PURPOSEWe assess the financial implications for primary care practices of participating in patient-centered medical home (PCMH) funding initiatives.
METHODSWe estimated practices' changes in net revenue under 3 PCMH funding initiatives: increased fee-for-service (FFS) payments, traditional FFS with additional per-member-per-month (PMPM) payments, or traditional FFS with PMPM and pay-for-performance (P4P) payments. Net revenue estimates were based on a validated microsimulation model utilizing national practice surveys. Simulated practices reflecting the national range of practice size, location, and patient population were examined under several potential changes in clinical services: investments in patient tracking, communications, and quality improvement; increased support staff; altered visit templates to accommodate longer visits, telephone visits or electronic visits; and extended service delivery hours.
RESULTSUnder the status quo of traditional FFS payments, clinics operate near their maximum estimated possible net revenue levels, suggesting they respond strongly to existing financial incentives. Practices gained substantial additional net annual revenue per full-time physician under PMPM or PMPM plus P4P payments ($113,300 per year, 95% CI, $28,500 to $198,200) but not under increased FFS payments (-$53,500, 95% CI, -$69,700 to -$37,200), after accounting for costs of meeting PCMH funding requirements. Expanding services beyond minimum required levels decreased net revenue, because traditional FFS revenues decreased.CONCLUSIONS PCMH funding through PMPM payments could substantially improve practice finances but will not offer sufficient financial incentives to expand services beyond minimum requirements for PCMH funding. Ann Fam Med 2016;14:404-414. doi: 10.1370/afm.1960
INTRODUCTIONA s of 2014 at least 114 distinct initiatives from state, federal, and private payers funded primary care clinics to offer services as patient-centered medical homes (PCMHs)-practices delivering comprehensive care for most health problems; coordinating care among multiple clinicians; and achieving heightened standards for accessibility, quality, and safety. [1][2][3][4] These initiatives, which now involve at least 21 million patients in the United States, 4 intend to improve access and quality while delivering population-based care at lower cost. [1][2][3] To do so amidst workforce constraints, practices face challenges, including adopting process improvement techniques and electronic registries for care management, expanding care teams, offering patients longer in-person visits and access to electronic or telephone visits, and extending night and/or weekend business hours to enhance care access. 1,[5][6][7][8] According to recent national surveys, 3 major payment strategies have dominated PCMH initiatives: increased fee-for-service (FFS) payments, traditional FFS payments with additional per-member-per-month (PMPM) payments, and Sanjay Basu, MD, PhD 1,2 Russell S. Phillips, MD 2,3 Zirui Song, MD, PhD 2,4 Bru...