Boost VBP with Financial Incentives For Physicians

The right approach, such as annual bonuses for meeting quality measures, can help reluctant physicians embrace value-based payment models.

This article appears in the September 2015 issue of HealthLeaders magazine.

The healthcare industry is moving steadily toward value-based payments, but physicians tend not to be as far along in accepting the idea as C-suite executives. That can be a problem, because physician participation is key to meeting the population health goals that determine whether the health system makes money.

Some health systems are seeing success in getting physicians on board with the kinds of clinical changes that will be required by offering financial incentives, such as annual bonuses for meeting quality measures.

For the past year at Bon Secours Health System in Marriottsville, Maryland, physicians have been incentivized with the Primary Care Quality Incentive Program (PCQIP), a shared savings model that allows physicians to benefit from the system's work with accountable care organizations. Physicians traditionally were paid a base salary plus a productivity bonus, explains Robert Fortini, PNP, who is the chief clinical officer for Bon Secours Medical Group in Richmond, Virginia.

This year, Bon Secours—a $3.3 billion nonprofit Catholic health system with 19 acute care hospitals and operations in six states—added a quality incentive for primary care physicians and intends to roll out the same program to specialty physicians next year. The health system has participated in the Medicare Shared Savings Program for three years.

Under the new PCQIP program, physicians still can earn a productivity bonus because, after all, Bon Secours is still providing fee-for-service medicine, and volume matters. PCQIP also includes a financial gate, meaning physicians must meet their budgeted volumes before they can participate in PCQIP and try for quality bonuses.

"That was a rude awakening for a lot of physicians who never paid much attention to volume targets, and now they have to meet their budgeted target volumes to even be eligible for the quality bonus," Fortini says. "About 70% of our physicians are meeting their projected budget targets as well as quality indicators and are eligible for the quality bonus." The first bonus payout will be this fall.

More than quality measures

Each of the 250 physicians who met the volume threshold opted to participate in PCQIP and try for the quality bonus.

After passing that financial gate, they must meet the PCQIP requirements to get the quality bonus. The first is citizenship, meaning the physician must attend 75% of all meetings called by Bon Secours for compliance, clinical measures, and other important issues. The physician also must complete 100% of required training for topics such as infection control and HIPAA compliance.

The second PCQIP requirement is meaningful use. Physicians must be eligible for meaningful use in whatever stage Bon Secours is applying, which currently is stage 2. Ninety-two percent of all Bon Secours primary care physicians have successfully attested to stage 2 meaningful use.

Quality measures make up the third requirement. Physicians must meet the applicable ACO measures that are imposed on Bon Secours through participation in the MSSP. Of the 33 measures, seven are related to patient satisfaction, and the others address specific quality benchmarks.

"One we use for physicians is called the diabetes bundle," Fortini explains. "It's five separate measures, but it's an all-or-none bundle. You have to have a certain percentage of patients hit the mark for things like A1c levels and retinal exams. That's a hard measure to hit, getting all five of them."

The PCQIP bonus is a lump sum payable at the end of the fiscal year, and physicians can earn a partial bonus for meeting only one or two of the three requirements. "It's a nice chunk of change. We do it for MDs and DOs, and we offer about 80% of that sum for advanced practice clinicians, our PAs, and nurse practitioners," Fortini says. "That's in recognition that they're delivering quality primary care to this population as well."

Raising the bar

Three years of participation in the MSSP is yielding good results. All ACO measures for the MSSP are moving in the right direction, Fortini says, and Bon Secours is in the 90th percentile for about 70% of them and the 50th percentile for the rest.

"To be eligible for shared savings in the MSSP, you have to hit a threshold of at least the 30th percentile on a national basis," he says. "We're above the threshold for all our measures, and the performance has improved every year as we introduce new tools. Incentivizing our physicians is playing a role in that."

Other measures also are positive. The ED-to-inpatient admission rate, inpatient length of stay, and 30-day readmission rate are all down significantly. Total spend is down 3.6% this year, and with the Cigna ACO, Bon Secours is 8% below market on spend.

Providing the tools

Primary care physicians at Arlington-based Texas Health Physicians Group, which is the not-for-profit physician organization of Texas Health Resources, also are moving toward an annual bonus for quality. The nearly 850 physicians in 250 clinics across Texas must meet 13 quality measures that include breast cancer screening, smoking cessation, and diabetes management, explains Chief Medical Officer Adam Myers, MD, FACHE, CHCQM, CPHRM.

If the physician achieves the quality measures, he or she can earn a bonus of up to 15% of his or her annual salary, Myers says. To help the physicians meet their goals, THPG provides resources such as a data analytical tool that allows them to drill down to their own patient care data and identify gaps in care.

