Consulting Solutions

In addition to Payer Contracting services, RCG also specializes in the following services: 

Payer Incentive Programs

Although the shift from volume-based to value-based incentive reimbursement is highly touted in recent healthcare literature, little research is available on the subject. The Patient Protection and Affordable Care Act (PPACA) legislation is rife with quality metric performance language and the Center for Medicare and Medicaid (CMS) is currently offering incentive payments for Electronic Medical Record Meaningful Use and for meeting quality targets. Some commercial payers are launching pilots to introduce value-based Incentive programs similar to CMS. Personal experience with medical group incentive payments in New York State is contained in his article “The Golden Payoff for Effective Care Management” (Pulse, Fall 2011, Navigant Consulting).

Value-based incentive programs usually involve some combination of clinical and preventive metrics. Payers tend to develop the metrics and set targets e.g. 75 to 90% provider compliance with female patients in a certain age range needing bi-annual mammograms.  The following incentive program example was provided by a 50 member medical group in upper state New York:

% of patients with a diagnosis of HTN with a BP ≤ 140/90
 Diabetes-adult  % of patients with a diagnosis of diabetes seen two times in the past 12 months
 ADHD-peds  % of patients with a new diagnosis ADHD seen 3 times in the 10 months following initial diagnosis
 Asthma-peds  % of patients with a diagnosis of asthma seen two times in the past 12 months for yearly asthma assessment
 Mammograms  % of female patients aged 50-74 who have had a mammogram in the past 2 years
 Colonoscopies  % of patients aged 50-75 (?) who have had a colonoscopy per guidelines
 Childhood immunizations
 % of patients at age of 2 who have had 4 DTAP/DT, 3 IPV, HiB, 3 HepB, 1 MMR, 1VZV, 4 pneumoccal conjugates
 Well Visits ages 2-18
 % of patients in age range 2-18 who have had a well child visit in the past 12 months


The achievement of these measures, based on meeting 75-90% compliance targets, is projected to yield over $1 million for the group or $20K per physician in 2012. Although the above metrics are designed for primary care providers, payers are currently developing value-based programs for specialists such as cardiologists and orthopedists.

One outcome of the managed care contracting service will be to investigate and report payer plans to offer specialty value-based incentive programs. As a result, RCG will position Contract Negotiation clients to be early stage participants when specialist incentive programs are launched.

The challenge for RCG clients is to construct an infrastructure to track, execute and report the services required to earn the value-based incentives. In the example cited above, the New York medical group uses a dynamic, physician “dashboard” (with input from electronic medical records) to monitor Group physicians achievement of the clinical and preventive measures. Payers verify reported dashboard results with claims data before making incentive payments to the group. Dashboard templates can be designed by RCG consultants to accommodate medical specialist incentive programs.

Accountable Care Organization (ACO) Participation

The PPACA health reform legislation encourages the formation of accountable care organizations (ACOs). ACOs are health entities where accountability is key to achieving the quality and cost benchmarks set forth by the Secretary of Health and Human Services. One distinctive feature of ACOs includes collaboration among providers where physicians and hospitals share both the financial risk as well as the reward for reaching quality and cost goals. 

Even though ACOs are part of the PPACA legislation, participation in an ACO is voluntary. CMS has activated the ACO model with approval of 32 “ACO Pioneer” pilots announced December 19, 2011. Dr. Donald Berwick, former CMS Administrator, has stated ACOs will have a significant impact on how care is delivered and reimbursed in the United States. For example, a required component of ACOs is the ability to receive and distribute shared Medicare savings over a three year period. Dr. Berwick noted that traditional fee for service and Medicare Advantage programs won’t be going away soon. However, ACOs provide an option for providers who are drawn to the idea of enhanced revenue for improved quality of care. It short, the Medicare program is restructuring the healthcare system and commercial payers will no doubt follow CMS’ lead. Aetna, United, CIGNA and many Blue Cross plans already have local/regional ACO pilots underway.

Since RCG clients are mostly specialist groups, it is expected they will not likely take the lead in developing ACOs. However, they may be asked to participate in ACO developments in their service areas. In turn, RCG consultants may be asked to assist their clients in responding to ACO inquiries by educating them about ACO requirements and responsibilities, assessing their capabilities to meet ACO requirements and facilitating ACO participation discussions/decisions. Dr. Schmitt was designated a Subject Matter Expert in ACOs by his former employer, Navigant Consulting.

Bundled Payment Involvement

One of the primary reasons CMS is encouraging medical providers to organize ACOs is to create organizations that can receive and distribute episode-based bundled payments (EBPs). CMS is preparing to pilot numerous EBP initiatives for select conditions beginning in 2013. Starting in 2015, after tracking the 2013 pilot performances, Medicare will implement EBPs for 20% of inpatient services that account for 80% of post acute spending. If the results are favorable, the Secretary of Health & Human Services will submit an implementation plan in 2016 to make EBPs an inherent part of the Medicare payment system in 2018. Actions providers should take in preparation for participating with EBPs are summarized in a 2010 white paper,"Medicare Providers Alert: Bundled Payments by 2013" prepared by Dr. Schmitt while with the Ethos Partners Consulting Firm. 

