First posted on Disease Management Care Blog 3/11/2014

If you spend a lot of time building, administering, expanding, marketing, promoting or networking “medical homes,” it might be a good idea for you to read this MedPAC meeting transcript.

As Population Health Blog readers know, the Medicare Payment Advisory Commission advises Congress on how to best run Medicare, which includes the thorny issue of how to pay physicians who care for Medicare beneficiaries. During their March 6 meeting, the Commissioners discussed how to replace the primary care bonus program that is set to expire at the end of 2015.

By the way: The 10% bonus in 2012 amounted to $664 million for approximately 200,000 providers caring for 21 million beneficiaries.  That means, thanks to Uncle Sam, average participating docs got another $3400 in yearly income.  For PHB readers who are familiar with the per-member-per-month metric, that amounts to $2.60 PMPM.  As of 2014, there is still no hard information on whether the bonus resulted in any improvement in access, quality or outcomes.  In fact, despite the bonus, there is preliminary data that 28% of Medicare beneficiaries have had trouble finding a primary care provider.

As the PHB understands it, the bonus program was funded withadditional fee-for-service money for primary care services.  Since that’s going away at the end of next year, the Commission considered whether to continue it as is, or to reengineer it as a medical home payment system.

The transcript on whether to pay for medical homes reflects a wandering discussion with no final consensus. That being said, there were some interesting takeaways from a group of policy wonks who’ve spent a lot of time thinking about this approach to care:

Budget Neutral Bad News: While you may argue that the medical home “saves money” in excess of the fees used to pay for it, no one at MedPAC believes the additional funding will continue.  That means the $664 million after 2015 will likely have to come from budget-neutral reductions in payments for other medical services.  In zero-sum terms, that means someone (specialists?) has to lose in order for the medical home to win.

Definition: While there was admiration for the National Committee on Quality Assurance recognition program for medical homes, Commission members wondered whether that recognition translates into value. Would a “leaner” model be more cost effective?  And, if Medicare favored a non-NCQA leaner medical home structure, how would it be implemented?  It providers had to apply for it, should they subject to an audit?

Attribution: Figuring out which doc among several should be paid for medical home services isn’t easy.  There was little appetite for having beneficiaries sign an attestation, while a claims analysis would have to be done using a “look-back” based on Medicare billing patterns.  That would result in a one year payment delay.

Whither Primary Care: There was doubt that an additional income stream of $2.60 PMPM would be enough to incent medical students to shun higher paying specialty careers.

Generalizability: There was some doubt on whether the medical home works outside of integrated delivery settings.

More Bad News On The Way?: One Commissioner also works as an editor at a top tier medical journal, and he hinted that more negative manuscripts on the medical home are being submitted for publication.

What Wasn’t Said: The Population Health Blog was surprised that MedPAC did not address:

1) the concept that the medical home should be directed at a subpopulation of patients most likely to benefit (raised in this “one size does not fit all” editorial), or

2) that getting the Medicare bureaucracy to introduce a new complex payment mechanism may be far more easier said than done (and that’s according to White House insider Dr. Emanuel)