Julian D. ("Bo") Bobbitt Jr., JD

As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”

This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.

But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.

This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.

Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.

A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.

As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”

You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.

It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”

But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.

Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.

The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.

Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.

In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”

Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at bbobbitt@smithlaw.com or 919-821-6612.

As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”

This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.

But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.

This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.

Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.

A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.

As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”

You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.

It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”

But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.

Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.

The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.

Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.

In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”

Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at bbobbitt@smithlaw.com or 919-821-6612.

As readers of this column know, the move to value-based payment for population health management can lead to a golden era for proactive primary care physicians. This conclusion is only strengthened by recent legislation mandating value incentives and penalties: the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), sometimes called the “SGR fix.”

This radical change, tellingly supported by both parties and both houses of Congress, would have been unthinkable just a few years ago. Under MACRA’s new Merit-Based Incentive Payment System (MIPS), you are looking at fee increases or reductions ranging from an upside of 4%-9% over time and an equal potential for reduction.

But, if you participate in a Medicare ACO or similar entity under the new alternative payment model, you get a 5% bump and are excluded from any MIPS and meaningful use requirements or penalties.

This merely adds to the growing list of incentives for primary care physician–led coordinated care. There is an extra compensation for wellness exams and chronic care management amounting to potentially more than $100,000 per primary care physician per year. Do not forget the $840 million the Centers for Medicare & Medicaid Services is designating to the Transforming Clinical Practice Initiative limited to training clinicians, and the $800 million for rural accountable care organizations (ACO) operations costs limited to physicians, critical access hospitals, and small hospitals.

Oh, by the way, all of the high-value opportunities for ACOs are in the primary care physician’s wheelhouse. Success stories of primary care–led ACOs are impressive.

A no-brainer, right? Well, apparently not for most primary care physicians. Why? This all will require change. It can be a very beneficial change of your status – measured by professional and financial reward – but it is big-time change.

As Mark Twain is quoted as saying, “I’m all for progress; it’s change I object to.”

You have not been in such a position of influence before, you don’t have teams of advisors like others in health care, and you don’t have the experience for this. You do not have spare intellectual bandwidth to deal with this and everything else. You are accustomed to things being run by the big health systems and managed care companies.

It is human nature to deal with stress with the survivalist instincts of fight, flight, or freeze. You may be feeling an almost irresistible urge to hunker down and do nothing. It’s natural. It is your “default future.”

But being unprepared is not an option. This shift is coming inexorably and rapidly. You can either stay sitting on the tracks or drive the train. It’s up to you.

Your default future is one controlled by others. It is one of the missed opportunity of a lifetime for primary care. The government is paying you for training, ACO start-up and operations, and incentivizing your leadership through both coding- and value-based financial inducements.

The bottom line is that America is asking you to run the new health care system and wants to pay you to do it, on top of your fee-for-service payments.

Think of the impact on your patients. Isn’t this why you went to medical school? Failure to do anything means you actually have made a bigger choice for your default future – guaranteeing even greater change being imposed on you by others. Control your agenda; do not wait to become part of someone else’s.

In closing, a recent email comment by one of your fellow readers sums it up best: “The default future (or the ostrich option) is a destiny of marginalization and consumption by the beast, an outcome not in our patients’ best interest.”

Mr. Bobbitt is a senior partner and head of the health law group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. For additional information, readers may contact the author at bbobbitt@smithlaw.com or 919-821-6612.

Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.

Why is that the case?

ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.

Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."

• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.

• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.

• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.

• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.

• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.

These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.

Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.

Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.

Why is that the case?

ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.

Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."

• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.

• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.

• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.

• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.

• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.

These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.

Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.

Even by conservative predictions, patient quality of care will improve significantly under Accountable Care Organizations, while saving Medicare millions of dollars. And, by some estimates, primary care incomes will double.

Why is that the case?

ACOs are designed to motivate providers to follow evidence-based practices in the management of patient populations. Total expenditures for that population are tracked and, if there are savings relative to an unmanaged population, providers typically will receive about half of the savings.

Of all the possible ACO initiatives that could deliver value, five represent the highest-impact targets that are expected to deliver the biggest and earliest bang for the buck. Primary care will likely thrive under ACOs because all five targets are in the specialty’s "sweet spot."

• Prevention and Wellness – This is the clearest example of health care’s shift from payment for volume under fee for service, to payment for value under accountable care. Of course, you’ve always seen the cost-saving impact of making and keeping people healthy; the sicker a patient becomes, the more money providers make treating sometimes quite avoidable issues. Now, with a shift toward managing the total costs for a patient population, successful prevention and wellness will be tied to powerful economic rewards. Primary care physicians will now be paid to spend that extra time with patients, to do more follow-up, to build a medical home, and to influence healthy lifestyles.

• Chronic Disease Management – Chronic disease now represents some 75% of all health care spending, and much of it is preventable. For Medicare, it is an even greater percentage. According to a recent report by Forbes Insights, in 2005, an average patient with one chronic disease cost $7,000 annually $15,000 with two diseases, and $32,000 with three. Chronic diseases are complex, harder to reverse, and involve more specialists, but primary care-driven care coordination is still key.

• Reduced Hospitalizations (ER Avoidance) – It is important to make clear that this refers only to avoidable hospitalizations. Lifestyle-related chronic diseases drive many avoidable admissions; lack of prevention or coordination of care drives others. Primary care can reduce hospitalizations through a sound emergency department diversion policy for non-emergencies. Establishing a physician-patient relationship will help the patient avoid using the ED as a default primary care office.

• Care Transitions –A fundamental premise behind the medical home concept is that it helps coordinate care by helping patients navigate through the system that heretofore consisted of fragmented segments. Care transitioning is not the sole province of primary care medicine, but the medical home’s ability to help transition patients and coordinate their care will be a significant factor in ACO success.

• Multispecialty Care Coordination of Complex Patients – These are the patients who consume a hugely disproportionate share of health care dollars. Early ACO activity suggests that if the ACO has a medical home component, it serves as the organizational hub for care coordination for complex patients, with enhanced administrative support by the ACO’s informatics center and an increased role of select specialists. The patient is assigned to a coordinating physician who ensures that there is an appropriate care plan. Pharmacy, specialists, home health, physical therapy, and case management services are all coordinated for the complex patient pursuant to the plan.

These five targets are the proverbial "low-hanging fruit" for ACOs. Primary care has the opportunity, and oftentimes the necessity, for significant involvement in all of them. It is no wonder that primary care physicians are essential for ACO success. ACO compensation, say through shared savings, is designed to incentivize and reward those who follow best practices and who generate the savings. Thus, primary care should experience not only deep professional rewards from having the tools and teammates to positively impact so many patients, but also significant financial rewards. A physician approached by an ACO can evaluate its likelihood of sustainability and its appreciation of the role of primary care, by comparing its initiatives against the top five ACO targets described above.

Mr. Bobbitt is a senior partner and head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He has many years’ experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice. Contact him at bbobbitt@smithlaw.com.