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Frequently Asked Questions

These are questions frequently asked about PROMETHEUS Payment® Inc., and the payment model. These FAQs assume familiarity with the basic principles of the payment model addressed in our Publications.

Table of Contents

Who We Are
Design
Payment
Scorecard
Implementation
Contracts/Appeals/Legal Issues

Who We Are
Design of the Model
Payment
Scorecard Design and Application
Implementation
Contracts/Appeals/Legal Issues

Who We Are

Who appointed the Design Team and how did this happen?

Robert Galvin, M.D., M.B.A., Director of Global Health Care at General Electric, asked Francois de Brantes in 2004 to convene a group of experts who might work to develop a new payment model. The Design Team consisted of experts in the law, quality measurement, economics, health plan operations, health care benefits, hospital operations, physician operations, and more.

Is PROMETHEUS Payment®, Inc. a profit-making venture?

No. PROMETHEUS Payment®, Inc. is a not-for-profit tax exempt organization.

Who finances the work of PROMETHEUS Payment®, Inc.?

The Commonwealth Fund sponsored the initial work on modeling Evidence-informed Case Rates®. The Robert Wood Johnson Foundation funded a planning grant into the early part of 2008. The Robert Wood Johnson Foundation provided $6 million to fund a three year test of the model with an evaluation in up to four pilot sites [See “Our Funding”]. Some additional monies have been earned from teleconferences and speaking engagements to inform the public about the program.

Design of the Model:

1. Doesn’t this really only favor big integrated delivery systems?

No. Integrated delivery systems could potentially do well under the PROMETHEUS Payment® model but only if they can demonstrate better quality and efficiency in cost of care than other forms of provider groupings. The program’s design, including a fee for service component, should work well for small, nimble and advanced “virtual” groups of providers that come together to manage a patient’s care. It also can be used by otherwise competing providers who gain economies of scale through clinical integration.

Won’t the designers of the “engines” insist that their information be held secret in black boxes?

They may, but not if they want to be officially approved by PROMETHEUS Payment®, Inc. A core principle of the program is to be completely transparent in all processes so that consumers and providers can understand all the underlying mechanics of the program. [See “Our Tenets”]

Most patients won’t fit neatly into a CPG disease category so how will ECRs® account for that?

ECRs® are designed as homogenous clinical groupings that are severity adjusted to account for patient co-morbidities. In addition, multiple ECRs® can be opened for a single patient to the extent the patient has distinct conditions or needs distinct procedures. Patients that are truly complex will not be included under PROMETHEUS Payment®, Inc. until enough is known about how to create ECRs® for very clinically complicated patients.

Clinical practice guidelines are not perfect and often ambiguous. Most are not evidence-based. How can this be a reasonable basis to compensate for healthcare?

CPGs will be used as a starting point to construct the ECRs®. In many cases CPGs are widely accepted and uncontroversial and those will certainly be the initial foci of PROMETHEUS Payment®, Inc. CPGs can provide a transparent basis to determine whether the salient processes have been deployed for the patient’s care, so the Scorecard takes that into account. This use of CPGs also minimizes the risk providers will skimp on care to enhance financial margins. The alternative to using CPGs would be to use historical claims data that reflect current utilization patterns, have no basis whatsoever on evidence of what constitutes good care, and include significant distortions present in the delivery of care today.

Why don’t you design a system that simply pays for an outcome?

Because we can’t price on outcome alone. Outcomes directly affect payment since outcomes are included in the Comprehensive Scorecard. The question answered by PROMETHEUS Payment®, Inc. is what the payment should be based on to begin with. The clinical processes and outcomes included in the Scorecard act as a beacon to focus provider attention, but with the confidence that the amount of money paid for delivering those outcomes is fair and equitable and takes into account the resources required to provide that continuum of clinical processes already determined to be required in accordance with evidence.

Isn’t this just contact capitation in disguise?

Capitation has nothing to do with clinical processes of care. It is an actuarial rate that transfers insurance risk from plans to providers by taking a very broad-based assumption of cost of care across a wide population. Capitation, contact or otherwise, imputes that cost as an average cost for any provider taking the capitated rate. In capitation, providers take the risk that they may have a sicker patient panel than average or that their condition or disease mix can be more unfavorable in terms of resource use per patient than the average. The PROMETHEUS Payment® model avoids this problem by (1) constructing the payment rates in a way that reflects the cost of what is clinically relevant to the patient’s condition, appropriate differentials in resource use by the condition, disease or procedure and (2) adjusting those ECRs® to account for the relative severity of the patients cared for under this system.

