JANUARY 5, 2012

Welcome to the Pay for Performance Update eNewsletter
This issue sponsored by the Pay for Performance Summit

The National Pay-for-Performance Summit Takes Place in Los Angeles this March
The National Pay-for-Performance Summit taking place this upcoming March 19-21 in Los Angeles will be bringing together experts from around the United States to discuss the challenges and opportunities facing the payment model in 2012. The event brochure is now available. (Healthcare Update News Service - 2012)

The Complexity of Measuring Clinical Complexity - A Guide to Pay-for-Performance
Measuring patient complexity in the ambulatory care setting has significant implications for patients, physicians, insurers, and policymakers and, consequently, is the subject of vigorous debate. Measures that account for clinical complexity are also necessary in the coming era of pay-for-performance, because standard quality measures are often developed in study populations that exclude complex patients. (Annals of Internal Medicine - December 20, 2011)

Michigan Healthcare Companies Create Performance-Based Payment System
Blue Cross Blue Shield of Michigan has formed a partnership with St. John Health System to implement a new performance-based reimbursement program. The goal of this innovative partnership is to improve patient care while reducing healthcare costs. The five hospitals in the St. John Providence health System serve the southeast Michigan area. (topsecretwriters.com - December 28, 2011)

Health Insurers Hindered by Outdated IT, May Have Deleterious Effect on Performance Based Payment Models
When asked to name which new payment models their organization plans to support or participate in over the next three years, 54% of health care payers surveyed said accountable care organizations (ACOs) and nearly 51% said pay-for-performance. A slim majority also cited unspecified other new payment models. However, most payer organizations do not have the IT to support such initiatives right now, with the exception of pay-for-performance efforts. Notably, just 37% said they are ready to support ACOs from a technology standpoint today, and 35% said the same about value-based benefit designs. (InformationWeek - December 27, 2011)

St. John Providence Signs Performance-Based Contract Addendum with Blue Cross that Beaumont Hasn't
Warren-based St. John Providence Health System has signed a performance-based addendum to its reimbursement contract with Blue Cross Blue Shield of Michigan -- the first of its kind in Michigan. The three-year agreement with St. John, which begins Jan. 1, is an addendum to its five-year reimbursement contract, which expires June 30, 2013. (Crains Detroit Business - December 15, 2011)

HealthEdge Research Shows Majority of Healthcare Payor Organizations Plan to Support New Healthcare Business Models in the Next Three Years
The results of the HealthEdge survey showed that while many payor organizations intend to participate in new healthcare business models including value-based plans, pay-for-performance and Accountable Care Organizations (ACOs), most do not have the technology in place that will be required to realize this goal. The study also revealed some of the most significant obstacles that payors face with regard to their current IT systems. These include numerous challenges related to the adoption of new standards and regulations, high rates of manual processing, out-of-control administrative costs and difficulty providing real-time access to critical business data. (MarketWatch - December 14, 2011)

New Accountable Care Model Could Save $1.1B
The new Pioneer Accountable Care Organization initiative set to launch in January in 32 healthcare organizations across the country could save up to $1.1 billion over five years, said the Centers for Medicare & Medicaid Services (CMS). According to HHS, the Pioneer ACO initiative will test the effectiveness of several innovative payment models as a way to help experienced organizations provide better care for beneficiaries, work in coordination with private payers, and reduce Medicare cost growth. These goals will be achieved as health organizations move away from a payment system based on volume under the fee-for-service model toward a system based on a pay-for-performance model of care. (InformationWeek - December 29, 2011)

Cigna Launches ACO with Partners In Care in New Jersey in Bid to Promote Pay-for Performance
In this new scheme, Cigna will pay physicians as usual for the medical services they provide. Partners In Care will also pay the physicians for the care coordination services they provide on the patient's behalf. Additionally, physicians may be rewarded through a 'pay-for-performance' structure if they meet targets for improving quality and lowering medical costs. (Healthcare Finance News - December 22, 2011)

Medicare Care Claims Data Available To Employers Under CMS Final Rule
On December 7, 2011, the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) published a final rule that would give employers and consumers access to certain Medicare data they could use to evaluate the performance of physicians and hospitals. Although a Qualified Entity can only use the Medicare data and derivative data to create the performance reports, the public report results can be used by anyone, including Qualified Entities, for pay-for-performance and other initiatives. (Mondaq - December 23, 2011)

The AMA Pay-for-Performance Practice Management Center
The AMA has closely examined the PFP programs used by some of the major national payers, including the Centers for Medicare and Medicaid Services' (CMS) Physician Quality Reporting Systems (formerly Physician Quality Reporting Initiative) and measured each of these programs' compliance with the AMA's Principles and Guidelines.

The National Pay for Performance Summit
The theme of the 2012 National Pay for Performance Summit is "Value Based" Pay for Performance, which focuses on the evolution of P4P from purely quality-based incentive payments to the integration of cost and quality in performance payment initiatives.

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Keynote Address: ACO Criteria and Performance Measurement

Margaret O'Kane
National Committee for Quality Assurance, Washington, DC