by Dave Chase
Ron E. Peck, Esq. is senior vice president and general counsel and Adam V. Russo, Esq. is the cofounder and chief executive officer of The Phia Group, an organization dedicated to empowering health plans’ ability to maximize benefits while minimizing costs.
What to look for in a TPA
Is the TPA able to drive you value? This can be in the following forms.
•Value-based contracting
•Integration with local primary care practices
•Chronic care management and reporting
•Cost and quality transparency
•Seamless integration and promotion of third-party solutions like telehealth or second opinions
•Flexibility in customer communication (phone only between 8am and 5pm? Or text, email, chat anytime?)
Will the TPA be able to smoothly accommodate you as a new client? One clue is the size of your company relative to the TPA’s other clients.
What is the TPA’s performance track record on things like turn-around time for claims processing (seven to 10 business days is average) and accuracy (look for a percentage in the upper 90s)? Reputation in the stop-loss market is a good indicator.
What do their turnover rate, past performance evaluations, reference checks, feedback from dissatisfied clients, and pending litigation tell you about the performance of individual staff who will administer your program?
Is the TPA’s technology sophisticated enough to account for and appropriately allocate the cost of benefits, provide a superior customer experience, evaluate the cost of the various benefits being offered, and the efficiencies of providers? (In many cases, the answer is no.)
Does the TPA have a strong relationship with a stop-loss carrier that might help sway excess coverage reimbursements in your favor?
Is the TPA able to meet the competing demands of federal privacy rules and Department of Labor claims procedures rules that accelerate the decision-making process? Can it meet HIPAA’s standardization requirements for electronic codes and formats?
Is the TPA prepared in terms of technological capabilities and capital resources to operate in the ever-more demanding compliance environment?
Part IV
Health Rosetta
This is the how-to portion of the book. The Health Rosetta blueprint represents the work of the best minds in health benefits and the employers that have had many years of sustained success following their lead. This section lets you contrast what your current benefits plans with proven best-practice approaches. The Health Rosetta evolves nearly every day as evidence and ideas are shared in this open source community. Like the Rosetta Stone, the Health Rosetta is the path to deciphering health care’s hieroglyphics.
For example, every employer who has slayed the health care cost beast has recognized the importance of proper primary care. Sadly, most Americans experience a badly undermined primary care model that is largely a referral machine to costly and often unnecessary treatments.
A very small portion of your employees in a given year account for a large percentage of your health care spending. It’s not uncommon for 6 percent of your employees to account for 80 percent of your spending. Unfortunately, up to 50 percent of these high cost and complex cases are riddled with misdiagnoses and inappropriate treatment, which inevitably lead to worse outcomes and higher costs.
We wrap up with a checklist of necessary elements to include in an ERISA health plan that will protect and empower your organization.
Chapter 14
Value-based Primary Care
What is Value-based Primary Care?
Value-based primary care (VBPC) is an umbrella term that includes various delivery models that involve direct financial relationships between individuals or employers and primary care practitioners (PCPs) outside of the traditional fee-for-service insurance model, though your plan administrator may manage the value-based contract rather than you directly. Value-based primary care offers patients, physicians, and purchasers an alternative to traditional fee-for-service (FFS) payment arrangements, in which physicians are reimbursed according to the volume of services they provide regardless of quality. VBPC has matured as health care purchasing shifts from volume to value payment models.
Value is defined as the ratio of quality to cost. Value increases as the quality of the care increases or the cost of care decreases.
In the United States, there are two primary models for VBPC, though this space is evolving rapidly with much more differentiation emerging.
•Direct primary care (DPC), in which care is offered directly to individuals, plan administrators, and employer in a range of practice models from solo practitioners to national organizations
•Onsite/near-site clinics fully or partially dedicated to the workforce of a specific employer
How Does It Work?
Providers of VBPC typically charge a monthly, quarterly, or annual membership fee, which covers all or most primary care services including acute and preventive care. The fee is paid out of an individual’s own pocket, by a sponsoring organization such as an employer or union, or by a health plan offering commercial or government programs, such as a Medicare Advantage plan. Most commonly, the practice has been devoted to the particular sponsoring entity (e.g., a near-site clinic for employers/unions or a Medicare Advantage-based clinic devoted to seniors), but models that serve multiple clients are maturing.
The flawed incentive structure of FFS demands very short primary care appointments, which often drive referrals to unnecessary high-margin services such as scans and specialists and result in an overreliance on prescriptions. The reduced overhead from eliminating FFS billing also allows VBPC practices to offer a more proactive care model that can lead to significant reductions in downstream costs.
Why Should You Support It?
