A million thanks for Retired Doc for posting the link to the AMA website that gave reference to the newly released recommendations of the RUC committee for the Demonstration Project for the Medical Home Model. You want my take? Here goes.
Crap In = Crap Out. If you want a more in depth opinion, keep reading. In regular government fashion, this gets very complicated, so bear with me. The recommendations come from the very committee responsible for the death of primary care. This is like asking your roofer, who put on a bad roof, to come back and fix it. Lets look at a brief run down.
The RUC Medical Home Work group was established at the February 2008 RUC Meeting following a request from CMS based on a legislative mandate resulting from the Tax Relief and Health Care Act of 2006. Section 204 of the TRHCA directs CMS to conduct a three-year demonstration project of the medical home concept of patient care. It will occur in rural, urban, and under served areas in up to eight states. CMS has designed a three-tiered system of the medical homes based entirely on the capabilities of the physician office serving as the medical home. It will not be based on the severity of the patient's illness. How will it be paid for?
It will be paid for through the RUC process, the same group that destroyed primary care. It will be "cost neutral". In other words, the extra money will be expected to come from the savings it generates. This is different from budget neutral, in that it will not take away money from other specialists/procedural codes. Of course, it isn't. This is the RUC making the recommendations. And we all know who runs the RUC. So that is no surprise. Of course, my first question is, how do you know how much money will be saved to set your fees if you haven't even had your demonstration project yet.
This work group, which met 11 times by conference call between February 12 and April 21, only met face to face once, On April 23, 2008, immediately preceding the April 2008 RUC Meeting. Based on this one meeting and 11 conference calls they have given their recommendations. A number of (faulty) assumptions have been built into their model. Here goes:
- G-Code descriptors. The RUC Work group decided that using patient characteristics would be arbitrary in assigning work values for the medical home team. As such, only one single code per tier was felt appropriate. And remember, the tier is determined by practice characteristics, not patient characteristics. Core capabilities, as determined by CMS, will determine what designation your practice gets, and therefor how much extra money. To be a Tier 1 Medical Home (entry level), you must demonstrate 10 designated core capabilities. For a Tier 2 (typical), that jumps to 16. For a Tier 3 Medical Home (optimal), your practice must demonstrate 18 designated requirements, and three of an additional ten requirements. Office capabilities will be monitored (more government paper work for more bodies to be hired) by CMS.
- Average Panel Size. Rough estimates were made using the 2004-2006 Medicare claims data and the 2000-2002 Community Tracking Study Physician Survey. The MGMA was also useful with their data. Current Medical Home models, specifically the Geisinger Health System was helpful in generating their recommendations. Final result? Each physician may have approximately 250 Medicare patients who will be eligible and who will agree to participate in the practice's medical home.
- 9.2 minutes per month per patient in physician time for a Tier 3 Medical Home. After going through a whole bunch of formulas, deducting this, adding that, this committee full of specialists, which met only 11 times by phone, came to this conclusion by using horribly faulty assumptions. How is this time spent? Twice weekly meetings for 1-2 new participants and 15 reassessments with each meeting lasting 150 minutes. That's 5 hours a week in physician time. An every morning meeting to discuss 10-15 patients. Issues are for the day are discussed, including interim progress reports and care planning and follow-up. This is expected to only take 45 minutes. HUH? WHAT? We are up to 5 hours and 45 minutes a week thus far. Next up is a nursing home review meeting. This is weekly. Medical respite at a nursing home, instead of a short stay at a hospital (are you friggen kidding me?). These meetings last up to 60 minutes to discuss 10 patients. (6 minutes to discuss a nursing home patient acting like a hospital. Are you kidding me?) We're up to 6 hours and 45 minutes a week of physician time, and now we're admitting patients to a nursing home for acute medical illness. Next up is the end-of-life nurse meeting. A weekly meeting for 30 minutes to discuss 4 patients. We're up to 7 hours and 15 minutes of physician time per week. Finally, ad-hoc family meetings occur irregularly, involving multiple staff member, and last more than 30 minutes. Expect a lot of them if you advertise as a Medical Home. So total expected time involvement for the Tier 3 Medical Home physician is 7 hours and 45 minutes a week in meetings. And that is riddled with horrible assumptions. I would double that in a heart beat. Morning meetings. 15 patients in 45 minutes? Are you kidding me? The 9.2 minutes per patient/ per month was obtained by using some voodoo math. By spending more time in meetings, they cut out some of the expected time for the actual E&M encounters, 1o minutes on a 99214 and 5 minutes on a 99213 to be exact. So let me get this straight. I have a medical home patient who comes to see me for a 99214 encounter. Am I to believe that I won't have to spend 10 minutes writing scripts, calling insurance for preauthorization , calling consults at that point of encounter because they are Medical Home patient? That assumption is faulty to begin with. Should the patient wait until next month when their review is up to get their preauthorization. "Sorry Mrs Jones. We can't call in your preauthorization at this appointment, you're meeting isn't until next month, and CMS says that we shouldn't be spending that extra 10 minutes on you after your 99214 visit." Let's round out the 7 hours and 45 minutes to 8 hours a week in physician time for meetings in the Tier 3 Medical Home Model. That's 32 hours a month, or 416 hours a year in meetings for the Tier 3 Medical Home Model. And if you use the 9.2 minutes per month of physician time in meetings and a 250 patient base, that comes out to 460 hours a year in physician time devoted to the Medical Home Model. And that is a highly conservative model. So, how much did the RUC recommend paying the primary care doc for all this time in meetings?