Isn’t this like redesigning RBRVS?

No, because there is no fee schedule that institutionalizes the fragmentation of care. To the contrary, by creating clinically homogenous case rates that are linked to a Scorecard, the purpose is to integrate care around the patient’s true clinical needs rather than establishing arbitrary valuations of micro-portions of care. In addition, the type of “cost accounting” in RBRVS had nothing to do with actual cost of the resources necessary to deliver clinically mandated high quality care.

Isn’t this just a P4P program?

No. Most pay-for-performance programs add minor payments on top of the existing underlying payment system whether fee-for-service, capitation, DRGs or anything else. PROMETHEUS Payment® rates are paid per patient treated by participating providers. For those patients and those conditions for which we have ECRs®, the case rate replaces the payment that otherwise applies. There is variable payment based on performance as reflected in the Scorecard and paid from the Performance Contingency Fund pro rata in accordance with the Scores.

All healthcare is local. Isn’t this a drive towards a national defined payment rate?

No, for two reasons: (1) ECRs® will reflect regional price adjustments and regional practice patterns; (2) ECRs® are subject to local negotiation. It is important to note, however, that the PROMETHEUS Payment® model aims to ensure that all patients get high quality care and to reduce the current unjustifiable significant variations in quality and cost.

PHOs didn’t work and physicians didn’t collaborate outside their group practices. Won’t this approach just lead to fights over money among providers?

A bedrock principle of the PROMETHEUS Payment® model is that no one holds a provider’s money unless the provider chooses that approach. Many of the PHO disputes arose because the hospital drove the negotiations, the PHO held the physicians’ money for disbursement, and there were no explicit bases to parse out whose money should be whose. Allocation of ECRs® turns on who renders which part of the CPG, assigned in advance. Still further, because of the impact of the Scorecard, and that 30% of a provider’s scores turn on the behavior of other providers treating the patient, the winners will be those who collaborate in the patient’s best interest.

Aren’t CPGs all tainted because they are paid for by industry?

There is certainly evidence that a significant portion of the financing for drug related guidelines comes from drug manufacturers. While it is true that the pharmaceutical industry has funded the research of many of those who author CPGs, that does not mean the science within them is itself corrupted. Rather, it means that it is important to evaluate the legitimacy of the guideline itself and the science upon which it relies before adopting it. These factors will be taken into account in selecting guidelines to form the basis for ECRs®. There are many guidelines that are available and there is a methodology by which they can be evaluated with respect to the quality of the science within them.

Doesn’t this give physicians insurance risk?

No. ECRs® are specifically designed to avoid giving insurance risk to providers. (1) The base for payment is established by pricing the quantity and range of services recommended by guidelines; (2) ECRs® are also adjusted to account for normal clinical variation (the difference in reaction of patients to certain medications and treatments); and (3) they are severity adjusted. Insurance risk is a probability-based risk that assumes patients are average-on-average.

CPGs have never really been used for much. How can you base a whole payment system on them?

In all systems to date, CPGs have always been somewhat tangential to health care operations. Standardizing care processes to science is now understood both to enhance quality and efficiency. It is unfortunate that guidelines are not used more systematically given the recent findings that many patients do not get recommended care. Basing ECRs® on guidelines is a way of making sure that the negotiated price for delivering good care is based on a reasonable assumption of the level of services that are required to deliver good care. In the PROMETHEUS Payment® model, CPGs are central to determining payment and therefore become a bedrock around which providers can reorganize care delivery for better payment and higher quality care. (See www.uft-a.com)

Who decides what configurations of providers may participate?

Providers themselves. Whether to participate is voluntary. How providers configure themselves is also entirely within the discretion of the providers. Physician groups may join with hospitals or therapy providers or imaging facilities or anybody else they think it would be worthwhile to collaborate with to achieve better results for patients. There is no obligation that these aggregations of providers accept money together but they can if they want to. No one holds the money of any provider who does not choose to be paid that way; and providers are entirely free to self determine their organizational relationships and referral relationships.

This system will only benefit providers who are doing well already. Will it reward relative improvement?

Yes, the Performance Contingency Fund is specifically tailored to reward improvement over a minimum threshold. Providers starting below the minimum will have an incentive to reach that minimum and then a constant incentive to move up the scale to the maximum. The highest quarter of providers can earn additional bonuses too.

How will the PROMETHEUS Payment® model account for payment for care for patients in vulnerable populations who need more resources than those in a CPG?