VBPC aligns your interests with primary care providers, which can improve health outcomes and significantly lower costs for your employees and members. Health outcomes are improved by shifting the focus from reactive, episodic care to a continuous care relationship, population health strategies such as preventive and chronic care, optimizing specialty care referral channels, and care management.
The VBPC model also delivers a substantially better experience for patients, often in one or more of the following ways.
•More time with their provider
•Same day appointments
•Short or no wait times in the office
•Better technology, e.g., email, texting, video chats, and other digital-based interactions
•24/7 coverage by a professional with access to their electronic health record
•Far more coordinated care
VBPC also improves provider experience and professional satisfaction, which, in turn, is known to improve the quality of care.
What Are the Key Elements to Look For in a VBPC Provider?
1. Quality Reporting
Clinical quality measures (e.g., What percentage of patients were vaccinated in line with standard schedules? Required hospitalization? Received domestic violence screening?) are reported in appropriate detail to:
•The individual patient
•The purchaser
•A community health information exchange (HIE), where available
2. Shared Decision-making
PCPs use established communication techniques to ensure patients are educated and engaged in making decisions about their own care, being respectful of preferences, ethics, and economic concerns. Coordinating efforts with employers and health plans, PCPs make understandable and validate health information about patient conditions, rights, and available options.
3. Care Coordination
PCPs actively coordinate care with specialists and ancillary providers, ensuring post-hospital and post-surgical follow-up. Care coordination should not be predicated or dependent on all providers sharing a common electronic health record (EHR). Employers and plans should exert leverage on all nonconnected providers to share information via an HIE.
/> 4. Population Health Management
Management of chronic conditions is proactive, aggressive, and team-based, using patient advocates, care manager nurses, and personal health assistants/coaches. Care is facilitated through the use of patient registries, either embedded in the EHR or through collaboration with the HIE.
Preventive services include evidence-based screenings (specifically excluding those known to be harmful or of questionable value) and active pursuit of both childhood and adult vaccinations according to current recommendations from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.
5. Value-based Payment Models
Compensation models reward physicians on a nonvolume basis, such as straight salary, per member per month fees, or the overall number of patients for which they are responsible. Purchasers should look for a portion of VBPC provider compensation being dependent on value, as determined by some combination of quality metrics, patient experience scores, and resource stewardship. The general nature of the compensation model should be transparent to help inform the purchaser’s selection of providers.
6. Patient Experience
Standard methods are used to measure patient experience and engagement. Patient advisory panels are incorporated in the practice to offer guidance about service functions and assure a patient-centered orientation. Purchasers should expect to see aggregated experience scores as one measure of quality.
7. Evidence-based Medical Care
The practice is grounded in evidence-based medicine—as demonstrated to purchasers through transparency of clinical process and outcomes measures, as well as provider education and collaboration—that respects patients’ insurance coverage or financial status, personal preferences, and ethics.
8. Participation in a Health Information Exchange (HIE)
The practice shares data with specialists, other providers including hospitals, and other relevant parties through participation in an HIE as a regular part of care that is incorporated into appropriate workflows.
9. Ease of Access to Care and Care Information
A patient portal is available to access personal health records and facilitate asynchronous communication between patients and providers. A patient is not expected to make an office visit unless physical presence is necessary for quality of care. The practice collects data on standard access metrics and shares them with a patient advisory panel and the health care purchaser, and provides complaint resolution and follow-up. Patients have 24/7 telephone access to a health care professional with immediate access to the patient’s EHR and a physician or advanced practitioner backup, thus reducing unnecessary ER use.
10. Clinical Pharmacy and Mental Health Embedded within Practice
The practice provides clinical pharmacy support for patients with complicated drug regimens and those requiring additional support for drug-related concerns, including resources to help patients unable to afford prescribed pharmaceutical treatments. Mental health services for common issues (typically depression and anxiety) that can be managed on an ambulatory basis are readily and conveniently available through the primary care office.
11. Physician Loyalty
At all times and in all matters, including testing, referrals, hospitalizations, and all care outside the office, the physician and other providers in the PCP practice align with the patient’s care interests and personal economics. Physicians strive to deliver the highest quality at the most reasonable cost and put patient interests above others.
What Challenges Can You Expect?
1. Administrative Challenges
Your broker, consultant, carrier, or TPA may be unable or unwilling to help you evaluate the appropriateness of VBPC for your health plan.
2. Employee Education
Employees in established primary care practices may be unwilling to switch to one using a VBPC model—at least initially. Inertia, comfort with current providers, and lack of awareness of their current care quality are all impediments. Being able to demonstrate both financial and nonfinancial benefits to them is key, as is making clear that they are not being forced to see a “company doctor.” The need for frequent, clear communication with employees and dependents can’t be overemphasized.