"To incentivize physicians into using this tool, we made it a stepping-stone into the quality bonus program," Myers says. "If they don't use the tool, they can't avail themselves of the quality bonus."

THPG is integrating the certified medical home concept into its system, which Myers says will help physicians meet their population health goals. By the end of 2015, 90 of the system's 250 clinics will be certified medical homes. THPG also has a "transition house calls program" that focuses on Medicare Advantage patients, with five nurse practitioners servicing 14 hospitals to visit patients at high risk for readmission. The nurse practitioners visit these patients at home within five days of discharge.

The focus on quality and value also is changing the way THPG recruits physicians. In the past, hiring decisions were based largely on the needs of a particular facility or service line, but now the needs of the community also play a very significant role in recruitment decisions, he says.

Setting expectations

Health system executives have learned that incentivizing physicians is more successful when they have been involved in the creation of the shared savings plan. Myers says his group has tried to get physicians involved from the start. Part of that strategy involved creating a leadership triad at each entity in the group, made up of a traditional administrator, a chief medical officer, and a chief nursing officer.

THPG also created a physician compact, which spells out what the organization and physicians can expect of each other in terms of trying to reach goals for population health management and cost savings. Addressing such topics as professional behavior and clinical excellence, the compact was written by the physicians. Adhering to the expectations in the compact is part of the physicians' contracts and the credentialing renewal process.

Physician contracts have changed in response to quality-based compensation structures, notes Daniel Varga, MD, chief clinical officer with Texas Health Resources, which reported total operating revenue of $4 billion in fiscal year 2014. The bar has been raised in terms of quality expectations from physicians.

"We're moving now toward a model in which we treat the expected performance as a threshold and as a gateway to any sort of incentive payment," Varga says. "Instead of paying you for doing good-quality work, we're saying that's expected and you don't get incentives unless you provide reliably
good quality."

To that end, all physicians employed or contracted with THPG must complete high-reliability training and demonstrate competency in high-reliability principles, Varga explains.

Success brings more physicians

Lodi Health in California is launching a shared savings plan with its orthopedic surgeons to motivate physicians to work toward lowering the cost of their surgical cases, after experiencing the physician reticence that is common in health systems. Vice President and Chief Financial Officer Terry Deak says the goal is to create a collaborative environment in which physicians have a new interest in understanding cost in relation to outcomes and working together to design more standardized care.

Lodi is a nonprofit health system in the process of joining the Adventist Health system. The California attorney general approved Lodi Health's affiliation with Adventist Health in May, paving the way for completion of the transaction. Adventist Health operates 19 hospitals on the West Coast. Lodi Health operates an inpatient hospital, five primary care practices, and 12 specialty practices.

Lodi has been involved with the Bundled Payments for Care Improvement Initiative since October 2013 for total joint procedures, DRGs 469 and 470. Currently in Model 2 with CMS, Lodi is responsible for the value of care for 30 days after the procedure, benefiting if the cost of care comes in under the CMS benchmarks and losing money if it doesn't. Lodi came out ahead for four quarters in a row ending in September 2014, the latest period for which CMS has provided results.

The health system has not done any gainsharing with physicians up to this point, largely because there was only one orthopedic surgeon who was enthusiastic about the program, the rest showing no interest or skepticism.

"They're starting to show some interest now that we've had several quarters of success and we're actually getting some money from CMS above and beyond the regular payment for doing the procedures," Deak says. "I think they're going to come on board with the gainsharing plan fairly soon."

A new orthopedist joined Lodi recently, and was eager to market his practice rather than wait on referrals. He embraced the concept, giving the health system two physicians willing to work with the clinical guidelines and goals that help Lodi benefit from a value-based payment model, Deak explains. Two other orthopedic surgeons remain reluctant to take part, and Lodi is still responsible for the metrics of their patients 30 days postop. Deak says the health system has been successful even without those physicians hitting their marks because their volume is not as high as the other physicians'.

"We're getting good press and word of mouth around town because of that success, and people are now starting to see these two doctors who are really heavily engaged in the program," Deak says. "They're getting much more volume than they used to, and more volume than the other two orthopods. I think seeing that has to encourage more physicians to do the work and reap the benefits."

The gainsharing program under development at Lodi may include other postacute providers in addition to physicians, such as skilled nursing facilities, he says. Lodi is looking at other bundled payment initiatives and DRG groupings, but Deak says he would want to bring physicians on board earlier so they can help design the program and take ownership.

"Physician buy-in is critical. If you can't get the doctors on board, it's going to fail," he says. "It's going to be easier when you're talking about a small group of physicians, because if you have 10 different physicians, it's going to be hard to get them all on the same page and moving forward."

Reprint HLR0915-5