Four-year evolution of a large, state-wide patient-centered medical home designation program in Michigan.

BACKGROUND: The patient-centered medical home (PCMH) has been recognized as a strategy to redesign and improve the delivery of primary health care. Collaboration between Blue Cross Blue Shield of Michigan (BCBSM) and 39 Physician Organizations in Michigan laid the foundation for a state-wide medical home program. OBJECTIVE: The objective of the study was to describe a unique methodology developed and implemented by BCBSM to designate primary care physician practices as medical homes. METHODS: Since 2009, practices were designated annually as medical homes on the basis of (1) implementation of PCMH-related capabilities, and (2) performance on quality-of-care and health resource utilization measures. An overall score for each practice was calculated. Practices were ranked relative to each other, with the top portion of the continuum representing an achievable level of performance. RESULTS: The number of practices designated as medical homes more than tripled since the program's inception: 302 (1283 physicians) in 2009, 513 (1876 physicians) in 2010, 772 (2547 physicians) in 2011, and 994 (3028 physicians) in 2012. Designated practices reported implementing more than double the PCMH capabilities of nondesignated practices, yet all practices increased their number of implemented capabilities during the 4 years. DISCUSSION: This program represents the largest state-based PCMH program in the United States. Over the 4-year period, 1130 unique practices have received designation, representing 3469 unique physicians. An estimated 1.4 million BCBSM members in Michigan received care from these practices. This program will continue to develop, drawing on changes in the health system landscape, collaboration with the physician community, and knowledge gained from PCMH evaluations.

Michigan's Physician Group Incentive Program offers a regional model for incremental 'fee for value' payment reform.

Blue Cross Blue Shield of Michigan partnered with providers across the state to create an innovative, "fee for value" physician incentive program that would deliver high-quality, efficient care. The Physician Group Incentive Program rewards physician organizations-formal groups of physicians and practices that can accept incentive payments on behalf of their members-based on the number of quality and utilization measures they adopt, such as generic drug dispensing rates, and on their performance on these measures across their patient populations. Physicians also receive payments for implementing a range of patient-centered medical home capabilities, such as patient registries, and they receive higher fees for office visits for incorporating these capabilities into routine practice while also improving performance. Taken together, the incentive dollars, fee increases, and care management payments amount to a potential increase in reimbursement of 40 percent or more from Blue Cross Blue Shield of Michigan for practices designated as high-performing patient-centered medical homes. At the same time, we estimate that implementing the patient-centered medical home capabilities was associated with $155 million in lower medical costs in program year 2011 for Blue Cross Blue Shield of Michigan members. We intend to devote a higher percentage of reimbursement over time to communities of caregivers that offer high-value, system-based care, and a lower percentage of reimbursement to individual physicians on a service-specific basis.