Colorado, Medicare partnering to pay doctors based on whether they can keep

Colorado is one of four states partnering with Medicare to try to pay doctors based on whether they can keep their patients healthy, but it’s not clear how they’re going to do that.

The idea that insurers can keep costs down by encouraging the kind of care that keeps people from needing costlier procedures down the road isn’t new, and Medicare has tried a mix of incentives and financial punishments over the last decade.

Most haven’t generated significant savings or shown they improve patients’ health, and the American health care system still primarily relies on billing for individual services.

Part of the reason that efforts to pay for quality haven’t achieved much is that Medicare, Medicaid and private insurers are each going their own way, with separate measures of care quality and different ways of paying, said Karen Joynt Maddox, co-director of the Center for Health Economics and Policy at Washington University.

That means there’s not enough momentum in any one direction to change how health care facilities do business at this point, she said.

“It’s just a mess right now,” she said. “It’s moving, but it’s moving in a slow, piecemeal fashion.”

Colorado health officials think their partnership with the federal Centers for Medicare and Medicaid Services could help change that. It’s early in the process, but the plan is that over the next few years, Colorado Medicaid — now called Health First Colorado — and Medicare will pick specific areas where they want to see improvement and decide how to pay in a way that encourages providers to focus on those priorities.

If it works, Medicare could decide to take some or all of the Colorado model nationwide. It’s going to try out different ideas to improve care quality in Arkansas, California and North Carolina.

Mark McClellan, one of the co-chairs of the Centers for Medicare and Medicaid Services’ Health Care Payment Learning and Action Network, said they chose to work with Colorado and the other three states because they’ve already taken steps to pay for quality.

“We look forward to the efforts in these states serving as models that will help other states succeed in their efforts to pay for better health and to increase quality and lower costs in health care,” he said in a statement.

Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing, said the partnership is just one way Colorado is moving away from paying for each medical service provided and toward a system that rewards better outcomes for patients. She said she thinks Colorado can build something more effective by looking at where other efforts fell short.

“You get what you pay for, and people focus on what you measure,” she said.

Monthly rates meant to allow flexible care

Stephanie Gold, president-elect of the Colorado Academy of Family Physicians, said the state started the second phase of its alternative payments plan in January. In the first phase, the state paid extra if practices hit certain goals, like screening a high percentage of eligible patients for cancers that can be successfully treated when diagnosed early, she said.

In the second…