2014 Specialist Fee Uplifts Orthopedics

1. 2014 Specialist Fee UpliftsOrthopedics

2. Value Partnerships is… transforming care delivery, improving quality, reducing costs

3. FEE FOR SERVICE TO FEE FOR VALUE Physicians Hospitals Physician Group Incentive Program Pay-for-performance Collaborative Quality Initiatives Patient Centered Medical Home Designation Value-based Contracting Provider Delivered Care Management Organized Systems of Care Blue Distinction Centers Blue Distinction Total Care

4. What is the Physician Group Incentive Program? • BCBSM partners with Physician Organizations (POs) to achieve a high performing health care system in Michigan • The Physician Group Incentive Program (PGIP) is moving from a fee-for-service to a fee-for-value approach • PGIP offers rewards to: • POs to assist with infrastructure improvement and practice transformation • Practitioners through fee-for-value-based fee uplifts • Increasingly, a portion of professional reimbursement is tied to rewarding specialists for: • Supporting the Patient Centered Medical Home (PCMH) model as PCMH-Neighbors • Collaborating with their community of caregivers to optimize use, efficiency and quality in their shared patient populations

5. Physician Group Incentive Program: Catalyzing Health System Transformation in Partnership with Providers 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Launch of PGIP based on Chronic Care Model PCMH Program Organized Systems of Care (OSCs) • Building the PCMH- • Neighborhood: expand • PGIP to include all • specialists (including fee • uplifts for specialists) • Catalyze building of • Organized Systems of Care • –enable OSCs to assume • responsibility and • accountability for • managing the PCP- • attributed population of • patients across all • locations of care • OSC initiatives support • integration of PCMH • capabilities at OSC • level • Launch PCMH • Support building of PCMH • infrastructure • Launch quality/use Initiatives • Measure PO performance • across quality and use • metrics such as preventive • and evidence-based care, • preventable ED use, high • and low-tech imaging, IP • use • Include specialists involved in • chronic care • Physician Organizations have the • structure and technical expertise • to create highly functioning • systems of care • Design and execute programs in a • customized and collaborative • manner • Measure performance at the • population level and reward • improvement as well as absolute • performance: initial focus on GDR • and building patient registries David A. Share and Margaret H. Mason, Michigan’s Physician Group Incentive Program Offers A Regional Model For Incremental ‘Fee For Value’ Payment Reform. Health Affairs, 31, no.9 (2012):1993-2001.

6. PCMH-Neighbor + Organized Systems of Care (2012 - present) “BUILDING CONNECTIVITY TO IMPROVE POPULATION HEALTH” PGIP participatingPCPs Hospitals PGIP participating Specialists

7. Some PGIP “Foundations” • Physician Organizations (POs) are the “building blocks” of the program • Each primary care and specialty practitioner belongs to one PO for PGIP purposes • Some POs are divided into Sub-POs, which are used for analytic purposes • Patients are attributed to a primary care physician • The patient is attributed to the primary care physician’s PO and Sub-PO • The practice is defined by the PO and by the specialty types of the practitioners represented within the practice • Population-based metrics are calculated for practices based on sub-PO member populations

8. Specialist Fee Uplifts: Key Points • Fee uplifts are the primary method for rewarding specialists • The fee uplift program rewards specialists who actively collaborate with PCPs and their PO leadership to: • Create improved systems and care processes • Implement evidence-based care • Promote efficient and effective care • The measures BCBSM uses to select which specialists receive fee uplifts are population-based and reward specialists who serve patient populations with higher overall performance • Eligibility for fee uplifts is determined on an annual basis with an effective date of February; please reach out to your PO for more information • Fee uplift are applied only to PPO/Traditional Commercial claims

9. Specialist Fee Uplifts Goals and Principles

10. Patient Centered Medical Home – Neighbor (PCMH-N) • Recognizes the important role of specialty practices within the PCMH model • PCMH-N principles include: • Providing appropriate and timely consultations and referrals that complement and advance the aims of the PCMH practice(s) • Establishing shared responsibility for relevant types of clinical interactions • Supporting patient-centered high-quality safe care and enhanced access • Recognizing the PCMH practice as the source of the patient's primary care • Understanding that the PCMH practice has overall responsibility for coordination and integration of care provided to the patient

11. Determining Which Practices Receive a Performance-Based Fee Uplift • Eligible practices must be nominated by their member PO and, if applicable, another PO • Physician organizations nominate practices based on written and publicly available criteria and founded upon Patient-Centered Medical Home-Neighbor principles • Nomination is a necessary, but not sufficient, factor in receiving the uplift • The practitioner must be signed up with PGIP by July 1 (prior to the fee uplift year) • BCBSM selected fully nominated practices based on one or more population-based metrics of cost, quality, utilization and/or efficiency • In 2014, BCBSM selected the top two-thirds of nominated, non-pediatric specialty practices plus all nominated pediatric specialty practices to receive a fee uplift