- The RUC recommends a work RVU per patient per month of 0.35 for a Tier 3 Medical Home. For 2008 (at least through July 1) the conversion factor of RVU into US dollars is $38.0870 for one RVU. So, the RUC feels that the 9.2 minutes of work, above and beyond the E&M code is worth $38.087*0.35= $13.33. So $13.33 per patient, per month, for a highly conservative 9.2 minutes of work. That works out to $1.44 a minute, or $86 an hour. Put it another way, if your panel of patients is 250 as CMS envisions, you will get 250*$13.33 or $3332.5 a month extra for being a Tier 3 Medical Home. That's $40,000 a year on the dot. HOWEVER, you are also working 460 hours a year in meetings, which are not generating ANY income other than the $40,000 a year. In essence, you are paid $86 an hour, and that's before you pay your over head. After overhead and taxes, you are lucky to take home $30 an hour. This is the RUC solution. A solution to what? Why would any primary care doc subject themselves to a $30 an hour paycheck. It's simply ludicrous.
- The RUC recommends a time of 7.8 minutes in physician time per patient per month for a Tier 2 Medical Home at a payment of 0.30 RVU per patient, per month. Remember, the tier is determined by the practice characteristics, not the patient characteristics. How much money is this? Well, again, assuming a panel of 250 patients, that's 250*0.30*$38.087= $2856 a month, or $34,000 a year. At 7.8 minutes per patient this comes out to about $87 an hour, again before over head. Insulting. Simply insulting.
- The RUC recommends a time of 6.5 minutes in physician time per patient per month for a Tier 1 Medical Home at a payment of 0.25 RVU per patient, per month. How much money is this? Assuming a panel of 250 patients, that's 250*0.25*$28.087= $1750 a month, or $21,000 a year. At 6.5 minutes in physician time per patient per month, that comes out to $65 an hour, before your overhead. If you imagine a 50% overhead in a practice, the RUC feels that a primary care physicians time is only worth about $30 an hour, or close to salary of an RN.
- The RUC recommends to CMS that it use clinical staff time of 80 minutes per patient per month for a Tier 3 medical home, 66 minutes per patient per month for a Tier 2, and 49 minutes per patient per month for a Tier 1. How much time is that? For a Tier 3, 333 hours of clinical staff time a month, or two full time equivalents. So now, not only is a doc only getting $40,000 a year at a rate of $86 an hour before overhead, less than 1/2 he could make from seeing patients, he must now hire 2 full time equivalents for clinical staff to accommodate the 333 hours a month in extra work. That would wipe out any monetary gains, and actually create a negative cash flow for the physician. Not only do they lose money on seeing less patients, they must hire staff to accommodate the program. This is the RUC speaking. It is utterly embarrassing that these folks have power.
- To be a Tier 3 you must have an EMR. I can't tell if the government will help you pay for it or not. It's just not clear in the report. A Tier 2 must have a desk top computer with monitor and patient registry software. Tier 1 contains no medical equipment.
All I have to say is, these are the folks who created the mess, and they are trying to create a system that is "cost neutral", that will pay for itself by not taking any money from their own specialties. It's paying for itself alright. By punching primary care in the face. The payment rates that are recommended are insulting and downright degrading. Do they think nobody is paying attention? These people have no business trying to create public policy.
Unless I'm completely off base in my interpretation, if I was an outpatient doc, I would run faster than Forest Gump from this proposed financial disaster. It may be great for the patient. You just have to pay for it. To make it financially viable, you would need to at least quadruple the proposed payment system, at the very least, and that's using conservative numbers.
