Higher Medicare pay earmarked for practices in medical home trial

Participants could receive additional bonuses if the pilot produces cost savings.

By David Glendinning, AMNews staff. June 2, 2008.

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.