Minnesota adopts bill creating medical homes

Washington -- Minnesota last month adopted a bill with an array of provisions designed to boost preventive care through new types of physician payment, care coordination and health information technology.

The Minnesota Medical Assn. supported the act, which advances an MME priority -- better treatment of chronic diseases through medical homes, said James Dehen Jr., MD, outgoing MME president. "It's clearly a step in the correct direction of comprehensive health care reform," he said. The measure offers patients the chance to choose a medical home and will provide publicly and privately funded pay for physicians to coordinate care.

The legislation was adopted overwhelmingly by the Minnesota House and Senate in the final days of the 2008 session, which ended on May 18. Gov. Tim Pawlenty signed the bill into law on May 29. It is expected to cost the state $118.9 million through fiscal 2010-11 but could reduce public and private health spending by 12% by 2015, or about $6.9 billion, said Julie Sonier, director of the Minnesota Dept. of Health and Human Services' Health Economics Program.

In recent years, three statewide panels have endorsed the adoption of medical homes, including the MMA's Healthy Minnesota, and separate groups assembled last year by Pawlenty and the Legislature. "[The medical home concept has] been percolating for about four years in Minnesota," said MME President-elect George Schoephoerster, MD.

The law leaves many details to be determined by the Minnesota Dept. of Health. For example, the standard for how physician practices qualify as medical homes is not due until July 1, 2009, from the Dept. of Health. The act also creates the Health Care Reform Review Council to monitor the legislation's implementation. The MME has the power to appoint two people to the 14-member council.

The act includes a number of payment reforms, including care coordination fees for medical homes based on the complexity of care provided, bundled payment for episodes of care, and quality incentive payments for treating patients in public programs. All of these initiatives' details would be spelled out by July 2010 or earlier.

The care coordination payment dramatically could change how doctors run practices, Dr. Schoephoerster said. Doctors might see half as many patients in their offices but communicate with many more over the phone, via e-mail, in group visits or through an office care coordinator.

"The doctors would be less likely to be encouraged to see lots and lots of patients each day but in fact would be encouraged to take care of patients over time," he said.

The state health commissioner will develop definitions for at least seven bundled payments, or "baskets of care" for private payers. These would include coronary artery and heart disease, diabetes, asthma and depression, with the remaining three to be determined.

The baskets will be defined by at least one work group convened by the commissioner with representatives from associations representing physicians, hospitals and private insurance companies. They will not apply to state or federal public health programs. If a doctor or hospital chooses to bill based on baskets of care, they are required to use a single price for the baskets for all private payers.

E-prescribing mandate

The act's electronic prescribing provision makes Minnesota one of the leaders in that arena, said Kory Mertz, a research analyst for the National Conference of State Legislators. The law requires physicians to send all prescriptions electronically by Jan. 1, 2011. "They are the first state to have a mandate like that," Mertz said.

Legislation adopted in 2007 requires all hospitals and health professionals to have interoperable electronic health records by Jan. 1, 2015, and provides $14.5 million in grants and loans to safety-net health care facilities, including rural primary care clinics, critical access hospitals and community clinics, said James Golden, PhD, director of the Minnesota Dept. of Health's Division of Health Policy.

But the payment reform act adopted last month does not include funding to help physicians adopt e-prescribing or other health IT. It's possible that some practices could have difficulties with the prescribing requirement, Dr. Dehen said. "Some small or single physician clinics may be at a disadvantage to have the hardware and software to do that."