And one other thing, since it's tied to the RUC/RVU system, the 10% looming cuts and any other cuts will loom always. It will always be subject to the backwards economics of the specialists who control the committee. The whole thing doesn't pass the sniff test. At the very least, it deserves the middle finger approach to public policy.
Thank you for having the stomach to really read it all and point out its absurd nature in detail.It just get better and better.How the ACP can brag about their efforts along those lines with a straight face is way past amazing.
ReplyDeleteYour analysis is just amazing. I always thought the medical home model was smoke and mirrors and now I see it is much more insidious. You are 100% correct about the RUC being the death of primary care. This new model is just ludicrous. Primary care was moribund...they have just disconnected life support.
ReplyDeleteI predict a flurry of products or services that help qualify docs as a medical home without spending ANY time on it.
ReplyDeleteSo, by the law of unintended consequences, those who dance that dance will capture $35,000 to $40,000K in revenue for very little.
Of course, on the perverse hamster wheel on which we live, this will just mean result in lowering of reimbursements to maintain "cost neutral"
And if this is like many other beaurocratic hoops, documentation will be the important thing.
For example, with preauthorization of name brand drugs, it isn't necessary that the patient has tried generics, but only that it is DOCUMENTED that the patient SAID he tried generics. Not the same thing at all.
Similarly, I expect a lot of these meetings to occur in the car or at lunch or while asleep, etc. But they will be documented.
You heard it here first.
There is a great deal to dislike about the RUC, but you are absolutely, totally, completely off base with this criticism. The recommendations for the PCMH are a major victory for the primary care forces on the RUC. PCP's will generate 2-3 times the payment they currently receive for taking care of these patients. You don't understand the math.
ReplyDeleteNobody expects docs to spend all the time in meetings that you refer to- this was only a basis for estimating the physician work by looking at another program for which data exists and then extrapolating. There is no data available for the PCMH, it does not exist yet. And the staff time calculations are the basis for paying the doc for hiring more staff to do the work.
The cost neurtality requirement comes from the law authorizing the demo. The RUC didn't write the law.
Much of your criticism of the rUC has merit, but you are totally wrong this time.
One more thing... the PCMH monthly payments are in addition to all the FFS payments you can currently bill. In addition. Not instead of.
ReplyDeleteAlso, this is only for a demonstration project. Data from the demostration project will be used to figure out payments for this if it ever becomes a regular Medicare benefit.
Sorry, I like your blog but this time you have missed the target.
anon 1250/0101. I think a clarification on your part is in order.
ReplyDelete1) Explain to me in detail how you come up with 2-3 time increase in payment. Because I don't see it. Using the RUC's own data for analysis, the average participant in the demonstration project will have seven E&M visits in a year, 2.8 of those at a 99214, and 4.2 of those at a 99213. In my state, a 99214 pays $83. A 99213 pays $55. Using this data, the payment to the physician for all 7 E&M visits would be $463 a year for one patient in the demonstration project . I must assume that since you tell me the PCP will generate "2-3 times the payment they currently receive for taking care of these patients", they will generate an extra $463-$926 dollars a year for a single medicare patient in the demonstration project. If you extrapolate out to 250 Medicare patients in the demonstration project, you are telling me that CMS will pay an additional $115,000-$232,000 per physician, per year. What I can't figure out is how you come up with this assumption based on the RUC recommendations. Please explain to me your math. The math I read, that came straight from their recommendations, states the physician will be credited with 0.35 work RVU per patient, per month. That's $13 and change per patient, per month, or about $40,000 a year using the current $38/RVU conversion factor as established by CMS. If there are other proposed calculations to determine payment, I missed them in the letter. Could you please elaborate for me.
2) You state: " Nobody expects docs to spend all the time in meetings that you refer to- this was only a basis for estimating the physician work by looking at another program for which data exists and then extrapolating." It's surprising you say that because, in the first sentence of the description of the Tier 3 Medical Home, the RUC states "The Work group estimates that for the "very sick" patients, the physician will spend 15 minutes per patient per month. This estimate is based on two other estimates. One is that the physician will spend approximately 12.5 minutes per patient per month in interaction the the case manager and the rest of the clinical staff team." The title of this report from the RUC very clearly states "Physician Work". How can you tell me that the physician is not expected to participate in these meetings when that's the basis for determining the physician work RVU. In simple terms, that would be physician work. And if a physician is not there how do you do care planning, reassessments, transition plans, end of life cares and family meetings without a physician? Honestly, are the care managers and nurses now going to be signing off independently on clinical decisions?
