AMA luncheon - Physician practice transformation: leveraging AMA resources

Saturday, September 01, 2012 01:14 PM
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Marilyn Rissmiller, Senior Director
Health Care Financing

Physician practice transformation: leveraging AMA resources

Both the American Medical Association and Colorado Medical Society are committed to helping physicians navigate the transformation from fee-for-service to the new world of “budget-based” payment systems, such as bundled payments and shared savings.

During the AMA luncheon at last month’s CMS Annual Meeting, Catherine Hanson, vice president of private sector advocacy and the Advocacy Resource Center for the AMA, had some reassuring words for physicians: “If you want to succeed in this world, you can.”

“There are a lot of physicians in this country who love this model because it gives them complete flexibility to manage a budget,” Hanson said. “There are people who have really benefitted, but in order to do that, you have to have a whole new set of tools.”

Hanson introduced several of those tools – now available from AMA – during her discussion. She also provided information on the various payment systems, offered some recommendations and answered questions from the audience. (Slides from her presentation are available in the annual meeting section at

The reality, Hanson said, is that as health care spending in the United States increases to unsustainable levels (even as physician incomes have dropped in the past decade), fee-for-service is quickly becoming an unsustainable payment model.

Instead, more focus is being directed toward population health and “value-based” or “risk-adjusted” payment systems are being used more and more to supplement (if not replace) fee-for-service. Some of these programs already in place include Medicare’s shared savings program or the Prometheus payment system.

To be successful in these models, Hanson added, physicians must be able to:

  • understand actuarial predictions and risk adjustment methodologies;
  • track detailed patient demographic and health status information;
  • track IBNR (incurred but not reported) claims;
  • compare actual utilization against utilization budgets; and
  • fairly limit their risk.

Physicians also need the skills and tools to evaluate the likely impact of any proposed payment system so they can decide whether to accept it, Hanson said. And they need to maintain accounting systems that are capable of accurately tracking, reconciling and reporting on the true economic impact of the payments received pursuant to those systems.

To help physicians understand and make the transition to these budget-based payment models, AMA has created a new “how-to” manual titled “Evaluating and Negotiating Emerging Payment Options.”

Developed by the AMA and experts in physician payment issues, this series of resources discusses each of the various payment options now being offered and sets forth the key issues physicians must consider when determining whether to agree to a particular payment system, how to determine a fair price and how to reconcile any payments received to ensure that they are accurate.

This supplements AMA’s “how-to” manual discussing new delivery systems, titled “ACOs, CO-OPs and other Options: A “How-To” Manual for Physicians Navigating a Post-Health Reform World.”

AMA also has tools available on physician profiling programs, and has worked closely with Colorado Medical Society on model legislation that ensures physicians may get access to the data that health plans are using for these designations. The two organizations also have collaborated on efforts to reduce administrative waste, and AMA has resources available that include archived webinars and free online toolkits on each electronic transaction.

All of these tools may be accessed through the AMA at Hanson also took time during her address to applaud Colorado Medical Society, saying AMA appreciates organizations such as CMS that “are really working to figure out how to make it all work better.”

“It’s a whole new world out there” Hanson said, “but physicians are the only people that can fix what’s going on.”

Posted in: Colorado Medicine | Practice Evolution | Payment Reform | Practice Redesign | Accountable Care Organizations | Initiatives | AMA


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