It was inevitable, really: insurance giant WellPoint has announced it will raise rates for primary-care providers by 10 percent and add a reimbursement code so that doctors can be paid for creating and maintaining care plans for their patients with chronic disease. Just the first step, we're told, in a new contracting-for-care-management strategy that hopes to transition large numbers of PCPs to do medical home-style care coordination for certain types of patients.

Aetna has announced much the same thing, adding $2 to $3 to monthly physician fees for primary-care doctors whose practices are certified as patient-centered medical homes and provide care coordination, provision for 24-hour patient access, and responsibility for a patient panel. That move makes sense for Aetna, which is a second-tier player in most markets and must keep providers happy.

But now WellPoint, with its unassailably dominant market position and correspondingly low provider reimbursement rates, felt it had to offer primary- care physicians higher pay across its vast network to speed the evolution of primary-care practices away from fee-for-service.

Why spend that kind of money to raise PCP pay in areas where your Blue plans have such huge market share.

  1. Beginning in 2014, health plans won't be able to deny coverage to people just because they have diabetes or price-out unhealthy groups by charging huge premiums based on the group's health risk profile. That inability to evade risk means that health plans will have to truly manage that risk, and a lot of that management takes place most effectively in the PCP's office.
  2. Most PCPs do not have the IT and information tools they need or the operational capacity to become medical home-style practitioners, and building that capacity takes time, money, and the prospect of real reward for the trouble. WellPoint can't possibly negotiate medical home deals with its entire network, so this strategy attempts to create enhanced fee-for-service as a step toward the medical home model.
  3. WellPoint has done the math, and knows both the downside risk of inaction and the upside potential (public statements are touting 20 percent savings in overall medical cost). PCP spending makes up only about 6 to 8 percent of what WellPoint spends now on medical care, so adding ten percent to that pay is not even a decent gratuity.

So what does this all mean It means that all the medical home pilot programs just got the ultimate validation. It also means that even if the Accountable Care Act is overturned or killed by its political enemies in the future, primary healthcare has evolved on a large enough scale that strict fee-for-service reimbursement will never again be the norm.

It means that PCPs will expect to be paid for providing care coordination, and that more of them will be willing to invest in the systems and personnel to make real coordination possible. It means pharmacy compliance will be checked as a matter of routine, and utilization will go up. It means plans will be able to do even more comparative effectiveness research to measure real-world outcomes of pharmaceuticals and treatments.

It means the genie is out of the bottle.

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