3)You state: "And the staff time calculations are the basis for paying the doc for hiring more staff to do the work." My math says $40,000 a year tops for a Tier 3 Medical Home with 250 patients. How do you hire enough staff to accommodate 333 hours a month of extra work. If my math is correct, that would be a LPN or a RN for $20,000 all benefits included. Impossible. The absolute bare minimum going rate for a full time RN is about $40,000 before benefits. Add on health insurance, retirement planning, liability insurance and you are pushing, at a bear minimum, $55,000-$60,000 a year, in the cheapest of practices. Times two gets you $110,000-$120,000 a year for your two extra RNs. If my math is correct, the office is taking a financial blood bath. I need to see your math before I comment any further. How do they pay for it?
4) You say: "The cost neurtality requirement comes from the law authorizing the demo. The RUC didn't write the law." Yes, I know that. I wonder how that happened.
5) You say: "PCMH monthly payments are in addition to all the FFS payments you can currently bill" Yes, I am well aware of that.
Like I wrote in my blog entry "if I am interpreting this correctly". Well, you say I'm not. I would love for you to show me how you arrive at your 2-3 times revenue figure, based on the RUC report. I would love for you to show me how the this demonstration project will not consume 8 hours a week in physician time. If not 8 hours, how much time? How much time will it take away from revenue generating patient encounters? I would love to know how the demonstration project expects physicians to hire 2 additional full time staff.
Thanks for reading. I hope to hear more from you.
Happy.
Fair enough.
ReplyDeleteMedicare payment for a service comprises 3 things: a physician work RVU, a practice expense RVU, and a malpractice expense RVU. Add up the RVU, multiply by the conversion factor, and you essentially have the payment.
The 0.30 or 0.35 numbers that you quote are the physican work RVU numbers. The applies only to the physician work of care coordination. In fact, every PCP (and I am one) does a great deal of care coordination that is uncompensated. For the first time, you would be paid real money for talking to that nurse, family member,care manager, etc.
Most of the payment is for staff. One way to look at this is to say that in a level 3 medical home, Medicare will pay you the money you need to hire 2 new staff memebers for each 250 patients enrolled in the medical home. CMS estimates that 86% of Medicare recipients will be eligible.
I have many years of managed care experience. In one large Medicare MA plan we are involved in, 180 PCP's share risk. We pay through a mixed method involving some FFS and some risk money. FFS billings are about $27.50/month PMPM(calculated at 100% of Medicare, we actually pay at 120%). If you add together the RVU's as above, you will get payment ranges in the neighborhood of $25-50 pmpm for the PCMH care management monthly payment. Hence the 2-3 times idea.
You are correct that the RUC is biased, has tremendous problems, is unfair etc. But this time the outcome was not controlled by the specialists.
Also, don't confuse the RUC's logic in establishing the payments with CMS's requirements for participation. All these team meetings are not part of the requirements; that information was used as a proxy measure for time a doc will spend. In reality, the time will be spent, but differently. The requirements for participation are in the G codes, not the payment logic.
For once, the RUC did the right thing.
I don't like to post anonymously, but you can probably figure out why I must do it this time.
Anon.I understand posting anon. I am well aware of the formula used to determine total RVU. I blogged about that on my entry "How much is a 99223 back in late November 2007. But, like I said, I may be off in my understanding, You haven't explained to me how you come up with $50 a month per patient in this model. You need to walk me through the numbers. Pretend I'm an idiot, and explain it in real simple terms. Explain to me what the 0.35 RVU per patient per month is from the RUC recommendations. If that doesn't represent the monthly payment per patient to the physician, what is it? As far as the $50 a month that you propose the PCP's will get. The RUC proposes the RVU system for payment of the G codes. That $50 represents about 1.3 RVU/month/patient. Where in the RUC recommendations does it say a PCP will get 1.3 RVU/month/patient. I want to understand. I read the whole thing and I didn't see it. I still don't see it based on what you're telling me.
ReplyDeleteIf the RUC isn't paying for physician work RVU, why do they call it physician work RVU. Why not call it a practice expense. If you believe the physician will not be involved in the care of these patients, that their time involvement will be limited, who will be signing off on all the care plans?
I don't see your rational for assuming the physician will be taking a back role in all this. They should be front and center making most of the clinical decisions that affect patient care. Otherwise, why institute a Medical Home in a physicians office. Why not set up a giant warehouse in India full of nurses for 2 dollars and hour and let them hash out the patient care plan. If the physician's role is so limited, then there should really be no nead to establish a home in a doctors office.