There are two ways in which ECRs® will be modified to account for facilities that have a specific mission and for providers that, in general, see sicker patients. First, ECRs® will be severity adjusted so that providers seeing vulnerable populations (or populations with more risk-factors and relatively sicker) will get higher ECRs® to manage those patients. Second, all facility costs associated to facilities that have a specific mission (e.g. teaching, disproportionate share) will be adjusted to account for that mission.

Won’t the PROMETHEUS Payment® model ultimately really just exacerbate cost inflation since it is not a cost control technique?

We know we have major problems of misuse, overuse, and underuse in this country. We also know that Americans are getting only fifty-five percent of the services the evidence says they should be receiving. This means that despite rising healthcare costs, there is still a substantial volume of appropriate and necessary healthcare services which are not being delivered. We believe that through the PROMETHEUS Payment® model and the application of guidelines to drive payment, for participating providers, overuse and misuse should be reduced. We do not know whether this resulting correction will result in a net decrease in healthcare expenditures. Cost control alone cannot assure the delivery of appropriate quality in accordance with science. We believe that in the PROMETHEUS Payment® model, the Comprehensive Scorecard tied to the ECR®? and the Performance Contingency Funds will act as a regulating agent, explicitly encouraging the efficient use of resources to deliver better outcomes.

This model depends on the use of evidence-based medicine as the basis for delivering health care. While this is laudable, there are many common treatments in use today which have not been subjected to rigorous assessment of their efficacy. Would all of these treatments be denied payment?

No. PROMETHEUS Payment® Inc. intends to ground payment on a foundation of the best science available. While true evidence-based guidelines are the preferred choice, good clinical practice guidelines based on consensus are also eligible for inclusion as a basis for payment, even though their evidence base may not have been subjected to randomized controlled clinical trials or rigorous assessment. The case rates are informed by evidence in CPGs (“Evidence-informed Case Rates®”). Because most CPGs are not designed for payment, ECRs® are modeled to include resources not usually accounted for in most payment models like patient registries and use of mid-level providers.

How did PROMETHEUS Payment® Inc. select the first conditions to model as ECRs®?

The Design Team felt it was important to select a range of conditions which would have sole focus on ambulatory/primary care, (diabetes in primary care, depression in primary care, preventive services), some which would be very bounded around procedures (knee and hip replacements), others which represented conditions where multiple providers would be involved but the diagnosis was straightforward (colon cancer), and finally some where the diagnostic workup is critical and the patient must draw on a full range of providers (acute myocardial infarction, non-ischemic congestive heart failure, mitral valve regurgitation.

When we began working with the databases of claims we had available, we found we had to change our focus because of the limitations of claims data. For example, there is no way to find staging of cancer in claims. It is very difficult to find data on preventive services or depression. As a result we shifted our attention to other high volume conditions which would incorporate the principles we needed regarding ambulatory focus, acute care, and longer range treatment over a continuum of providers. The ECR® starter chronic conditions are: (1)diabetes; (2) congestive heart failure; (3) COPD; (4) asthma; (5) coronary artery disease; and (6) hypertension. For acute conditions, the ECRs® starter set includes (1)AMI; (2) hip and knee replacements; (3) CABG; (4) coronary revascularization heart cath; (5) bariatric surgery and (6) hernias. (Rev. 6/08)

Who selected the CPGs that form the basis for ECRs®?

Working groups of oncologists and practice managers, primary care physicians, cardiologists, and orthopedists selected the initial guidelines. Preventive services were modeled around the Preventive Health Services Task Force recommendations. The Institute for Clinical Systems Improvement guidelines for treatment of depression in primary care and diabetes were selected for those diagnoses. The National Comprehensive Cancer Network guidelines on colon cancer were chosen, and the American College of Cardiology-American Heart Association guidelines for the cardiac conditions were selected. There were no guidelines to look to for the knee and hip replacements but the involved orthopedists had no difficulty agreeing immediately upon what the appropriate services would be. When we changed the conditions we would model, we went back to the same sources and types of sources for guidelines on relevant conditions. As it is published, each ECR® states the clinical practice guidelines upon which it relies. (Rev. 6/08)

Payment:

How will the physicians be paid if what is in the guideline is contraindicated or there are other valid reasons not to provide it?

Once an ECR® has been negotiated, a physician (or any care provider) is free to manage the patient in any way they deem appropriate. If the provider does not deliver what he bargained to do, and his score lowers his payment, if the missing intervention was contraindicated, this will be appealable.

If this system pays the cost of delivering care, then doesn’t the withhold automatically mean that the provider is losing money?

