need from payers—are described below.
Paying for the Medical Home:
Some Principles
new care model, threaten a medical home’s
financial viability.
3. Fair payment: Providers need payers to pay
them fairly for the care they provide. Payments
should be adjusted to reflect the range of
services they provide, and the mix of patients for
whom a given provider or practice is caring.
4. Outcomes-based payments: While PMPM
payments are a comparatively simple and
reasonable way to pay for a medical home during
its start-up phase, that method needs to evolve
to paying for outcomes—performance compared
to benchmarks—and eventually to shared
savings.
1. Agreement on a model, with the ability to
evolve, over time: To date, NCQA recognition
has been used by both providers and payers as
the standard for medical homes in New York.
This gives providers a description of the
capacities and behaviors that they need to put in
place; and it gives payers a legitimate way to
identify specific providers eligible for augmented
payments. NCQA’s standards are evolving, and
providers are identifying and including other
value-added capacities that will enable medical
homes to achieve increased impact.
Providers and payers need to agree on criteria for
medical homes (some, like New York’s proposed
APC model, are using tiered payments that
reflect different capabilities), and on a way for
those models to evolve over time.
United Hospital Fund
Medical home providers generally serve patients
from different payers that often use different
approaches in dealing with some key issues.
Achieving multipayer alignment in these areas is
a priority for medical home providers.
2. Full participation: Providers operating
medical homes need most, if not all, of the payers
whose members they serve to participate, paying
differently for the care their members receive at
those practices. Free riders, purchasers and
payers who do not participate in supporting this
10
5. Consistent payment methods: It would be
ideal, from a provider’s perspective, if all payers
used the same payment methods, but perfect
consistency is not likely to be achievable in the
near term. More commonality among those
approaches to paying for medical homes,
however, could decrease the administrative
complexity facing providers in implementing the
medical home model.
1. Attribution: Fundamental to the medical
home concept is the ability to “assign” patients to
providers, in order to be able to hold providers
accountable for the care of those patients, and to
pay them for that care. Payers often use different
methods to “attribute” their members to a
Where Multipayer Alignment
Is Needed
17. primary care provider, using different statistical
techniques. A common approach is needed.
payers to produce composite practice-level
profiles.
2. Claims data: Medical home providers are
accepting responsibility for the health and costs
of care for their covered populations. They need
timely, accurate claims data to enable them to
understand their patients’ utilization patterns,
identify patients with “gaps in care,” and identify
high-risk populations in need of care
management.
3. Measures: Different payers often use different
metrics to measure a medical home’s
performance on quality and patient experience,
utilization and cost, and they reward a practice if
its performance equals or exceeds some
specified standard or benchmark. Using different
measures and benchmarks increases the
complexity of medical home payment
arrangements. Agreement among payers and
providers on a specific and consistent set of
“core” measures would greatly reduce this
problem.
Common formats would be helpful, as would the
capacity to generate aggregated data across
IV. The Payer Perspective
Payers are in a competitive business. They need
to maintain—and, where possible, increase—
their market share and bottom lines, often
operating in two different lines of business:
• They design, sell, and manage health
insurance products, in which they bear the
insurance risk for enrolled populations.
• They provide “administrative services only”
(ASO) to self-insured employers and union
health benefits funds, acting as a third-party
administrator to help structure benefits, put
together provider networks, negotiate rates,
and pay providers for care.
To succeed in either business line, payers must
have evidence of demonstrable value—a
function of quality, patient experience, and costs,
with the most important single variable being
premium cost.
In theory, medical homes should add value to a
payer’s provider network by improving quality
and reducing cost. However, it is not clear what
data will prove the model’s value—for which
patients, over what period of time, and for which
enhanced services. Furthermore, it may not be
easy to convince self-insured purchasers to pay
more for primary care when they feel they are
already paying too much for health care.
What Payers Need From
Providers
1. A model that works: Fundamentally, payers
want results. They are willing to pay more for
care in high-performing primary care practices,
which can produce higher quality, increase
patient satisfaction, and reduce costs; they are
less interested in paying more for practices that
may have received NCQA recognition but have
not improved their performance or reduced their
overall costs.
As noted, the NCQA’s standards are evolving,
and providers are identifying other value-added
capacities that will enable more advanced
models of medical homes to achieve increased
impact. Providers and payers need to agree on
criteria for medical homes (perhaps using
payment tiers that reflect different capabilities),
and on a way for those models to evolve over
time.
Advancing Patient-Centered Medical Homes in New York
11
18. 2. Amplitude: Payers want as many of their
members as possible to receive their care in
provider networks that efficiently produce
quality care. This means that they need sufficient
availability of a medical home model in
communities they serve, to care for a majority of
their members. Insufficient penetration of the
medical home model in a given provider
community means that those members will be
more likely to receive their care in lowerperforming practices.
