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Washington -- Medicare, using its upcoming medical home demonstration project, is preparing to pay participating primary care physicians for the extra work required to manage the care of chronically ill patients. Now an AMA-convened panel has outlined how those additional payments might work.

The law mandating the pilot program required the Centers for Medicare & Medicaid Services to consult the American Medical Association/Specialty Society RVS Update Committee, or RUC, for advice on how to structure payment. The panel on April 29 sent its proposal to the agency. The RUC regularly provides advice to CMS on how to value Medicare services, and the agency often concurs.

The three-year project will operate in up to eight states or regions within states. It is expected to begin paying for medical home activities in January 2010 after recruiting roughly 50 practices per location early next year, according to a CMS official. The goal is to see whether paying more up front for targeted, continuous and coordinated patient-centered care for chronically ill beneficiaries will save Medicare money over time.

If CMS were to take the advice of the committee, physicians would receive a monthly payment for each beneficiary they enroll in the project -- in addition to any regular pay for Medicare services. The program would pay extra monthly amounts to offset the increased costs of additional nurse case managers, liability insurance and electronic medical record systems. Total medical home compensation per physician would run in the thousands of dollars per month.

By paying doctors to work with case managers to coordinate a targeted plan of care for each chronically ill patient, CMS hopes to save money by reducing the amount of complex services and hospitalizations that those beneficiaries will require.

The participating practices will have an incentive to bring down costs. No Medicare payments or medical home fees will be at risk if the effort proves more costly, but 80% of any savings Medicare realizes will go back to the practices as a bonus.

CMS, however, should look at more than dollar amounts when determining how well the medical home project worked, RUC Chair William L. Rich III, MD, wrote in a letter accompanying the pay recommendations.

"The RUC strongly encourages the agency to collect clinical, as well as fiscal, endpoints to measure the success of this demonstration project," he stated. Cost savings may not be immediately apparent during the three-year span.

CMS plans to take a broad look at how quality improved after the demonstration is complete, the agency official said. But the primary focus is to be at least cost neutral and to see whether the concept can save money. "This is not a clinical trial," he said. "We are not testing the theory of medical homes being the next best thing."

Medical home veterans

The demonstration is Medicare's first crack at using the medical home concept, but some of the up to 2,000 primary care physicians who will get to participate likely will have experience with it. Numerous private sector initiatives have launched, driven in part by strong advocacy for this care model by primary care physicians' organizations such as the American College of Physicians and the American Assn. of Family Physicians.

A practice that already serves as a medical home or has resources in place to become one will be a natural fit for the Medicare project, said Terry McGeeney, MD, president and CEO of TransforMED, a practice redesign initiative sponsored by the AAFP. TransforMED recently completed a two-year pilot that tested a patient-centered medical home model in 36 family practices across the nation. Preliminary results demonstrated that patient satisfaction and practice economics improved when the model was implemented.

The next logical step is to adjust the system to pay for medical home activities, then see if the effort can save money, Dr. McGeeney said. "Given the numbers from RUC, I would strongly encourage physicians in those eight states to seriously look at it. This is something that they're [eventually] going to have to do anyway, so they might as well get in on the ground floor and get some real money for it."

Primary care physicians from all types of practices in the chosen states should consider applying for this demonstration, said Don Klitgaard, MD, a family physician and medical director of the Myrtue Medical Center in Harlan, Iowa. His center participated in the TransforMED pilot, and he is convinced the effort improved care and saved money.

While moving to a truly patient-centered medical home is the right thing to do, it can be difficult for doctors conditioned in the old way of running a practice, Dr. Klitgaard said. "We're not built to change. Status quo is a lot easier than change."

Washington -- Florida lawmakers early last month adopted a bill that aims to increase access to affordable health coverage by allowing insurers to offer plans not subject to state benefit mandates.

Under the legislation, private health insurers would contract with the state through a new program called Cover Florida to offer coverage options to anyone who has been uninsured for at least six months. Eligibility would be faster for people who have lost their jobs. The bill would require the state to approve at least one statewide plan.