No, because ECRs® are constructed with an explicit profit margin. To the extent that the provider is charged on the Contingency Fund for failure to provide some element of care, then he didn’t incur that expense, so he loses nothing. On the other hand, providers who deliver excellence will, in fact, receive more than the ECR®, and therefore generate even more significant profit margins.

How does this model prevent providers from skimping on care since the ECR® is a fixed rate?

First, ECRs® take into account normal clinical variation and are risk adjusted for co-morbidities. There is no reason to skimp since legitimate, necessary resources to treat more complex patients will be taken into account in the payment. That said, the Performance Contingency Fund (10% for physician; 20% for hospitals and other providers) is payable only if the provider reaches a minimum threshold of performance. Providers who consistently fall below that threshold will lose the right to be paid under this model.

How is integration of non-participating providers to be handled?

Non-participating providers continue to be paid under current payment methods. The cost and quality of care they deliver is included in 30% of the provider’s scores in the Comprehensive Scorecard. The Design Team believes providers actually stand to make significant profit margins while non-participating providers will only receive their regularly contracted fee schedules.

Must a provider who has indicated a willingness to participate be paid this way for all patients with that diagnosis?

Yes. Once a provider decides to participate in the PROMETHEUS Payment® model, all patients with the condition in the ECRs® paid for by a participating health plan will be paid in this way. This is to avoid the potential for cherry-picking patients. Providers are protected from insurance risk through two mechanisms: (1) ECRs® are severity adjusted, and (2) ECRs® have fail-safe “breakers” that insulate the provider in the event a patient turns into a “catastrophic” case.

How will this system take into account ancillary and mid-level providers such as physical therapists, nurse practitioners, nutritionists and dieticians?

All care along the normal continuum is explicitly included in the ECR®. The ECR® is indifferent to which type of provider renders contracted for care as long as everyone is licensed or authorized under state law to do what they do. The model is designed to reward the highest and best use of all clinicians. These decisions regarding how the care in the CPG is delivered are entirely within the discretion of participating providers. In modeling the ECRs®, visits are used as a surrogate for time. How providers choose to implement their care to achieve good scores is entirely discretionary for them. They might use e-mail communication, group medical visits, telephone communication from nurse coordinators, reminder programs, nutritional counseling, educational materials and more. The ECRs® use claims data regarding physicians in the ambulatory setting as modified by the relevant cushions. How provider groups actually render the care is not directed by the payment model to provide flexibility to achieve good outcomes. (Rev. 6/08)

What happens when two providers seek to be paid for the same portion of the ECR®?

If they cannot agree between them as to who was managing which portion of the care, neither will be paid under the ECR®, and they will both be paid under their existing contracts. This will further motivate explicit clinical collaboration, upstream and downstream.

How will co-pays work?

Co-pays, co-insurance, deductibles and any other benefit design provisions in the health plan will continue to apply. Plans which adopt the PROMETHEUS Payment® model will decide how to make co-pays consistent with PROMETHEUS Payment® principles. Participating plans are encouraged to experiment with benefit design provisions to encourage plan members to seek care preferentially with top performing providers.

How do you get paid for care before the diagnosis is established?

Prior to an ECR® being triggered, care is paid as usual.

What happens when the patient presents for a visit that is part of the ECR® and reports a symptom that is unrelated to the ECR®? (E.g. a patient being monitored for diabetes presents with a respiratory infection?)

The services associated with the unrelated symptom would be excluded from the ECR® and paid for separately.

How will this result in more money to physicians?

The modeling of ECRs® has five explicit cushions of additional dollars built into them. (See “Making PROMETHEUS Payment® Rates Real”) Because we are taking 50% (in the first modeling) of monies currently spent on potentially avoidable complications, and paying them to providers, there is a significant shift in where the emphasis in clinical treatment will lie. Where data demonstrates underuse in comparison with guidelines-based care, additional dollars will be available to good providers. Still further, since ECRs® are global case rates that cover all care associated with a condition, disease or procedure, and also have an explicit profit margin built in, physicians who manage care well keep the difference between the actual cost of delivering care and the case rate. Moreover, while physicians who over-utilize resources may experience reductions in revenues, changing their practice to reflect CPG based care will lower their expenses and thereby increase their margins. This is an important PROMETHEUS Payment®, Inc. goal. (Rev. 6/08)

Are physicians better off being paid a monthly prospective payment or fee for service?