And if the entire purpose of the Medical Home is for the primary care doc to be paid just enough extra to hire two additional full time employees to deal with all the paper work, what's in it for the doc?
Just telling me the PCP will get $50 a patient per month does not mean it will happen. How do you back up that assertion?
Eagerly await your response.
Happy.
The physician work RVU is only a portion of the payment. The conversion factor is roughly $38 so the physician work part is roughtly 0.35 times $38 pmpm.
ReplyDeleteMost of the remainder of the payment is for staff cost ("direct practice expense" in RUC speak). There is a complex formula Medicare uses to compute this but it is order of magnitude $25/hr for the RN/LPN mix proposed. Count the time and do the math.
In addition, there is "indirect" expense, malpractice expense. You can rest assured that people did the calculations during the process, which is the source of my estimates. These are the numbers that the RUC understood these recommendations to represent in dollars; among the many absurd RUC protocols is that they report only RVU's and only for physician work, never dollars. Medicare calculates the practice expense RVU's and the RUC pretends it does not know how it all translates into money.
This is a lot of money.
Of course docs are key to this. All money is paid to the doc. Other people are paid by the doc, who will organize his or her staff in the most effective way to achieve the PCMH goals. The RUC recommendation is not intended to describe exactly what practices will do; the RUC used what data it could find to try to estimate how much physician time and staff time and technology would be needed; it then translated this information into a relative value using its arcane methods.
in the fully realized PCMH, the doc would be the leader of a team of people who would care for the patient. Much routine care will be done by ancillary staff (e.g., making sure people get mammograms, flu shots, A1C. The doc will direct all this (and get paid to do it). Office visits will decrease as lots of routine stuff can be done as well or better without a visit. But nobody can make this shift without payment.
The payment system is a mess, the relative values are wrong, the RUC bears a lot of responsibility although it is not as simple as a bunch of jerks sitting around overtly stealing from primary care. There is a (deeply flawed) method to the madness, which articles by Bodenheimer, Berenson and others have described.
But, for once, the RUC did something that is good for PCP's. The specialists didn't like it, and I can promise you that had the question been whether to pay for PCMH as a regular Medicare benefit with these numbers, it would not have passed.
There is plenty of opposition, but it shouldn't include you and your like-minded readers. The interventional radiologists provide enough difficulty without your help!
Thanks for the response, and I can finally see where you are coming from. The cost of the RNx2 will be built in to the practice expense. And I see that know on the RUC report. However, since that's a practice expense, it will have no bearing on the take home pay of the physician. It will simply increase the overhead expense. So let's assume that the physician work component represents the excess take home pay of the physician. That works out to $40,000 a year as a stated in my blog entry at 0.35 RVU/patient/month for a Tier 3. Only about $20,000 a year for a Tier one patient. How many hours in a year do you believe the physician will be devoting to the care of Medical Home duties. As proposed by the RUC, over 450 hours a year. You say no. Let's say the doc spends only 2 hours a week on the Medical Home duties.
ReplyDeleteThat's 30 seconds a patient per week. Or about 100 hours a year.
Let's assume you think that's enough. How much is the PCP generating? Well, If he takes in an extra $40,000 a year in "extra work", and he's putting in 30 seconds a week per patient, he's earning $400 an hour. After overhead of 50-60% he's taking home $160-$200 an hour which is about where primary care is paying right now, at the top end.
So what's the benefit to the doc? Where is the financial incentive. If the two RN's are completely devoted to Medical Home patients at about 320 hours a month, and the doc is spending 30 seconds per patient per month, and he's breaking even, where is the financial incentive to be in the model? At least he's not losing money, but he's doing more work and not getting paid for it. It looks to me like the insurance company and the patient wins this one.
correction on my. Hourly rate. That should state double the current rate of primary care. But that is assuming only two hours a week to manage a panel of 250 patients. The real basis for the faulty math lies in the value of .35 being assigned to 10 minutes of work. It's insulting
ReplyDeleteTo be a Tier 3 you must have an EMR.
ReplyDeleteAn EHR for small-group and solo-practice physicians costs $44,000 per physician, and generates an average ongoing $8,500 per year in annual costs, ACP president Lynne Kirk, MD told the house Subcommittee on Regulations, Healthcare and Trade of the House Committee on Small Business in October 2007. "The business case does not exist to make this kind of capital investment," Kirk told the Subcommittee.