In addition, the measure would allow insurers and other companies to offer more flexible insurance options and other products geared toward businesses with 50 or fewer employees through a new initiative called Health Choices. These products also would be exempt from insurance mandates. About 3.8 million Floridians lack health coverage.

The Florida Medical Assn. supports the legislation, which Gov. Charlie Crist is expected to sign. "If this is done right, you'll vastly increase the number of insured patients and give them things like catastrophic care they need and perhaps preventive services they want," said David McKalip, MD, an FMA board member and chair of its council on medical economics.

The Florida Assn. of Health Plans' 21 members are excited about the new flexibility the bill would provide by exempting the new plans from the state's health benefit mandates, said Jim Bracher, the association's executive vice president. "The idea that you could develop a plan that would be more tailored to the kinds of things that your potential customers would want, we believe is a big plus."

Florida has about 50 health coverage mandates, which take two forms: requirements for specific benefits, such as well-child care, and for services by certain health care professionals, Bracher said.

3.8 million Floridians lack health insurance.

Still, the legislation would require that insurers participating in Cover Florida offer two types of plans: one with catastrophic and hospital insurance, and one without.

The bill, expected to be implemented in 2009, emphasizes flexibility over government control. A new entity, the Florida Health Choices Corp., would oversee the program for small businesses. The 15-member body would develop standards for insurers and other companies to meet, and review the new offerings they develop. One product possibility is prepaid cards for health clinics, said Rep. Aaron Bean, chair of the House Healthcare Council, which oversees health care legislation.

"This is really bringing free market principles to health care," Bean said. "We're going to see when government gets out of the way what the free market can do."

Under the legislation, all plans would be offered to people no matter their medical history, a requirement known as "guaranteed issue." However, the bill would not prohibit the exclusion of coverage of new enrollees' preexisting conditions for a certain period after enrollment, said Bracher.

Crist and other state leaders have said Cover Florida could result in premiums as low as $150 a month for health plans with an array of basic, preventive care. Bracher said requiring the plans to be guaranteed issue will make that goal more difficult to reach.

The bill is expected to initially cost only $1.5 million, with all of that for starting the Health Choices Corp. and its Web site, where consumers would be able to access information about the new plans and products. The state would not subsidize any of the new health plans or products nor require employers to offer health benefits. Instead, the bill calls for tax credits for employers who participate in the Health Choices program.

The legislation represents a compromise between House leaders on one side and Crist and the Senate on the other. The Senate and Crist favored Cover Florida only, but the House wanted to adopt both Cover Florida and Health Choices. "[At first] they didn't understand the Health Choices plan," Bean said. But two days before the legislative session ended, the two camps reached an agreement.

Last fall, Laura Allen didn't think Massachusetts' law requiring everyone to have health insurance would affect her life. She had a customer service job at a rubber stamp company that provided coverage.

But then the 42-year-old Easton, Mass., resident was told she would be laid off before the end of the year. And the new state law imposed a $200 tax penalty on anyone uninsured on Dec. 31, 2007.

The prospect of being unemployed and uninsured was stressful for Allen. She couldn't afford the $1,400 monthly COBRA premiums for herself and her husband. So she called the Connector Authority -- the body managing the state's comprehensive health reform program -- several times for help enrolling in health insurance. She couldn't get through because the Connector phone lines were overwhelmed by residents trying to do the same thing. "It was frustrating," said Allen.

Eventually, things worked out for Allen. On Nov. 5, 2007, she began work as a receptionist at an electrical supply company that would offer health insurance in two months -- just after the deadline. Her company let her enroll five days early so she could avoid the tax penalty. A Commonwealth Connector spokesman said Allen could have applied for a hardship exemption.

Allen, like many others in Massachusetts, found herself on the front line of an experiment in personal responsibility -- the individual health insurance mandate.

Since the Massachusetts effort began in 2006, many lawmakers and policy experts have embraced individual mandates as an integral part of health system reform. Several states -- most notably California -- have considered legislation with a Massachusetts-style insurance requirement. So far none has adopted the measures. Some states are considering mandates for higher-income residents only, which parallels AMA policy.

At the federal level, at least one lawmaker has introduced a bill with an individual mandate. Both Democrats running for president include required insurance in their health system reform plans.

