The typical primary care physician has a patient base that consumes $10 million of health care a year. Yet the PCP receives only 6%-7% of those payments, with the rest of the costs resulting largely from the PCP’s referrals or lack of PCP care management of that patient.
The average PCP makes 1,000 referrals a year. Often, the referee specialist or facility not only does not coordinate with the PCP’s patient-centered medical home, they make their own downstream referrals.
One study showed that the typical PCP orthopedic referrals for a year resulted in 74 downstream office visits, 21 office procedures, 3.3 inpatient procedures and surgeries, 59 in-office diagnostics, 9.9 outpatient procedures and surgeries, 12 referrals for diagnostics, and 7 referrals to other specialists. The end result: 186.2 chargeable events.
A revolution in your compensation is underway. Under MACRA and other accountable care models, providers across the continuum of care are now being held responsible for the overall costs of those patients, not just their charges.
This is still hard to grasp, isn’t it? I was recently talking to a preeminent primary care physician who was an active member of an accountable care organization board of directors. I was fairly excited about the new impact this highly professional community leader could have on patients, now that he was in the PCP-driven ACO, not to mention his shared savings payment opportunities.
I was on a roll until he said, “But Bo, I’m already as efficient in treating patients as I can get.” He was still fighting the barriers you all face to do the best he could under the circumstances for the patients in his office each day.
Later, however, on a better day for me, we were working together on a cardiac care white paper. The physician leader told me, “I get it now – the biggest value-adding impact I might have is for the patient I don’t ever see.”
The above statistics show just what an opportunity you have in the new value care.
You can legally control referrals and patient care coordination with specialists. They don’t have to be in your ACO. You don’t even need to be in an ACO to take advantage of high-value referrals under the Medicare Merit-based Incentive Payment System (MIPS) program under MACRA. But how?
Let’s start by assuming the specialist you need to refer to is not in your ACO. You might be able to do this without an ACO, but it’s hard to get the critical mass of primary care physicians. If you’re under the Medicare Shared Savings Program or Next Gen initiative, there are important Stark Law and antikickback liability waivers that would benefit you by being in an ACO.
Otherwise, you should consider a high-value referral affiliation agreement.
If a critical mass of primary care physicians can access data that create a short list of high-value specialists, they can put them on the high-value specialist list. Specialists do not need to get part of the shared savings pool or other financial incentives – just referrals because of their high-quality and high-efficiency care. A superstar specialist or acute care or post–acute care facility may ultimately be invited into the ACO as a full participant.
The specialist/facility basically agrees to coordinate all care with the medical home and comanage that care with you. The agreement specifies that they will observe the care protocols of the ACO for that disease state. The provider will share data and agree to be monitored.
What is a high-value specialist/facility? The current common approach is to look at the insurance companies’ top tiers, but they are often too weighted to allowed charges. It’s really about being care coordinators and about readmission and complication rates.
For example, some bundled-payment specialists are selected solely based on the surgeons’ and anesthesiologists’ complication rates. If fees are mentioned at all, they are well down the list.
Of course, if the specialist is in the ACO with the primary care physician, this can be done internally.
How do you find value-added protocols involving specialists? I was lucky to be on a multiyear grant program whereby I worked with many primary care physicians and specialists to create white papers setting out high-value, practical initiatives. There are also guides for internists and family physicians. A condition of the grant was that they all can be accessed free of charge; they’re available at.
This is a new day. Primary care is being asked to lead health care delivery today and be paid to do it. You are being rewarded or punished financially now based on the overall costs of your patients. You must have specialists and facilities coordinate with you in this new health care model. We have attempted to provide a road map to assist you on your journey.
Mr. Bobbitt is head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at [email protected] or 919-821-6612.