In the early years of implementation it is too difficult for plans to change to this model and too risky for providers to be paid this way. Until there is enough experience with the ECRs® to know that they are fairly constructed, it is better to continue to pay fee-for-service with a reconciliation based on Scores at the end of the year (or the end of the ECR®) against the full case rate budget. Later, the key to this choice will be how well a physician’s practice manages its expenses and knows what it costs them to treat a patient for a specific condition. Prospective payment, particularly on chronic care, offers more even, predictable cash flow. Then any amounts held in the Performance Contingency Fund are paid on the basis of scores in a reconciliation. Fee-for-service payment may be more familiar but 10% or 20% of each fee is held back to fund the Performance Contingency Fund. Physicians who score well will get all that money back, plus any additional difference between that amount and their negotiated portion of the ECR®, but not until scoring reconciliation. In the first two years of testing, there will not be prospective payment or withholds to avoid undue financial risk to providers, and the PAC Pools will fund the withholds and be paid in accordance with scores. (Rev. 6/08)

Claims data only reflects payment to do something. How can an ECR® take into account the value, in quality and efficiency terms, of not doing something?

ECRs® are constructed using CPGs as a foundation and claims data are only used in year one to create rates for services that are recommended as part of the CPG. For example, watchful waiting - a form of not doing something else – requires doctor-patient interaction to be effective. This will be paid for. Recognizing the artificially depressed fee schedules that are reflected in claims, we have built in multiple explicit “cushions” (i.e. more dollars), than pure claims data would allow. In addition, the payment of remainders from unallocated Performance Contingency Funds will further reward the top performing 25% of providers who may well be doing less than their peers while achieving better results for their patients.

Who will determine what it costs to provide the care in the CPG?

In the beginning, the process of converting CPGs to ECRs® follows three steps: (1) determine the level of services that are recommended by guidelines; (2) define a typical case including typical clinical variation and the dollars associated with the range of resources to meet those clinical needs; and (3) apply a unit price to those services to construct the base ECR®. ECRs® are then adjusted to include an explicit profit margin, as well as a proportion of current expenditures for potentially available complications, and finally, they are severity adjusted. After this process, plans and providers are expected to negotiate around costs that may not be captured in these three steps. Eventually, we hope more sophisticated provider cost accounting to reflect truly the resource costs to render clinically relevant care will be developed to provide a better basis to negotiate ECRs ®. (Rev. 6/08)

How is clinician time taken into account in determining cost?

Today, only FFS payment attempts to account for physician time, and that accounting is embedded in all CPT codes, but also especially in visits. In the PROMETHEUS Payment® model, initially, office visits, the cost of medication, and ancillary services are priced using historical claims data with our “cushions” adding money back. Over time, it is our expectation that providers will establish their own internal cost-accounting processes and will be able to negotiate ECRs® with a full understanding of what it actually costs them to deliver the care including clinician time. As a starting point, the current price of office visits and any other care provided will be determined using claims data.

What happens when a new medical innovation is introduced in the market? Will ECRs® have to be continuously re-calibrated?

Yes, ECRs® will have to be recalibrated regularly (at least once a year) to account for two factors (1) introduction of new evidence, whether linked to a new technology or not; and (2) the actual experience in the market which will lead us to observe the actual costs and quality of top performing teams.

Won’t basing payments on CPGs stagnate innovation? What happens when new evidence or experience suggests that the current guidelines are no longer suitable? What will be the process to evaluate that evidence or experience?

See answer above. In addition, PROMETHEUS Payment®, Inc. will establish a formal process to evaluate new evidence or changes in guidelines and made transparent to all by the design team. Any changes will be reflected in the ECRs® as soon as possible.

How can claims data used in the first year to define ECRs® accurately reflect the “cost” of care?

At the outset, unfortunately, neither plans nor providers have credible, nor accurate, data regarding the actual costs associated with delivering specified clinical care as articulated in a CPG. Consequently, in order to begin a new payment process, some basis to price a guideline equitably must be used. In “Making PROMETHEUS Payment® Rates Real: Ya’ Gotta’ Start Somewhere” we explain how we used national claims databases with millions of patients in 2005 and 2006 and built in cushions to both accommodate care in accordance with science, underuse, appropriate use, and took half the money currently spent on Potentially Avoidable Complications, and allocated it to providers. This approach takes the place of the Performance Contingency Funds, which we will use when the PAC Pools dwindle as a result of more appropriate care and more avoided complications. This pricing will, admittedly, not reflect true costs in an idealized frame of reference. We are encouraging providers and others to work on the problem of developing more sophisticated techniques of cost accounting so as to enhance the legitimacy of the ECR® pricing exercise, in the future. (Rev. 6/08)

So a provider is really only at risk for the 10% or 20% of the portion of the ECR®the provider contracts to deliver?