The idea behind these proposals is that reform won't work unless everyone is personally responsible for getting insurance. The theory is that requiring everyone to have coverage lowers its cost. Premiums would drop as medical risk is spread across the population, and health care costs would decrease because uncompensated care would decline, said Jonathan Gruber, PhD, professor of economics at the Massachusetts Institute of Technology and a member of the Connector board.

Mandates don't work alone

Mandate proponents note that an insurance requirement doesn't mean much unless affordability is directly addressed. The questions that arise include how much to subsidize coverage for low-income people, what benefits to mandate, and how to reform the health insurance market.

Part of the AMA's health system reform plan calls for requiring people earning more than 500% of the federal poverty level -- $52,000 for individuals -- to obtain at least catastrophic coverage. Those who don't comply would face tax penalties. People earning less would be subject to the requirement only after receiving tax credits or vouchers for buying insurance. "It's difficult to force somebody who can't afford health insurance to purchase it," said Joseph M. Heyman, MD, AMA Board of Trustees chair-elect.

Massachusetts lawmakers and government officials addressed the affordability problem with a host of reforms. The state created Commonwealth Care, a program in which private health plans provide state-subsidized coverage to residents who earn less than 300% of the federal poverty level and don't have access to work-based insurance. People who earn less than 150% of poverty pay no premiums. People who earn more than 300% of poverty have access to the plans, but not to subsidies.

However, insurance costs are still an issue, some experts said. The Connector board in March voted to increase premiums for subsidized plans by 10% starting July 1. Participating insurance companies initially proposed 14% premium hikes.

Some Massachusetts residents are concerned about premiums and the tax penalty. For example, an online posting on the AMA's Voice for the Uninsured Campaign reads: "I live in Massachusetts. You know what they think is Health Care Reform? Make it a law that you must purchase health insurance ... (although you may not be able to afford it) or they will penalize you on your tax return. Ridiculous. Just because they make it a law doesn't mean I have any more money coming into the household."

The state does not consider co-payments and deductibles in calculating whether insurance is affordable, said Brian Rosman, research director at Health Care For All, a Massachusetts consumer-advocacy organization. That's significant because residents without access to insurance deemed affordable for their income level are exempt from the mandate. In April, the Connector board raised health plan affordability standards by 10%.

Massachusetts' reform law prevents health plans from excluding applicants based on health status, but premiums vary by age and location. While a younger worker might pay a couple of hundred dollars for a plan, an older worker could pay twice as much. The goal is to maintain both reasonable premiums and widespread availability. "The jury is still out as to whether we have come up with the right balance," Rosman said.

The Massachusetts experience has not shown that individual mandates lower health spending, said Glen Whitman, PhD, associate professor of economics at California State University, Northridge. The insurance subsidies and the state's underestimates of the number of uninsured people are expected to push the reform budget millions beyond the $869 million initial projection for fiscal year 2009.

Individual-mandate opponents also have little faith that governments in general will be able carry out all of the policies needed to make them work -- especially choosing a minimum benefits package. "We cannot define that in a way that is going to be immune to political pressures," Whitman said.

However, one thing sometimes lost in the debate is that Massachusetts has created better health plan competition, said economist Len Nichols, PhD, director of the health policy program at the New America Foundation, a nonprofit, nonpartisan public policy institute. Because health plans can't charge enrollees based on preexisting conditions, the plans now have to compete on other levels, such as getting the best quality care at the best price. "In many ways, they have done the insurance market part right," Dr. Nichols said.

A national insurance mandate?

Despite the questions raised by the Massachusetts effort, both Democratic candidates have included individual mandates in their health system reform plans. However, Sens. Hillary Clinton (D, N.Y.) and Barack Obama (D, Ill.) have sparred about the form such a mandate should take.

Clinton's plan includes an individual insurance requirement for everyone. She would address access and affordability by prohibiting insurers from denying applicants based on health status and by offering tax credits to help people buy coverage.

"You've got to have everyone in the system so that everyone contributes to it all of the time, so that when they're sick, everyone gets coverage," said Chris Jennings, a health policy consultant and a senior Clinton campaign adviser.

