Surviving in today’s Medicare risk climate

Follow these 10 steps to better results

As more and more payers continue to rethink their commitment to the Medicare risk market (see related story on p. 135 of this issue), some practices may question whether they even want to sign Medicare risk contracts.

Although market conditions shouldn’t scare practices away from signing Medicare risk contracts, it does pay to make sure your practice has the necessary tools in place to make Medicare risk contracting financially and logistically viable, says Charles A. Peck, MD, a consultant with Arthur Andersen’s Atlanta-based health care consulting group.

According to Peck, there is adequate reimbursement today for providers and health plans to operate profitably, provided they properly structure their products and invest in programs that maximize preventive and intervention services.

Based on these concepts, Peck has developed a 10-step method for determining Medicare risk viability, based on the following key points:

1. Improved risk assessment methodology. Twenty percent of the current Medicare population generates 80% of the costs. "That makes it vital in the Medicare arena to identify the most vulnerable seniors in an HMO prior to their accretion into the program," says Peck.

2. Better-trained geriatric care managers and a geriatric assessment team. Seniors require specialized services and increased attention. When they require hospitalization, it is common for their functional status to decline, which then increases their risk status upon discharge. A specialized geriatric team comprising a geriatrician, geriatric care manager, social worker, and pharmacist can help prevent functional decline by aggressively managing the inpatient stay.

3. More disease management programs. "Most providers need a program for congestive heart failure, diabetes, and oncology. Determining which programs to develop can be done by an assessment of the system’s high-volume and high-cost diagnoses," says Peck.

4. More risk sharing. Financial incentives must be properly aligned across all providers for any risk program to be financially successful. "Physician groups that desire to share in upside bonuses must expect to also share potential downside risk," says Peck. However, risk should be balanced to achieve the desired outcome, and have enough upside potential to encourage necessary changes in physician behavior.

5. Strong physician leadership. Simply put, "physician leaders must be capable of making the tough decisions that arise in regard to performance measurement and accountability," says Peck.

6. Strong hospital leadership. "A transformation of values from hard assets to relationships must occur for hospital-driven systems to be successful in the risk environment," contends Peck.

7. Physician- and administrator-friendly reporting tools. Both patient and financial information generated within the practice must be accessible, available, understandable, flexible, and relevant.

8. Physician accountability for controlling outcomes and cost. Agreed-upon practice benchmarks must be followed by everyone with clinical care responsibilities, and key performance measures for physicians must be clearly articulated and followed.

9. Openness to change. Networks launching a new Medicare risk program should seriously consider providing change management training for its physicians and for other clinical and nonclinical employees.

10. Clearly communicated vision and mission. Once change has been confronted, new programs have been put in place, and systems of care have been made consistent across all specialties, the vision and mission of the organization must be clearly and repeatedly articulated by its leaders, says Peck.