Yes, but half the money is paid back for quality scores and half for efficiency. No provider can be paid the half for efficiency if they don’t meet the quality threshold. This prevents skimping on care. In the early years, the PAC Pools will substitute for the Performance Contingency Fund withholds and those monies will be paid in accordance with scores as reported in the Scorecard. (Rev. 6/08)

Where do the bonuses for the top 25% come from?

Not all providers will earn back all of the money in their Performance Contingency Funds. The half allocated for efficiency is kept by the plans because they have the risk of the providers’ overuse or referral to less efficient providers. Any monies not paid from the funds for quality are shared among the top 25% of providers.

If you shift monies today to give providers additional dollars from monies currently spent on Potentially Avoidable Complications (PAC) what happens to those patients who have those complications today? Will there be payment for those cases?

Of course, those hospital admissions and complications will be paid. The ECRs®, which reflect the severity of the patient’s condition, take into account complications created by inadequate care of years ago.

But then, won’t it be many years before you see actual practical effects of shifting the money currently spent on potentially avoidable complications to the delivery of care to prevent those complications?

Some effects from this shift to better care will be seen very quickly. Readmissions within thirty days of discharge for the same condition can be lowered rapidly when there is a real reason to pay attention to the level of this problem in a specific setting. Hospitals and physicians who participate in the PROMETHEUS Payment® program for the conditions modeled in the early ECRs® will have a good reason to focus some energy there. For ambulatory and chronic care there are short term, medium range and long term potential effects. Diabetics who are admitted today for ketoacidosis will not be admitted tomorrow when the primary care practice can pay for a nurse practitioner to assist patients in more effective self –management while their clinical condition is being closely monitored. When uncontrolled hypertensive patients are better controlled today, some measure of the heart attacks or strokes they might experience in six months or a year will be reduced. Over the long term, the net effect, we hope, will be that improved care produces improved outcomes and fewer patients actually deteriorate clinically as they do today, because they are getting better quality care which is paid for when it should be provided.

Scorecard Design and Application:

How much will the Scorecard weight outcomes as opposed to compliance with guidelines since what happens to the patient is more important than whether the guidelines were followed?

Both aspects of care are measured. The Scorecard is not designed to force providers to strictly adhere to guidelines; but the salient elements of the CPG that define the basis for payment will be measured along with outcomes.

How will patient compliance be accounted for?

There are two key issues that are addressed with respect to patient compliance: (1) the impact of non-compliance on the patient’s health and, therefore, the severity of the case, and (2) the impact of non-compliance on the outcomes of the patient and the quality scores attributed to the provider for that patient.

Non-compliant patients can exacerbate their health status which will lead to higher patient severity. The ECRs® are designed to adjust for patient severity and allocate additional resources to providers to manage those patients. That said, while there is some evidence that patient insurance status and other socio-demographic factors are correlated with non-compliance, there is also some evidence that despite these factors, providers can significantly improve patient outcomes through good patient care and management. With the allocation of additional dollars from the PAC Pools, physicians being paid $300 a year today to manage a controlled non-insulin dependent diabetic might be paid $2300+ under our model. This shift of dollars provides physicians with an opportunity to deploy new techniques to encourage compliance that they cannot afford today, whether more patient educational materials, more aggressive follow-up with patients using a nurse practitioner, electronic reminders, or group medical visits. The PROMETHEUS Payment® design gives practitioners complete flexibility to determine what would work best, but also provides the resources in terms of payment to permit change to happen. (Rev. 6/08)
While quality metrics are standardized in the PROMETHEUS Payment® Scorecard, the performance thresholds can and will be adjusted to account for patient characteristics, to the extent warranted. For example, in Medicaid or Medicare managed care plans, there is evidence that achieving high patient compliance is often difficult due, for example, to the barriers to obtaining medication. The same is likely true for commercially insured plan members that don’t have a drug benefit or that have high co-pays or co-insurance that would act as a negative incentive to seeking care. In those instances, the minimum performance thresholds (e.g. % of diabetic patients with A1Cs below 7) will be adjusted. (Rev. 6/08)

Does the Scorecard measure only with regard to who is referred to or also with regard to who refers to the provider?

