Highmark’s P4P Program Uses 2 Different Approaches

Physicians can earn extra money, but hospitals can lose if they do not show an improvement in quality
Frank Diamond
Managing Editor

MANAGED CARE December 2010. ©MediMedia USA

Physicians can earn extra money, but hospitals can lose if they do not show an improvement in quality

Frank Diamond

Managing Editor

One of the many changes wrought by health care reform will be more focus on provider performance. That means that the long-sought buy-in for pay-for-performance programs might now resonate in a more convincing fashion, officials at Highmark hope.

“When we talk about health care reform, the providers understand to varying degrees what lies ahead for them,” says Linda Weiland, Highmark’s president for provider performance and information management.

It seems to be working, based on Highmark’s Quality Blue program, a two-pronged P4P effort aimed at physicians and hospitals. For instance, one of the P4P categories involves prescribing generics. In 2006, the Quality Blue average percentage rate for generic prescribing (primary care providers) was 46 percent and today the average QB generic prescribing for all participating PCPs is 73 percent. The plan estimates it saved more than $87 million in 2010 through increased generic substitution.

Meanwhile, the hospital effort is heavily focused on reducing infections associated with health care. Highmark has been monitoring central line infections for four years. The rates have been consistently lower than national averages, as measured by the Centers for Disease Control National Healthcare Safety Network.

A comparison to the network’s overall data during four years (2007-2010) demonstrates that the Quality Blue hospital subset prevented 1,283 central-line-associated bloodstream (CLAB) infections, saving 154 to 321 lives, and produced $9.4 million to $37.4 million in patient care cost savings ($7,288 to $29,156 per CLAB infections), according to the company.

Highmark, a Pennsylvania-based health insurance plan with about 4.8 million members, overhauled its P4P program around 2005, using a combination of risk-sharing and incentives.

“For the primary care physician, they are incentives,” says Weiland. “They’re incentives to be earned over and above what we pay for evaluation and management fee-for-service office visit codes. Physicians can earn an additional $3, $6, or $9 per E/M service. For hospitals, part of the reimbursement is placed at risk; it can be up to 3 percent of inpatient/outpatient revenue. ”

Sixty-three hospitals and about 5,000 physicians participate in Quality Blue.

One crucial element involves having clinical consultants at doctors’ disposal, says Deborah Donovan, Highmark’s director of quality performance management. “The folks that fill those seats have experience in physician practice, nursing, health care administration, risk management. These are Highmark employees,” says Donovan, adding that there are 14 of them. “We have two medical directors who work with our teams besides the clinical consultants.”

Sharing the wealth

Highmark doesn’t mind sharing, says Weiland. For instance, 15 fellow Blues plans were invited in May to see how Quality Blue operates. “They are our sister plans but also our competitors in certain markets,” Weiland says. “We haven’t held back in sharing our program design, structure, and outcomes performance.”

The programs are evolving. In the near future, the Centers for Medicare & Medicaid Services plans to reduce hospital payment based on readmission rates. “We don’t want readmissions to occur unnecessarily either,” says Weiland. “So how can we partner to a mutual end? Highmark saw this as an opportunity to introduce a readmission-focused performance measure in our P4P programming.”

Highmark doesn’t play “gotcha” with physicians or hospitals, which is one reason its P4P program is a success, says Linda Weiland, the plan’s president for provider performance and information management.