In order for Clinton's plan to require insurance companies to guarantee access and still have stable prices, it also must force people to participate so they don't wait until they're sick to get coverage, Whitman said. "The individual mandate ends up being a patch for that problem."

Obama's plan would only require all children to be covered. Obama would consider an individual mandate for adults once affordable health insurance is available to everyone. To get there, he proposes a national health insurance exchange to help individuals who want to buy private coverage. His plan would also provide federal income-related subsidies to help people buy coverage.

Meanwhile, presumptive Republican nominee Sen. John McCain of Arizona does not favor an individual insurance mandate. This sets up the issue for continued debate in the presidential race.

In Congress, Sen. Ron Wyden (D, Ore.) has offered legislation with an individual mandate. The Healthy Americans Act would require all Americans and permanent citizens to obtain health insurance. It would replace the existing tax exclusion for employer-based insurance with an income tax deduction for health insurance and create state-run purchasing pools to work with private health plans to offer coverage in each state. The measure probably would pay for itself by 2014, states a May 2 Congressional Budget Office letter.

The Wyden bill, introduced in January 2007, has not had a committee vote but has 14 co-sponsors evenly divided across parties.

States cautious

Although Massachusetts made a huge splash two years ago when it adopted its individual mandate, so far no other state has jumped in the pool. Several have debated legislation or discussed the issue in commissions.

"When Massachusetts enacted it, it had a lot of support," said Paul Ginsburg, PhD, president of the Center for Studying Health System Change, a nonpartisan policy research center. "Then I would say the outcome of the California battle has probably undermined the support." Clinton's and Obama's fight over the issue hasn't helped generate enthusiasm, either.

In California, a Senate committee in late January rejected a comprehensive health reform bill with an individual mandate. The State Assembly already had passed the measure, and Gov. Arnold Schwarzenegger supported it. A $14.5 billion budget deficit and pessimistic state cost estimates for the legislation led to the 7-1 committee vote, which killed the bill for the foreseeable future.

The rest of the country will gain valuable insight from Massachusetts when its mandate and tax penalty are in full effect, Dr. Nichols said. "The good news is they're doing the experiment for us. The bad news is we won't have the experiment finished before the nation debates it in 2009 and 2010."

When disaster strikes, physicians want to be able to respond. But under such unusual circumstances, the usual standard of care may not apply.

To alleviate fears of having their medical judgment unfairly questioned, doctors are seeking to bolster state civil and criminal liability protections when they assist during officially declared emergencies.

Louisiana is the latest testing ground. In April and May, the Senate unanimously passed two bills proposing immunity from civil liability for in-state doctors and volunteers from out of state practicing in disaster zones. A third measure, which offers protection from criminal liability, is under House debate.

The effort grew out of a state committee of doctors, other health care professionals and community members that formed to advocate for the legislation.

It started with Katrina

The Committee for Disaster Medicine Reform evolved after former Louisiana Attorney General Charles C. Foti Jr. arrested New Orleans otolaryngologist Anna Maria Pou, MD, and two nurses in July 2006. Foti alleged that they had murdered several patients with lethal doses of pain medications in the aftermath of Hurricane Katrina. A grand jury dismissed the allegations last July. Dr. Pou and the nurses denied any wrongdoing.

"We said something has to come out of this, and we have to change the rules," said Dr. Pou's lawyer, Richard T. Simmons Jr., who helped draft the Louisiana legislation. For example, state Good Samaritan laws don't address catastrophic situations, he said. Yet in extreme emergencies, "doctors are forced to make a lot of decisions that are no-win, where there are no good solutions."

Good Samaritan laws vary from state to state.

Under one Senate bill, doctors and other medical personnel would be relieved of general civil liability during an emergency declared by the governor. A second measure offers civil protections during an official emergency when doctors render treatment arising from an evacuation or when they are following disaster medicine protocol established by a military or governmental authority. Both bills include exceptions for willful misconduct. The first measure also exempts gross negligence.

The House legislation would require the attorney general or district attorneys to refer any possible criminal investigations of disaster care to a confidential medical review panel before bringing charges. Opinions by the three-member panel -- to include the local coroner, a doctor or nurse, and a disaster medicine expert designated by the governor -- would be advisory but could become part of a court record.

