Will Emergency Departments Be Recognized and Compensated in Alternative Payment Models?

December 19, 2016 11:31 AM | Sally Winkelman (Administrator)

By Bobby Redwood, MD, MPH, WACEP President, and Lisa Maurer, MD, WACEP Secretary/Treasurer

Across the country, innovative health systems are embarking on a grand experiment and exploring "Alternative Payment Models" (APMs). There are a variety of flavors of APM, but the most commonly mentioned are the Coordinated Care Model and the Patient Centered Medical Home, both of with aim to improve the quality and perhaps efficiency of primary care delivery and thus cut costs on those pesky, wasteful, expensive ED visits*. My question is this: How will APMs affect ED workflows and will EDs be appropriately compensated for their support and contribution to a successful APM?

To be fair, the theory behind the APMs is quite promising. Weinick et al. found that roughly 14–27% of all ED visits could be treated in clinics and urgent-care centers at a lower cost; a potential savings of $4.4 billion per year. By reorganizing primary care, the APMs will hopefully create a new style of health care delivery where continuity, expanded access, coordination, and a team-based approach are used to help patients avoid exacerbations of chronic conditions, treat chronic pain and psychiatric complaints proactively in the home-setting, and gain access to their primary care team for urgent health care needs. If successful, APMs will cut down on ED visits for complaints like chronic pain, depression, medication refills, work excuses, migraine headaches, asthma/COPD/CHF exacerbations, missed dialysis, etc. Who among us would not breathe a sigh of relief to come to work and spend more time treating life-threats and less time plugging holes in the social safety net? 

The evidence supporting APMs continues to grow with over 500 peer reviewed articles on the topic and a generally strong review by the Agency for Healthcare Research and Quality. The main concern that many emergency physicians have with APMs is not the concept itself, but rather the notion that the ED is somehow separate from the Coordinated Care Model or the Patient Centered Medical Home. When I look at policy-makers' flow diagrams for a Coordinated Care Model or read about a Patient Centered Medical Home in the literature, the care coordination seems to magically occur with no emergency department involvement whatsoever. This may sometimes be the case; however, in speaking with my emergency physician colleagues, the consensus is that the ED actually plays an integral role in the success of the APMs. The reality of the situation is that APMs that truly coordinate care work with ED providers to maximize value of any ED visits that do happen, or even work with ED providers in an abbreviated fashion to streamline care and avoid a full ED visit.

Let's walk through a few examples: 

  • An after-hours medication refill visit is avoided by a primary care physician calling the emergency physician and asking her to write an InstyMeds prescription that the patient can pick up in the ED lobby without having to actually check in. 10 minutes of emergency physician time spent.
  • A patient with CHF presents with a typical exacerbation. After initial evaluation and diuresis, the emergency physician is able to coordinate with the patient’s cardiologist regarding optimizing his medical regimen.  After reviewing the plan with the emergency physician, an emergency coordinator is able to make an urgent follow up appointment with the cardiologist, arrange transportation, and set up a home nurse visit for the next day.  The physician has an extended conversation with the patient regarding disposition options, and ultimately hospitalization is avoided.  20 minutes of emergency physician time spent coordinating care.  30 minutes of care coordinator time spent. 
  • An asthmatic patient is having a routine asthma exacerbation due to his nebulizer malfunctioning. As part of a community paramedicine program whose medical director is a hospital-based emergency physician, the patient is evaluated by paramedics. They troubleshoot and repair his nebulizer, and then call the emergency physician to confirm a no-transport. The emergency physician calls the primary care physician to keep him in the loop and coordinate prompt follow-up. 10 minutes of emergency physician time spent. 60 minutes of paramedic time spent.
  • The extended family of a dementia patient is home for the holidays and, noting grandpa's gradual physical and mental decline, decide that it is time for him to go to a nursing home. They incorrectly present to the ED, but the ED care coordinator is able to avoid a full evaluation by hosting a conference call with his primary care physician and a social worker to facilitate placement. 60 minutes of emergency coordinator and ED conference room time spent. 

For a real life example, let's look to the literature. Murphy et al. found that a $554 investment per enrollee saved the health system $6091 per extreme ED user and $1285 per frequent ED user, a net savings of $710,474. These results are striking, but they required the ED to invest in a 0.25 full-time equivalent (FTE) medical director for the coordination program, a 1.0 FTE case coordinator, and a 1.0 FTE administrative assistant (hence the $554 per enrollee investment cost). Ultimately, the costs associated with frequent and improper ED use are incurred not only by the patients themselves, but also by other patients, hospitals, emergency physicians, third-party payers, and society in general. Reducing the costs of ED overuse is clearly going to take a team effort and compensation plans for these efforts should not overlook the time, expertise, and facility expenses incurred by the nation's EDs. 

We at Wisconsin ACEP would like to know more about how this issue is impacting our emergency physicians and EDs. 

  • Is your health system participating in an APM, how is emergency care coordination being compensated?
  • Are you an ED director, what are some of the coordination costs that are not always obvious to CMS or third party payers?
  • Do you participate in any healthcare payment reform workgroups or advisory panels, are the ED costs of care coordination being acknowledged in policy making circles?

Email WACEP@badgerbay.co with your questions and comments. If you'd like to learn more, check out this article on Cost-effective ED Care Coordination by our colleagues at Washington ACEP!

*Emergency physicians will immediately recognize the irony here, emergency care represents less than 2 percent of the nation's $2.4 trillion in health care expenditures while covering 136 million people a year and the focus on preventing so-called “non-urgent” emergency department visits distracts policymakers from the real cost savings in reducing hospital admissions and investing in preventive measures.
Report: Accounting for the cost of US health care: A new look at why Americans spend more, McKinsey Global Institute, December 2008
Agency for Healthcare Research and Quality. Emergency Room Services-Mean and Median Expenses per Person With Expense and Distribution of Expenses by Source of Payment: United States, 2006. Medical Expenditure Panel Survey Household Component Data. (March 04, 2013)