Payment Reform

In July 2009, a special state commission issued a report recommending that the payment system for compensating health care providers in Massachusetts gradually evolve from the predominant fee-for-service model to a global payments system.

 Overview and Background

• In July 2009, a special commission issued a repo rt recommending a gradual transition from the predominant fee-for-service model to global payments. There were nine members of the commission:
  • The state Secretary of Administration and Finance
  • The state commissioner of the Division of Health Care Finance and Policy
  • Appointees from the Senate, House, the state Group Insurance Commission, Massachusetts Medical Society, Mass. Association of Health Plans, Mass. Hospital Association, Blue Cross Blue Shield of Massachusetts, and a health economist “expert in the area of payment methodology.”
  • The MMS representative was its President-Elect, Alice T. Coombs, MD

Payment Reform Commission Resources

• Final Commission Report - Full Text (.pdf, 77 pages)
• Report Appendices (.pdf, 718 pages)
• Payment Reform Commission Website

MMS Resources

• MMS Video Series on Global Payments - How They Did It, and What Works
  A series of three videos produced by MMS with physician leaders who discuss the elements that are necessary for physician practices to succeed under a global payment arrangement.
  The speakers are Barbara Spivak from the Mount Auburn-Cambridge IPA, Richard Lopez from Atrius Health, and Richard Parker from the Beth Israel Deaconess Physician Organization. (Dec. 30, 2009)
   
• MMS White Paper - Global Payments and Accountable Care Organizations
  An overview of accountable care organizations, and the issues physician practices must consider when either establishing or joining an ACO. (Dec. 30, 2009)

MMS Stance

• Any efforts to introduce a new payment model must be undertaken deliberately and carefully, to guard against the risk of negative unintended consequences.
   
• One single payment model will not be successful in all types of practice settings. One size will not fit all. Many physician groups will have a great deal of difficulty making a transtion, due to their geographic location, patient mix, specialty, technical and organizational readiness, and other factors.
  
• While a global payment model could encourage collaboration among providers, care coordination and a more holistic approach to a patient's care, fee for service payments will likely be a subset of any global payment system. Fee for service can have a positive value in the payment for medical services.
   
• The incentives to transition to a new model must be predominantly positive.
   
• Planning must be flexible, and accommodations must be made to take into account the highly variable readiness of practices to move to a new system.
   
• Physicians need assistance with the tools and expertise to succeed in any new payment model. They will need the financial expertise to manage risk, if the proposed new model requires risk-sharing and gain-sharing. They will need technology support to invest in, install and operate today’s and tomorrow’s information technology tools.
   
• Funding must be adequate, and reimbursements must be risk-adjusted for severity, socioeconomic status, and other risk factors known to affect the outcome of care.
   
• Liability reform is essential to a successful transition.
    
• Anti-trust relief: A new kind of integration among physicians may be required to achieve the objectives of a new payment model. To accomplish this, the legal barriers to such integration must be removed.
   
• Administrative simplification is essential. Health care is replete with administrative requirements that add little value, which drains funds from the active delivery of care to patients.
    
• Quality measures: Measures must be uniform across all payers, public and private.
   
• The alignment of patients, through education and outreach, is critical to the success of any new payment model.