On August 23, 2011 CMS invited interested providers to apply to help test one of four EBP models. The four models are:

  1. Inpatient stay only (all hospital services incurred during an admission), paid retrospectively;
  2. Inpatient stay plus all post discharge services (hospital, physician and post discharge ancillary services such as physical therapy);
  3. Post discharge services only (hospital outpatient, physician, long term care, ancillary providers, etc);
  4. Inpatient stay only (all hospital, physician and inpatient ancillary services), paid prospectively.

 CMS will make selection decisions in early 2012 and begin the pilots before the end of the year. The implication for RCG clients is that specialists with high quality, low cost, hospital admission rates may be approached by payers or provider groups to participate in EBP initiatives. In turn, RCG consultants may be asked to educate their clients about EBP models, assess their readiness to participate in such initiatives and facilitate discussions with payers and other providers. In a strategic sense, RCG clients should be advised that Medicare is committed to move along a reimbursement pathway away from fee schedules, to incentive models, to bundled payments and eventually to some form of capitation.

Narrow/Limited Networks

A number of commercial insurers are developing new products for local, price competitive markets and upcoming state health care exchanges. The terms “narrow” ,“limited”, “restricted” networks are used to describe an offering that would limit provider choice in exchange for lower premiums-somewhere in the 10-20% range. As providers are approached to participate in such networks they are often reminded of the negative experiences they had with HMO products launched in the 1980s and 1990s. Most of these bad memories are associated with unmet promises, charges of skimping on care and deep discounting. However, the serious and responsible payers constructing these new networks are aware of this history and are focused on building new networks around providers with proven track records of low cost, high quality and documented patient satisfaction. The serious payers are seeking strategic solutions to delivering value-based care to their members. However, there are some short-sighted profiteers only interested in making “hit and run” profits off of discounted provider networks.

The challenge to medical groups considering participation in a narrow/limited network is to make an informed decision in collaboration with the payer making a restricted network offer. Dismissing a participation offer based simply on assumptions rooted in  bad, past experiences would be a strategic mistake. A more objective and responsible approach is to: 1) assess the relative value and operational history (e.g. responsiveness) of the payer; 2) request and review the criteria used by the payer to determine provider participation and 3) evaluate the collaborative spirit of the payer in terms of shared vision, resource commitment, evidence-based reporting, shared savings, etc. If an insurer is a serious force in the market, equipped with a good strategic plan and committed to achieving the “triple aim” of offering consumers a lower cost, high quality and patient-centric product they will likely be a successful competitor. As RCG consultants help their clients negotiate managed care contracts they will be alert to new network opportunities and be prepared to help their clients with participation assessments.

Physician Compensation Models

The emergence of new reimbursement models and value-based incentive payments has motivated medical groups to realign their compensation models. The new compensation plans align incentives with physicians, patients, health system, and payers to reduce healthcare spending and improve outcomes. For this reason the current trend in the healthcare market is moving toward the evaluation of quality metrics in physician compensation plans as an overall percent of cash distribution. For example, production may be weighted at 90% of the target incentive amount and quality weighted at 10%; or the achievement of quality measures may contribute to a bonus amount paid outside of the group’s normal compensation limit.

Targets or goals can be set for designated metrics specific to each specialty or sub specialty. Performance is evaluated based on the metrics and bonus incentives and are calculated and distributed based on the achievement of the goal (or penalties if not met). As medical practices move into ACO or bundled payment models, the complexity and number of data points relating to these metrics will increase significantly. Further, there will be a need to drill down to more granular transaction or patient levels as compensation models become more sophisticated. As RCG consultants help their clients negotiate value based payment contracts between physicians and insurance companies they may also be requested to help develop compensation models to manage the calculation and distribution of new funds within practices.

 Additional Services

RCG consultants may be requested to assist medical practice clients with other managed care services. Such services might include Patient Centered Medical Home (PCMH) participation or certification consulting requested by primary care providers. Since PCMH providers must have contractual referral relationships with a spectrum of medical specialists, RCG clients may request assistance with developing specialty referral protocols and service contracts. Dr. Schmitt has received certification training by the National Committee of Quality Assurance (NCQA) in 2011 PCMH certification requirements. 

RCG clients might also request assistance with new organization developments. As discussed earlier, IPAs and MSOs are popular contracting models that have emerged in renewed popularity as part of  the new healthcare reform landscape comprised of quality incentives, ACOs, and bundled payments.

Reliance Consulting Group, LLC
  5077 Kingsbridge Pass | Ste. 100
Powder Springs, GA 30127