3. Care Dislocation
Having large numbers of people switch primary care physicians can be challenging, especially when physicians in the receiving practice may be overwhelmed by the sudden increase in a short period. Talk with the new physicians to understand their capacity and access issues. Don’t wait to for your employees and their families to complain.
4. Criteria for Choosing a Practice
Practices may market themselves as low-cost providers, but primary care should never be purchased solely on cost. Expect to spend more on high-quality primary care in return for downstream savings and other benefits (e.g., increased productivity and employee satisfaction) that will more than cover the increased costs. Choose primary care based on patient service, demonstrated clinical quality metrics, and demonstrated attention to stewardship of your dollar.
5. Care Coordination
Current providers and health systems may warn that VBPC encourages care fragmentation and loss of coordination, no longer a tenable argument in today’s digital age. Insist on the adoption of a health information exchange and other technology to overcome this barrier.
6. Slow Migration to the New VBPC Model
People are much more willing to change PCPs when they get to meet the doctor beforehand. If possible, arrange for your new PCPs to visit with employees at your workplace. Also, arrange tours of the new practice location. Employers willing to provide strong incentives to try out the new primary care model will achieve much higher adoption rates.
7) Obfuscation to Preserve Status Quo
Physicians who aren’t forward-looking may fall back on “fear, uncertainty, and doubt” tactics meant to freeze progress. As stewards of your organizations’ and employees’ hard-earned money, you must choose whether to protect your own bottom line or that of your vendor.
What Action Steps Can You Take?
Ask your broker, consultant, insurance carrier, or TPA if they are currently working with or have experience with VBPC practices.
Encourage your broker, consultant, carrier, or TPA to find, interpret, and share reliable cost and quality data from primary care groups competing for your business.
Consider comparing primary care groups through a structured and disciplined RFP process. Also consider modifying your benefits plan to provide incentives for employees and their families to try a VBPC practice.
Visit a local VBPC practice and see for yourself.
Additional Resources
Please visit healthrosetta.org/health-rosetta for ongoing updates, including lists of value-based primary care organizations, case studies, best practices, toolkits, and more.
Chapter 15
Transparent Medical Markets
What is a Transparent Medical Market?
A transparent medical market (TMM) offers purchasers such as employers and unions fair and fully transparent pricing for medical services/procedures ranging from specific treatments (e.g., knee replacement or colonoscopies) to specific conditions (e.g., diabetes or kidney disease). Services and procedures are typically bundled, meaning there is just one bill for all the services received for a specific treatment or condition that includes multiple providers and sometimes multiple settings. Another dimension of transparency is that the market is open to any provider who has sufficiently high-quality indicators and charges fair prices.
A TMM offers employers an alternative to traditional fee-for-service (FFS) payment models, in which individual services are listed on itemized billing statements from multiple sources.
How Does It Work?
Providers (typically independent imaging centers, specialty hospitals, and ambulatory surgery centers) supply up-front pricing at significantly reduced rates in exchange for increased volume, quick
pay, reduced friction, and avoiding claims/collections problems—all factors that allow providers to charge greatly reduced prices while netting a similar amount to standard insurance billing.
Providers contract directly with an employer or third party to offer services outside of a typical payment and network structure. In exchange for significantly reduced rates, employers encourage plan members to use these providers, typically by waiving all of the individual’s costs including copays, coinsurance, and deductibles.
Why Should You Support It?
Unlike FFS, which allows for wildly variable, opaque pricing free from market forces and that can incentivize providers to offer unnecessary services, TMM benefits providers, employers, and employees. Providers get access to individuals whose employers offer quick pay and reduced hassles, while employers get access to bundled, transparent rates at prices typically 30 to 50 percent lower than typical network discount prices (and even more off of chargemaster prices). Employees get access to a new benefit that offers medical services and procedures without financial penalties in the form of copays and deductibles. In short, providers get easier administration and certainty, employers get great prices, and patients get the care they need at no additional cost.
What Are the Key Elements to Look for?
1. Transparency
It’s not possible for employers to measure the value of their health care dollar without access to pricing and quality information. The same information is needed by employees if they are expected to seek high-value care. At a minimum, all medical services and procedures should be available at fair, honest, and up-front prices, making health care services as straightforward as other products and services we buy. Quality information should also be readily available for employers and employees alike.
2. Bundled Payment
Bundled payment for a specific treatment allows employers to trade endless, confusing, itemized bills for just one bill covering the hospital, surgeon, anesthesia, equipment, etc. For treatment across a specific condition there is just one bill for all physician visits, diagnostics, and care management.
