Vermont’s Blueprint for Health program continues to reduce health care costs by improving preventive and primary care, but that success is threatened by low incentive payments, according to a new report.
Blueprint participation required substantial upfront investments by primary care practices. The program also created a network of multidisciplinary health teams that use social workers, dietitians and others to keep patients healthy.
Those costs were defrayed with grant money, but the ongoing incentive payments may not be enough to keep providers involved in the program.
Lawmakers requested the report to see if it makes sense to increase Blueprint payments, which have remained level since 2008. A measure to increase payments became a sticking point in passing a health care bill last session. The report was co-authored by Robin Lunge, the state’s director of health care reform, and Blueprint director Craig Jones.
Participating providers say current payments are inadequate to support “clinical services in accordance with (the program’s) demanding yet important standards,” according to the report.
“If it’s saving all this money for the state, why isn’t the state willing to reinvest some of that with the people that are generating those savings?” said Paul Harrington, director of the Vermont Medical Society.
Vermont’s incentive payments are lower than those in other states experimenting with similar care management initiatives, Harrington said.
Blueprint may also be threatened by a federal care management incentive program through Medicare that will offer much higher reimbursement rates. However, that program would leave out close to 230,000 people with Medicaid or commercial insurance whose care is currently coordinated by Blueprint practices.
There were 123 participating primary care practices, or medical homes, serving 347,489 people — more than half of Vermont’s population — in Dec. 2013, according to the report.
Patients whose care was coordinated through Blueprint cost Vermont Medicaid an average of $5,798 in 2013 versus an average of $6,469 for beneficiaries that received primary care elsewhere, for an average savings of $671. The program yielded similar results for patients covered by commercial insurance and Medicare.
“The difference in health care expenditures was driven by several factors including lower hospitalization rates, and lower expenditures on pharmacy and specialty care,” according to the report.
But the report says that given Governor Shumlin’s budget instructions, which ask departments to plan for level funding or cuts, increasing payments would be “challenging.”
It’s only recently, in the past year, that the Blueprint has been able to collect the numbers that illustrate its impact, said report co-author Craig Jones.
“It’s unfortunate that those (demonstrated results) coincide with a tough budget situation,” he noted. “That said, if you’re working toward a vision of a whole population health system, you’ll need a great delivery system under it, and this is a good foundation.”
He added that Blueprint has “stimulated a lot of change around the state,” and he would like to see the program strengthened if possible.
Sen. Tim Ashe, D/P Chittenden, said the question for lawmakers this session is whether state dollars invested are offset by savings from reduced utilization of services, and if that would still be the case if payments are increased.
“It doesn’t matter if its good economic times or bad, if the spending saves money then it makes sense,” he said.
Jones is expected to testify on the report next week at a meeting of the Joint Committee on Health Care Reform Oversight. Ashe, who co-chairs the committee, hopes the savings question can be answered at that time.
Another challenge to increasing Blueprint payments in the short-term is that the 2015 rates for private health plans were already set by the Green Mountain Care Board, so insurers would not be able recoup additional costs through higher premiums.
The Blueprint makes two types of payments to providers. The first goes directly to primary care practices based on how they score on national quality metrics. Those payments are between $2.00 and $2.50 per patient per month.
The second goes to regional administrative organizations that operate the multi-disciplinary teams that support primary care doctors. Those payments are $1.50 per patient per month, with a $17,500 cap.
Increasing the payments to between $4.00 and $5.00 for primary care practices and to $3.00 for the regional administrators would cost Vermont and participating insurers a combined $13.2 million, with $5.4 million coming from the state, according to the report.
Even if the state and private insurers could come up with the money to increase Blueprint payments, Medicare will offer those same practices $42 per patient per month in care coordination incentive payments starting in 2015.
“I think there is a real possibility, looking at the work involved and the reimbursements, that (physician practices) will switch over to the Medicare chronic care management program,” Harrington said.
Jones isn’t so sure. The problem, he said, is that only beneficiaries with multiple chronic conditions can be billed for the Medicare incentive payments. Practices may discover that they don’t have the volume of Medicare patients to actually profit.
“The incentive may not look as good once they do the math,” he said, “They might be able to hire a nurse manager, but they’d lose access to the community health teams.”
The Medicare offering is fee-for-service — meaning it will create a new code that can be billed — and runs counter to the capped payment model that Blueprint uses, because its volume driven, Jones said.
The real promise of Blueprint, Jones said, is to create an integrated primary care delivery system that is able to serve the state’s entire population, and then “test a total capitated payment” to that system.
If primary care practices defect to join the Medicare program or leave Blueprint because of low payment rates, he warned, that goal would suffer a setback.
