Doctors praise and pan HMSA’s new payment plan

A new payment model the Hawaii Medical Service Association began rolling out with its primary care physicians in April is being expanded to include alternative reimbursements for specialists such as cardiologists, oncologists and orthopedists.

HMSA, with more than 3,000 physicians in its network, has been paying primary care doctors a fixed monthly rate for each patient in a practice instead of reimbursing them based on the number of patients they see and the number of services they provide, replacing the fee-for-service model.

HMSA’s so-called bundled, or lump-sum, payments for the cost of treating a particular condition and other alternative reimbursement schemes are designed to improve health outcomes and drive down escalating costs. The insurer anticipates that 90 percent of its more than 720,000 members will soon be affected.

The new payment model aims to force doctors to spend more time with patients who need more care while giving them the flexibility to use innovative ways to care for others, the insurer said.

Patients with routine ailments could be encouraged to text, email or call their doctors to get treated over the phone.

Rather than simply treating illness, HMSA wants providers to help patients control preventable diseases and other conditions that can be averted through healthy habits. Patients will likely be pushed by their physicians to keep up with screenings, exercise and make healthier lifestyle choices.

“The goal by 2020 is to try to have the entire state move toward alternative payment models,” said Dr. Mark Mugi­ishi, HMSA chief medical officer. “Cost is one important component, but more importantly, it’s making sure they continue to provide quality.”

Some doctors say HMSA’s new payment model, 80 percent of which is calculated based on a doctor’s average payments for medical serv­ices over three years and paid as a flat monthly base salary, is driving them out of business. Physicians must earn the other 20 percent of their reimbursements by meeting quality measures.

Dr. Pradeepta Chowdhury, a primary care doctor in Hilo, said his monthly reimbursements under the new payment model plunged by nearly half to roughly $11,000 from about $20,000, and he is spending significantly more time on paperwork to meet reporting requirements than in the past.

Providers said they must invest in information technology and hire additional staff to handle the increased paperwork. They are also hiring more aides, care coordinators and social workers to follow up with patients and make sure they’re getting preventive screenings and checkups. Doctors can opt out of the new model, but they would risk losing incentive payments.

“I can’t meet my overhead with $11,000. I have an office, electricity, internet, office supplies, three staff … plus a biller. I just have to shift my strategy to other insurances and also find a way of closing my doors gradually so I don’t upset my patients,” said Chowdhury, 64, who has more than 500 HMSA patients. “I’m getting out of this business. I’m giving myself a couple years to wind down and find something else to do because of the entire health care environment and the rules and regulations. It’s not making it easier for us. I haven’t taken a vacation in five years, and I don’t get time to go to the gym more than twice a week. Why do you think Hawaii’s facing a shortage of doctors? The whole system is crazy. I’m sick and tired of all this, and I’m getting out of here in a couple years.”

Dr. Arlene Meyers, a Wahiawa pediatrician who started her independent practice in 1979, said she dropped out of HMSA’s Medicaid, or QUEST, program for low-income patients and its HMO plan last month because the monthly payments under the new payment structure were too costly.

“The way HMSA was setting it up was actually going to put me out of business,” she said, adding that most of her 840 HMSA QUEST patients have moved to another health plan to access her services. “This unfairly targets the independent physicians. This is an attempt to exclude independent providers from the provider marketplace. This is going to have a grave effect on already-reduced access to medical providers in Hawaii, and we’re going to be left with only the hospital-based physicians who are younger and less experienced. I have no intent of being part of a situation that encourages the destruction of independent medicine in Hawaii.”

Some doctors fear the changes reward physicians for seeing fewer patients and will inevitably hurt patient care.

“Payment transformation may de-incentivize physicians to treat patients who are sicker and require more resources,” said Honolulu dermatologist Dr. Greg Sakamoto. “There are too many uncertainties and unknowns. We do not know what the payment rates will be, and whether or not those payments will provide enough money to really fund the kinds of treatments that are provided. It really is so nebulous that I do not even know what to think.”

Dr. David Kaminskas, a neurologist with Castle Medical Group, who is already using HMSA’s new model, is hopeful that the payment system will lead to improved health outcomes and transform the practice of medicine.

“It has not yet transformed the daily practice of medicine, but undoubtedly it will and it should,” he said. “Ultimately, what we’re looking for is shifting the focus of care toward disease prevention, utilizing technology to really provide standardized and evidenced-based care for our patients. Instead of just fighting disease when it presents itself, we’re really talking about preventing disease. Our current payment model really doesn’t value that.”

HMSA said the change is necessary to improve its members’ health. Nationally, the move to this new system — known as capitated payments — is being driven by the Affordable Care Act and the federal Medicare program in an effort to improve the overall health of the population and contain rising medical costs.