Physician Group Practice Demonstration Results

August 30, 2011, 8:48 AM

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) announced the fifth year results of the Physician Group Practice (PGP) Demonstration, which was a precursor to and assisted in shaping and forming the Accountable Care Organization (ACO) model that was developed and rolled out to the public for consumption in the Patient Protection and Affordable Care Act (PPACA). Under the PGP Demonstration, the participating physician group practices were afforded an opportunity to earn incentive payments based on meeting certain criteria for the quality of care delivered to the recipients of their professional services in addition to savings generated for the Medicare program.

CMS reported that, of the ten total physician group practices participating in the PGP Demonstration, four such groups will share $29.4 million of the $36.2 million in total program savings generated in the fifth year of the five-year PGP Demonstration. In addition, CMS reported that with respect to the 32 quality measures used to determine a physician group practices quality of care, seven of the ten participating physician group practices achieved the benchmarks set forth by CMS for all 32 measures, while the remaining three participating physician group practices achieved the quality benchmarks in at least 30 of the 32 quality measures. This is in contrast to the first year of the PGP Demonstration in which only two of the ten participating physician group practices achieved the quality benchmarks set by CMS in all of the quality measures. Over the course of the five-year PGP Demonstration, seven of the ten participating physician group practices have shared in $110 million in savings generated for the Medicare program. Further, each of the physician group practices realized increases in quality scores for quality measures pertaining to heart failure, coronary artery disease, diabetes, cancer screening, hypertension and preventative care.

Additionally, CMS announced that all ten of the participating physician group practices are participating in CMS PGP Transition Demonstration which is a follow up two year demonstration that began on January 1, 2011. While the ACO regulations issued by CMS were inordinately complex and difficult for entities to comply with, one thing that seems fairly clear from the results of the five-year PGP Demonstration is that quality outcomes and reductions in costs to the Medicare program are achievable when physicians and physician groups are incentivized to achieve certain quality benchmarks. It will be interesting to track the progress and results with respect to the PGP Transition Demonstration over the next couple of years. --Aaron J. Ambrose