"We have to start thinking about [disaster medicine] in a much broader sense," said otolaryngologist and retired U.S. Army Colonel Keith F. DeSonier, MD, a member of the reform committee and the Louisiana State Medical Society's Council on Legislation. The LSMS supports the bills.

Dr. DeSonier was in Lake Charles, La., when it took in about 30,000 evacuees after Hurricane Katrina hit New Orleans in August 2005. The problem worsened when Hurricane Rita struck that September and the city had to relocate patients again.

"When you lose [resources] you have to allow great flexibility so people with great talent can come in and give temporary help and relief without worrying about liability exposure," Dr. DeSonier said.

Too much protection?

But state prosecutors worry that the criminal protections go too far.

E. Pete Adams, executive director of the Louisiana District Attorneys Assn., said prosecutors have a constitutional right to decide when, how and who to charge in a criminal case.

Adams called Dr. Pou's case an aberration. "This is one bad case, and you don't make new law out of one bad case. We are mindful of the stresses, but we want to pass something the courts will uphold and that can be of assistance to prosecutors."

At press time in mid-May, a House committee passed the criminal liability bill with amendments that allow prosecutors to use the medical review panel at their discretion. The district attorneys association lobbied for the changes. Suspected doctors also could not be arrested unless they posed a flight risk or until after the panel had issued an opinion.

Although the panel is optional, Simmons said public pressure "would make it difficult for district attorneys to ignore this process if they are looking at doctors who stayed behind in disastrous times."

The bill is not meant to override state authority, Dr. DeSonier said. "We're just asking to put a speed bump to slow everyone down in a disaster, because things happen so fast and people are responding differently."

National efforts

The Louisiana legislation coincides with national efforts by physicians and other advocates who say changes are necessary before calamity strikes again.

"The bottom line is there is not one standard of consistent protection," said Andrew I. Bern, MD, an American College of Emergency Physicians board member and past chair of its Disaster Medicine Section. "The question is: Do we want to be proactive?"

Doctors say Good Samaritan laws vary from state to state, and federal protections fall short.

For example, federal law covers only nonpaid volunteers, which could preclude many doctors, experts said. Federal and most state provisions also exclude criminal liability, according to American Medical Association research.

The AMA at its 2007 Annual Meeting drafted model state legislation to shield qualified doctors who volunteer or already work in a declared disaster area from civil and criminal liability, except in cases of malicious intent or willful misconduct.

The proposal also seeks to raise the liability standard under most state laws, for example, by requiring plaintiffs to show that gross negligence or deliberate harm was involved.

The Uniform Law Commission, a group of lawyers, legislators and judges, also created a model bill -- the Uniform Emergency Volunteer Health Practitioners Act -- which several states have enacted since 2006 and nearly a dozen others are considering in 2008.

The draft legislation proposes a national registry of licensed doctors and other health care professionals that states could use in emergencies to avoid waiting to verify credentials. One version also offers paid and unpaid volunteer doctors, and the entities deploying them, immunity from general civil liability, except gross negligence or willful misconduct, during disasters. An alternative mirrors federal protections and provides uncompensated volunteers protection from general negligence.

Tennessee in 2006 adopted the registry provisions but chose to use its own Good Samaritan laws as the negligence standard.

Some trial lawyers argue that existing state and federal protections suffice.

Suzanne Keith, executive director of the Tennessee Assn. for Justice, the state trial bar, said state law already considers extraneous circumstances, and the courts are unlikely to punish doctors who act in good faith.

"The tort system is going to take into account the reasonable standard of care for those circumstances, and the threshold [for negligence] would be higher," she said. To immunize doctors "is like saying they are not going to be held responsible at all."

Washington -- It's not too late for physicians to begin participating in Medicare's pay-for-reporting program. The Centers for Medicare & Medicaid Services has implemented a number of changes aimed at enticing more doctors to give the program valuable quality information while striving for a 1.5% bonus on their Medicare payments.

The Physician Quality Reporting Initiative was in effect for only the last six months of 2007 but runs for the entire year in 2008.

In addition, the list of quality measures has expanded from 74 to 119. CMS has added two structural measures -- one that rewards the use of electronic medical records and the other for e-prescribing.