3. Participation by payers and purchasers: If a
primary care practice serves a large number of a
given payer’s members, that payer has
considerable weight with the practice and can
influence it. Conversely, if many of a payer’s
members receive their primary care in practices
where it represents a smaller proportion of the
practice’s panel, it will have less influence on
that practice. If only a few other payers in that
market are paying for the medical home model,
or if most are still using fee-for-service schemes,
the impact of any one payer’s medical home
payments and incentives on a practice will be
diminished.
To achieve community-wide penetration of the
medical home model, most if not all payers must
participate in paying for the medical home
model, with as few free riders as possible.
4. A high-performing delivery system: As the
delivery system moves toward accountable care,
payers are adopting new ways to pay for the care
needed by their members, in new models
focused on improving quality and accepting
performance-based risk for managing population
health. Medical homes that perform well
represent the foundation of such a system.
The Challenge of Multipayer
Alignment
1. Differentiation: Payers need to be able to
differentiate their products and networks from
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their competitors. They must also be able to
demonstrate value— high quality, excellent
patient experience, and costs of care— at an
affordable premium. A multipayer effort, in
which all payers offer (and pay for) medical
homes, reduces the payers’ ability to use the
medical home as a point of competitive
differentiation.
2. Different approaches and measures: Most
payers who are paying for medical homes have
invested in development of—and are to varying
degrees committed to—their own methods for
patient attribution, and measures of quality and
patient satisfaction. Achieving multipayer
consensus or alignment on a single method for
patient attribution, or on core measures of
quality or patient satisfaction is a significant
challenge.
In addition, many payers operate in a number of
different markets, offering insurance and ASO
services in different regions of the state, often in
different states, across the nation. In these
cases, the underlying approaches and systems
may have been established at a corporate level,
and are not easily aligned with common
processes or measures in different regions or
even for New York State as a whole.
3. Evolving payment methods: Most payers
offering medical home payments have adapted
their claims payment systems, developing
different methods to pay medical homes (e.g.,
risk-adjusted primary care capitation, different
mixes of PMPM, pay-for-performance, and gainsharing or risk-sharing models), and those
methods are changing. Payers have invested in
these systems and in many cases are committed
to preserving them. Changing to a common
system will not be without costs to the payers.
It is not clear whether achieving a unified
approach to paying for medical homes is an
absolute requirement for providers; but if so, it
may not be easy to achieve.
19. V. What Consumers and Purchasers Want
Most of the focus on the medical home model to
date has come from providers and payers—
essentially, the supply side. Ultimately, however,
the success (or failure) of the medical home
model will depend on its attractiveness to
consumers and purchasers.
In general, consumers and purchasers want
primary care that is accessible, affordable,
convenient, high-quality, and safe—and that is
delivered by a primary care provider with whom
they have a relationship, who knows and cares
about them. Increasingly, consumers also want
providers to involve them in treatment decisions
and provide training and support that enables
them to participate more effectively in their own
care. In theory, the evolving medical home model
will be able to meet or exceed these consumer
expectations over time.
Purchasers and employers are being asked to pay
more for primary care delivered using the
medical home model because it promises to:
• improve quality, patient experience, and
employee/member health;
• decrease absenteeism; and
• reduce their total costs of care.
Before they do so, purchasers need to
understand the model, and have clear and
compelling evidence that it works, and can
improve quality and reduce health care costs.
They also need their employees and members to
understand and appreciate the model’s value,
and to want it as a service model and health
insurance benefit.
Summary
New York State has been a national leader in
supporting the adoption of the medical home
model in primary care; but its growth trajectory
is at an inflection point. Adoption by providers
with scale—group practices, independent
practice associations, hospitals, and health
centers—has been impressive and accounts for
most of the PCMH penetration to date.
However, considerable effort will be required to
transform those practices that have not yet
become PCMHs.
Small and medium-size practices have shown
the least penetration of the medical home
model, and they often lack the scale and
infrastructure necessary to do so. In the absence
of up-front investments to effect practice
transformation and more consistent payment for
medical homes, it is not clear that these small
practices—often an important source of care for
New Yorkers—will be able to become PCMHs.
The medical home model has great promise; but
to bring that model of care to scale in New York
State will require additional effort over the
coming years. Providers and payers must be able
to understand each others’ perspectives and
needs, and be prepared to work together to
resolve the challenges they face. Innovation in
health care delivery requires a parallel innovation
in payment.
This paper is an effort to articulate some (clearly
not all) of the issues that must be addressed, and
to note what providers and payers need from
each other in order to accomplish what both
want: a higher-performing primary care system as
the foundation for a better-performing health
care delivery system.
Advancing Patient-Centered Medical Homes in New York
13
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