Fifteen primary care practices worked together to achieve national certification as patient-centered medical homes-and were compensated with pay-for-performance bonuses.

A regional initiative has created patient-centered medical homes for nearly half a million New York state residents. The not-for-profit Taconic Health Information Network and Community (THINC) convened payers, providers, and the community in a patient-centered medical home initiative across the Hudson Valley, N.Y. region.

Fifteen primary care practices spent a year transforming their care delivery approaches to obtain medical home recognition from the National Committee for Quality Assurance (NCQA). The work was managed in collaboration with the Taconic IPA (TIPA), a 4,000-member physician leadership organization.

To help fund the transformation, THINC got six health plans to agree to pay the participating practices a pay-for-performance bonus for achieving NCQA medical home recognition. The health plans-Aetna, CDPHP, Hudson Health Plan, MVP Health Care, UnitedHealthcare, and Empire BlueCross Blue Shield-represent about 65 percent of the commercial insurance market in the Hudson Valley, and 43 percent of Medicaid managed care.

Project Overview

Planning for the pay-for-performance PCMH project began in 2006 and took more than two years. THINC managed the overall project, beginning with coordinating the payers and providing a community framework for consensus building and decision making.

The six payers and IBM, the region's largest employer, supported the project with incentive payments to help practices offset the transformation's startup costs. The practices provided the necessary staff and resources for the transformation.

Participating practices were recruited based on their commitment to quality improvement and their robust use of health IT. The project deliberately united solo practitioners and several small practices with large practices with dozens of physicians.

The transformation for the first 11 practices occurred over a 10-month period in 2009 and the remaining four practices finished their transformation in 2010. Completing the health plan data contracts and acquiring the data began in 2009, taking 19 months. Incentive payments were distributed in 2010.

Physicians Take a Team Approach

A work plan was created for each practice, and medical home coaches and practice leads met every two to three weeks. The leadership of the selected practices formed the TIPA Medical Council and met monthly to collaborate, share best practices, and facilitate solutions. The practices then submitted their data for NCQA approval. All the practices achieved Level 3 NCQA recognition, the highest level possible.

The TIPA Medical Council assisted with all aspects of the transformation. It provided an opportunity for competing physicians to work in partnership toward a common goal. Private practices learned from safety net providers, and the larger practices learned from the smaller.

That team spirit characterized not only the TIPA Medical Council, but operations within each practice. Each physician made changes to become more "team-like." For example, most did morning huddles to prepare for patient visits in advance.

Three Keys to a Successful PCMH

The project showed that physician practices of all sizes and types can become PCMHs, but to be successful, practices must keep in mind the following three key points.

It demands substantial, intense work in reconceiving the practice and in completing the NCQA requirements. Larger practices need the support of senior management, including the administrator and financial executive.

It demands fiscal stability. The payer incentives were essential, but a practice should be fiscally sound before embarking on the medical home process. Practices incur significant upfront costs, and incentive payments often arrive much later.

Transformation requires sweat equity. Practices not only needed to meet NCQA PCMH standards regarding population health, managing referrals, working as a team, creating access for patients, and other elements; they also had to negotiate the NCQA application process.

Next Stages

The newly transformed medical homes in the Hudson Valley are now working to enhance quality and utilization through improved care coordination-with technical expertise and support from Geisinger Health System. Geisinger's ProvenHealth Navigator program will be tailored to meet the specific needs of the Hudson Valley. The program will start with a small pilot at several sites with the ultimate goal of rolling out to medical home-recognized primary care providers across the community.

THINC is also talking with the participating health plans about another round of incentive payments to the participating physicians-based on achievement of specific quality and utilization targets.

This article is excerpted from the following resources:

Mau, S., Quality-Driven, Evidence-Based, Patient-Centered: Hudson Valley's Medical Home Transformation Offers a Glimpse of What's Possible, Hudson Valley Initiative, August 2010.

Health Plans Pay MD Practices Incentive Bonuses for Converting to Medical Homes, HFMA's Payment & Reimbursement Forum, May 24, 2011. (Subscription required for access. Learn more and subscribe.)


Publication Date: Tuesday, January 24, 2012