12. Population Management and Population-Level Measurement

13. “Measuring at a population level focuses on system performance, encourages system accountability and supports system improvement. Measuring at the individual practice and individual physician level is essential for focusing providers’ attention on opportunities to improve processes and outcomes of care. But, given the methodological limitations which constrain the accuracy of results, ideally it is best to hold a community of caregivers responsible for aggregate performance at a population level…” - David Share, MD, MPH SVP, Value Partnerships Testimony submitted to the House Ways and Means Committee, Health Subcommittee

14. ABC Orthopedics Practice • The total pie represents all the patients served by ABC Cardiology Practice • Each patient is attributed to the Sub-PO of their primary care physician • The slices of the pie represent the Sub-POs to which the practice’s patients are attributed • Practice ABC’s “performance score” is the weighted average of the Sub-PO level scores, not the performance of the individual practice

15. Another Way to Think About Population-Based Performance ABC Orthopedics Practice 1,000 Members 35% from Blue Sub-PO, 20% from Green Sub-PO, 45% from Red Sub-PO ($310 x 0.35)+ ($300 x 0.20)+($290 x 0.45) = PMPM: $299 350 Members 450 Members 200 Members Red Sub-PO 10,000 Total Members PMPM: $290 Blue Sub-PO 9,000 Total Members PMPM: $310 Green Sub-PO 5,000 Total Members PMPM: $300

16. Population-Based Metrics • Represent all events in a practice’s shared population(s) • Each event or patient a practice treats is a small proportion of the shared population • Include events or patients the practice did not treat • Practice’s score reflects all care delivered to everyone in their shared population(s) • Metrics and weights are specialty-specific, so a multi-specialty practice could have multiple scores • Each patient served by the practice is attributed to the PGIP Sub-PO of their primary care physician; these sub-POs represent the member populations from which practices draw their patients • BCBSM uses claims-based measures, relying on procedure and diagnosis codes, prescription data and costs

17. Orthopedics Fee Uplift Metrics - 2014

18. What Costs are Included in the Cost of Care Metric? • The metric combines the allowed amounts for both the facility and professional components of medical‐surgical and pharmacy claims • Cost of care reflects comparable patient care costs by removing the costs of charity care, bad debt and direct and indirect medical education • Cost of care reflects the overall cost for all care received by members and is not calculated separately for each specialty type

19. Your PO can provide you with this document, which describes the orthopedics metrics and the overall selection methodology

20. Orthopedics Uplift Results – 2014 Note: While the top 2/3 of fully nominated non-pediatric practices receive a fee uplift, the proportion of practitioners receiving a non-pediatric fee uplift may deviate from 2/3 because of variations in the number of practitioners per practice.

21. If You Received A Fee Uplift….. • Your practice was evaluated based primarily on population-level performance, not individual practice performance • This approach reflects the foundational PGIP principle that communities of caregivers share responsibility for populations of patients • This is a unique opportunity, but with opportunities come obligations and responsibilities • BCBSM is under extraordinary pressure from purchasers to control the spiraling cost of health care • BCBSM can sustain the specialist fee uplifts only if practitioners, in collaboration with POs and organized systems of care, continue to increase their commitment to controlling health care expenditures, improving the process and outcomes of care, making prudent and appropriate medical decisions, and demonstrating the value of the care they provide to populations of patients

22. If You Did Not Receive a Fee Uplift….. • Join a PO and become an active participant; learn their criteria for nomination • Work with your PO to identify opportunities for improvement in cost and quality • Reach out to other practitioners in the PO – particularly primary care physicians – with whom you are sharing patients to: • Share information about those patients • Identify 1-2 ways to improve the quality and cost of care for those patients • Avoid duplication of services • Improve coordination of care, such as the “hand offs” between practitioners and different settings of care • Keep in mind that the metrics used by BCBSM are for costs incurred and services rendered for populations of patients, not just your patients

24. Choosing Wisely® • Choosing Wisely® is an ABIM Foundation initiative focused on specialty-specific evidence-based recommendations around topics to help patients and physicians make wise decisions about the most appropriate care. • http://www.choosingwisely.org/doctor-patient-lists/

26. Interested in Joining PGIP? Please email providerpartnerships@bcbsm.com or your BCBSM provider consultant – found on the “Provider Contacts” page at bcbsm.com

27. Contact Us… If you have additional questions not addressed previously, please contact: Liz Dobie edobie@bcbsm.com 313-448-5848 Emily Santer esanter@bcbsm.com 313-448-5572