What's behind WellPoint's pay raise for primary care doctors?

Hoping to save money by curtailing more expensive care, the health plan is offering an average of 10% more than current fee schedules.

By — Posted Feb. 13, 2012

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Health insurers have been busy the last several years talking about how best to promote the use of primary care. Now the country's second-largest health plan has promised what some physicians say has been lacking from other efforts: a pay raise for primary care doctors.

Indianapolis-based WellPoint announced in January that it planned to give primary care physicians a roughly 10% increase in pay and a chance to share savings that stem from improved outcomes for their patients. It plans to roll out the primary care pay raise market by market beginning in the fall, said Jill Hummel, vice president of payment innovation at WellPoint.

"If we want to drive transformation within primary care, we need to pay primary care [physicians] fairly for the new activities we're asking them to do," she said.

Some of the 10% represents an increase for specific services that are already paid. In addition, WellPoint will start reimbursing for tasks that aren't currently paid for, such as care management for chronically ill patients.

A study in the Journal of General Internal Medicine in January 2011 found that primary care physicians spent about 20% of their day on care management tasks that are mostly unpaid.

It's that kind of work that Eugene Heslin, MD, refers to as the "intellectual" rather than "procedural" side of medicine. He is a member of the American Academy of Family Physicians and runs a large primary care practice with five other physicians in Saugerties, N.Y., that is certified as a Level 3 patient-centered medical home by the National Committee for Quality Assurance.

"Primary care physicians have been under-reimbursed compared to the responsibilities they are asked to handle," Dr. Heslin said.

Other insurers also have talked about their support for boosting primary care as a way to reduce emergency room visits and control health care spending.

Aetna, for example, announced Jan. 30 that it will boost pay for primary care physicians that are certified as patient-centered medical homes, starting in Connecticut and New Jersey. Physicians will earn quarterly bonus payments equal to $2 or $3 per-member per month, depending on the level of accreditation they have earned as a medical home. Aetna spokeswoman Susan Millerick said the program is expected to be in place nationally by the end of 2012.

UnitedHealth Group, the country's largest health plan by membership and revenue, launched its patient-centered medical home pilot program in five states in 2009. It reported an initial 29% drop in emergency room visits, an 11% drop in preventable hospitalizations and 6% fewer office visits for members served by those first medical homes.

The Centers for Medicare & Medicaid Services already has patient-centered medical homes in demonstration projects in progress, and plans to expand those under the auspices of the Center for Medicare and Medicaid Innovation created by the Patient Protection and Affordable Care Act.

Some analysts have attributed the cost of reconfiguring care before any additional payment is available as barriers to physicians adopting the medical-home model. A policy statement released in 2007 by the AAFP, the American Academy of Pediatrics, the American College of Physicians and the American Osteopathic Association in support of the adoption of the patient-centered medical home model called on payers to compensate physicians in recognition of the work necessary to coordinate care.

WellPoint will work around that problem by boosting what it pays for primary care without requiring that a practice become certified as a medical home, but it will require participating practices to adopt "patient-centered practice principles," Hummel said.

"We're trying to reach those physicians that may not have had the ability to transform yet," she said.

WellPoint is parent of for-profit Blues plans in 14 states from California to Vermont. It managed benefits for 34.3 million people at the end of 2011. Hummel said the company already has nine patient-centered medical home pilots, and that the new program will "take those programs on a much broader scale."

Network physicians who want to participate will sign a contract addendum, including a pledge to adopt patient-centered practice principles, Hummel said. That will earn them a boost in pay that will depend on the market but will average about 10% above their current fee schedule, she said. The physician can earn even more through the shared savings portion of the program, which will be calculated annually.

WellPoint is not paying for the program by reducing what specialists make, Hummel said.

The health plan expects to save money when members benefit from patient-centered primary care. That savings will offset higher payments to physicians.

"Specialists certainly continue to play an important role in the system, but we want that primary care physician to re-establish themselves as the captain," Hummel said.

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External links

"Patient care outside of office visits: a primary care physician time study," Journal of General Internal Medicine, January 2011 (link)

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