Both. While an argument can be made that providers should only be held responsible for the downstream care delivered by those to whom they refer, the PROMETHEUS Payment® model encourages clinical collaboration across all providers that care for a patient under an ECR®. For each participating provider (or self-defined combination of providers, e.g. a physician group, a PHO, an IDS, and idiosyncratic aggregation of providers or a solo physician), 70% of the Score is what that provider does. Thirty percent (30%) includes what everyone else does to that patient. This calculation will not be made until providers have access to reports on the other participants so they can choose effectively with whom to collaborate by accepting referrals from them or making referrals to them.

Implementation:

1. What will it cost physicians to do this?

The cost to providers for participating in the PROMETHEUS Payment® system will largely depend on their ability to efficiently and effectively manage the care of their patients, communicate with other caregivers involved in the patients’ care, follow the progress of those patients and succeed on a comprehensive set of performance measures. Clearly, providers need robust clinical information systems to accomplish these tasks on a large number of patients. Some estimates show the cost of these systems and the re-engineering of a practice to truly excel at patient care can be as high as $50,000 for a practice of three to five physicians, but this is widely variable and not specifically reflective of the PROMETHEUS Payment® model which lowers some administrative burdens for physicians, which cost them money. In addition, physicians who otherwise compete, but engage in clinical integration, can realize economies of scale on these issues.

Who will manage the data and to whom is it available?

There will be independent service bureaus that will act as the mechanisms to apply the software engine to the data in claim forms and to the data that populates the Scorecard and determines the payment. Payment will be handled directly by the plans themselves. As close to real time reports as possible will be generated by the service bureaus to produce actionable information on which providers can improve their behavior to enhance their results in the Scorecard. Data regarding other providers participating in the program will be made available so that providers can make effective referral decisions as well as decisions regarding their preferred clinical collaborators in the program. Data regarding performance of providers and plans will be made available to consumers, employers, and patients. Transparency is a fundamental premise of PROMETHEUS Payment®, Inc.

Doesn’t this require massive investment in infrastructure and technology?

Clearly, having a clinical information system would enhance a provider’s ability to manage patients within ECRs®. However, providers that focus on a discrete ECR® (e.g. diabetes) could organize a part of their practice to manage those patients without necessitating a significant investment in infrastructure or technology.

How can this possibly result in administrative burden reduction when most physicians will be rendering care in dual track systems, some on an ECR® and others not?

In the beginning, the principal burden reductions for providers treating patients treated on ECRs® will be no prior authorizations, no concurrent review, no post-payment claims audits, and no certificates of medical necessity. Letting physicians practice without formularies is also possible since the CPGs identify appropriate drugs. Whether physicians choose to continue to document their PROMETHEUS Payment® model visits consistent with E + M bullets is their decision. That said, the transition to this new approach will require administrative changes and new and different administrative burdens. Once the PROMETHEUS Payment® model is implemented though, those burdens will ease. If all relevant payors in a market do not participate though, providers will need to manage multiple administrative processes.

How will regional differences in utilization patterns be accounted for or addressed in this model?

Initially these patterns will be reflected in the ECR® construct. For example, different communities may have different rates of Potentially Allowable Complications which will affect the size of their PAC Pools and therefore the dollars in the ECRs®. However, the Design Team expects that over time these differences will disappear. (Rev. 6/08)

Won’t plans have to pay exorbitant fees to a small group of approved vendors?

The PROMETHEUS Payment®, Inc. Engine specifications will be public and any plan can build their own version without using the PROMETHEUS-approved vendors. In addition, PROMETHEUS Payment®, Inc. will carefully monitor vendors to ensure that they charge reasonable fees that cover the expense of running the Engine and compensate the vendors for their investment in building the Engine. They are entitled to make a profit from their efforts, but only within reasonable parameters and not to increase healthcare costs.

Physicians are not trained to negotiate; won’t this require a cadre of negotiators who will skim money from providers?

Providers are under no obligation to designate a third party to intervene for them. They can continue to be paid by their current plans and still benefit from full participation in the PROMETHEUS Payment® model. If they choose to use a third party to negotiate, that is up to them. They can accept nationally established rates and negotiate nothing. That is their choice.

If Medicare doesn’t pay on this basis, won’t it all be too narrow in its application?

Representatives of CMS have been involved in the design of this program. There is interest at Medicare in this kind of approach but the Design Team believes that working out the pilots for proof of concept and a careful and rigorous evaluation is important before undertaking the complexities associated with a government adopted program, even if on a limited basis. At the same time, pilot projects will test the concepts. Not having all their revenues tied up in an experiment is also an advantage to providers.

Who will really make money from this project?