Although nearly half of the year is already over, physicians who have not yet participated in the initiative still can qualify for a full-year bonus. If a physician is able to report at least three measures for at least 80% of the patients to whom those measures apply, he or she could still receive the 1.5% lump-sum bonus on all of their allowable charges for the year.

Some of the quality measures, such as blood pressure control for diabetes mellitus patients, need only be reported once per applicable patient during the entire reporting period, instead of every time the associated test or procedure is given. A doctor therefore could hit the 80% mark even if the physician missed an opportunity to report on patients earlier in the year.

New options for doctors

For physicians who may have missed their chance for a full-year bonus, however, CMS also is offering a six-month reporting period that starts July 1. For that option, participating doctors can't report individual measures but instead must report a single measures group pertaining to a particular chronic condition.

A physician who sees a significant number of diabetes mellitus patients, for example, might want to consider reporting on the diabetes measures group. It contains measures associated with five tests: hemoglobin A1c, low density lipoprotein, blood pressure, urine and eyes.

In addition to diabetes, the measures groups cover end-stage renal disease, chronic kidney disease and preventive care.

CMS also is offering another reporting option that could make the 2008 PQRI attractive to a wider array of physicians. The agency will allow doctors to report individual measures or measures groups through approved clinical quality registries instead of using special CPT-II codes and temporary G-codes on claims.

Many physicians already give quality data to registries, such as the National Cardiovascular Data Registry and the ones maintained by the Society of Thoracic Surgeons and the American Osteopathic Assn. As long as the individual measures or measures groups sent to the registry meet the same minimum requirements as those reported via Medicare claims, the participating physician could be eligible for either a half-year or full-year bonus.

"If a physician is already reporting information that pertains to PQRI measures, it would be certainly less burdensome to the physicians if we would accept the information from the registries, rather than require the physicians to duplicate submission of data by not only sending it to the registry but also sending it to us in claims," said Michael T. Rapp, MD, director of the CMS quality measurement and health assessment group. The agency will announce the qualified registries on Aug. 31 and will begin accepting report submissions in December.

AMA help for participants

The American Medical Association is urging physicians who are considering participating in the 2008 PQRI to review carefully the instructions and frequently asked questions posted on the CMS Web site for the initiative (www.cms.hhs.gov/pqri).

The agency no longer can reduce the 1.5% bonus for a physician if it determines that the doctor chose measures that applied to relatively too few patients in his or her practice. CMS reduced bonuses in this way for the 2007 program. The agency will, however, deny outright the extra payment for doctors who do not meet the minimum reporting requirements. This would mean that the six months to a year of extra administrative work the practice invested for PQRI would reap no financial benefit.

To help physicians navigate the program and make sure that they do not fall short, the AMA has posted a set of tools on its PQRI Web site (www.ama-assn.org/go/toolsmedicarepqri). For each quality measure, the Association provides a detailed description, code specifications that identify eligible patients, and a data collection sheet to help physicians and staffers compile the necessary claims information.

The AMA produced the information in collaboration with CMS, Mathematica Policy Research Inc., and the National Committee for Quality Assurance. Many of the PQRI measures were developed by the AMA-convened Physician Consortium for Performance Improvement with the help of NCQA and medical specialty societies.

Administration officials hope that many more physicians will decide to try for the bonus and enhance Medicare's quality efforts. "We're eager to encourage more physicians and other eligible professionals to participate in the program, and that is the reason for these various options," Dr. Rapp said.

Last year, only about 16% of physicians and other eligible health professionals submitted at least one quality code on their claims, CMS said. Only slightly more than half of those doctors reported enough to be eligible for a bonus. The agency will distribute the extra pay in mid-July.

Although some observers said the participation rate was not very high last year, Medicare officials were cheered by what they saw as good representation by many different types of physicians and medical practices, said CMS Deputy Administrator Herb B. Kuhn at a May 8 congressional hearing. He noted that the 2007 program had never been attempted before and ran for only six months.

More doctors eventually will come around to the promise of the pay-for-reporting program, Kuhn predicted. "Physicians are sometimes slow adopters."