Reimbursement and Workforce Issues Hamper Medical Home Implementation

by Candi Helseth

In addition to the absence of electronic medical record systems (see Information Technology Plays Key Role in Medical Homes), declining numbers of primary care providers and skewed reimbursement systems appear to be the greatest barriers for rural providers interested in implementing medical home programs.

The number of primary care providers across the country is waning and shortages are more acute in rural areas. In the patient centered medical home (PCMH), a primary care provider coordinates the patient’s care within the PCMH network.

“Primary care is broken in our health care system,” said Dr. Ted Epperly, president of the American Academy of Family Physicians. “The United States has about 70 percent specialists and 30 percent generalists. Other healthy countries have about a 50-50 mix. It’s only going to get worse. In the last 10 years, our medical schools have graduated 90 percent specialty and 10 percent primary care physicians.”

The reimbursement system contributes to that maldistribution of providers by reimbursing specialists for high cost procedures and reimbursing primary care providers only for office visits. Medicare and managed care reimbursement systems cause physicians to treat sicknesses rather than focusing on keeping patients healthy, Epperly said, noting that primary care physicians receive no reimbursements for “non-sick” care such as patient education, overall medical management, outside office visits, and telephone and email consultations with specialists who may be involved in that patient’s care. Additionally, specialists earn much higher salaries, so that medical students—whose average educational debt is in the $150,000 range—pursue careers in the better paying specialties.

Medicare and most major payers do not yet have reimbursement systems covering PCMHs, but there is hope on the horizon. Medicare and several major payers have implemented PCMH pilot programs to determine care and cost benefits. One of these, the TransforMED National Demonstration Project, has been examining 36 patient-centered family medicine practices from all across the United States and has begun to issue reports on the project.

The analysis of medical homes and the sophistication being applied to looking at various models has dramatically increased in the last year, said Paul H. Keckley, executive director of Deloitte Center for Health Solutions in Washington, D.C. “I’d speculate that in three to five years we’ll see a dramatic increase in medical homes, but we just don’t know enough right now to know how best to do it, how to make adjustments for differences—for instance, rural and urban areas. In rural areas, you have to factor in more variables such as transportation needs.”

The reimbursement pattern itself has begun to shift slightly as major insurers, such as AETNA and CIGNA, have begun test programs that include better reimbursement for PCMH practices, Keckley said.

“The medical home plays a key role in the necessity to change the way services are delivered and the way the payment mechanisms reward performance,” Keckley commented. “We’re already seeing employees who have made changes in their benefit structures. We can expect to see Medicare and Medicaid making changes as well, and others following suit.”

Back to: Spring 2009 Issue