Providers should experience improved financial margins from reduced administrative burdens, equitable payments rates, and the ability to avoid overused defensive medicine. The service bureaus will make some money from payments by health plans to them to operate the Engine which will allocate the dollars to the relevant providers and integrate the Scorecard data into payment reports to be paid by the health plans themselves. Health plans can expect some mitigation of rising health care costs with regard to services rendered under this system by the reduction of misuse and overuse.

Who has paid to do this work to date?

The Design Team members have all contributed their time in the development of the PROMETHEUS Payment® model. Foundation money has supported part of the development of ECRs®. [See “Our Funding”]

Can other programs copy PROMETHEUS Payment®, Inc.?

The intellectual property of PROMETHEUS Payment®, Inc., while widely available, is copyrighted and trademarked. Other organizations can certainly take elements of the PROMETHEUS Payment® model and adapt or adopt it as their own, but they may not call it PROMETHEUS Payment® or claim they are doing PROMETHEUS Payment® unless they have a license from PROMETHEUS Payment®, Inc. for which they will pay nominal fees. PROMETHEUS Payment®, Inc. expects there will be competition in the market, and in fact, we believe we can stimulate further thinking and other ideas by virtue of actually presenting an alternative for critique, refinement and competition.

Why would a health plan do this?

The PROMETHEUS Payment® model will lower some administrative burden to health plans who need not use their medical management systems for the conditions paid for under this program. In addition, the program is both patient-centric and physician-friendly in ways that other payment models have not been. As for customers of health plans, the core stakeholders in health plan operations, adopting a program which meets their needs while potentially ameliorating rising health care premiums can be a significant advantage. The program is established so that health plans do not have to develop significant infrastructure to make it work but can contract with the service bureau to operate the Engine for them. The credibility of health plan payment decisions based on this data is enhanced because the data is managed by an independent organization that is not connected with payment decisions.

Could a health plan do this without PROMETHEUS Payment®, Inc.?

Yes, but they can’t say they are using the PROMETHEUS Payment® model without a license. This assures that all the pieces of the program are deployed as designed. We expect others to design similar or competing models. Plans could develop their own Engines and not contract with a service bureau, but the independence of the service bureau is part of the model as a data safeguard mechanism.

What are the critical success factors for providers under this program?

Knowledge of what it costs to treat a patient for a condition is at the core of a well-grounded negotiation for a case rate. Good clinical collaboration with high-performing providers will enhance providers’ scores since thirty percent of their score turns on what other providers do. Standardizing processes of care, highest and best use of clinicians to deliver the salient elements of the guidelines, engaging effectively with patients to enhance scores on patient experience of care will all contribute to improved results.

Contracts/Appeals/Legal Issues

Doesn’t this require a massive legal infrastructure to implement?

Actually, we believe that relatively simple contract amendments establishing a carve out for the negotiated ECRs® and protecting providers from the inconsistent medical management programs (e.g. profiling, utilization review, prior authorizations, etc.) for the rest of their business are all that is necessary. No new legal structures are necessary to make PROMETHEUS relationships work. Certain groups of providers may choose to formally configure themselves into a network but there is no obligation that this happen. Still further, throughout the country, both loose and tight configurations of providers have already come together for other purposes (e.g. GPOs, IPAs, PHOs) and these may be well positioned to engage with the PROMETHEUS Payment® model.

How will this affect malpractice liability of providers?

Evidence shows that providers who do not follow clinical practice guidelines have a six-fold increased risk of being sued in malpractice. That is not a six-fold increased risk of an adverse event but of actually being sued. By standardizing care, engaging with patients, and following the standard of care in the CPGs, it is our expectation that utilizing the PROMETHEUS Payment® model can lower malpractice liability.

Do the fraud and abuse laws affect the ability to do this?

No one is paid for referrals in this model. Providers are paid for the work that they do in accordance with the rate that they have negotiated. Even under Medicare, which this program does yet not confront, there would not be liability under Stark, the Anti-Kickback statute, or gain-sharing principles.

What is appealable to whom?

Appeals are available to the entity making the significant decision. Plans will be the locus of appeals for payment issues, benefit determination, coverage issues, payment rates. The service bureau will be the locus for data-related appeals including calculation of scores, and allocation of dollars to providers in accordance with their contracted score agreement.

Who holds what contracts to make this work?

Health plans will contract with the service bureaus to operate the Engine. Providers will enter into amendments to their plan participation agreements to establish the new payment model and rates to them. PROMETHEUS Payment®, Inc. will license its intellectual property to the service bureaus and to the health plans who seek to advertise their participation in PROMETHEUS.