Coming to Your Community Soon? CMS Global Fee Demonstration Grants
In Colorado, Oklahoma, New Mexico, and Texas, the Center for Medicare and Medicaid Services (CMS) has begun a demonstration grant process to look into global fees, in which CMS will contract with a group of providers to accept a single fee for all medical services delivered for a single episode of care.
In January 2009, approximately 20 cities will participate in the Acute Care Episode (ACE) Demonstration Project, where a single group of physicians and hospital(s) accept a global fee for up to 37 Medicare-Severity Diagnostic Groups (MS-DRGs) in cardiac and/or orthopedic surgery.
When I discussed this scenario last month with a group of hospital leaders who participated in my ACHE seminar “Practical Strategies for Engaging Physicians,” their body language was telling. Despite their discomfort, they participated avidly in the discussion. At the end, although none felt ready to accept a global fee, they came away with a series of steps to begin the journey.
They felt that even though this project was a demonstration grant, that the handwriting was on the wall, especially with a second demonstration grant expected to be announced in 2009 in another part of the US. The likelihood is high that commercial insurers are watching with interest and expect to join in once the data show that they can save money.
The implications are that global fees will create two classes of providers: those that can adapt to the new system and thrive and those for whom the bathtub water is swirling. My seminar participants believed that the successful providers will realize that:
- Global fees are an opportunity to improve physician-physician as well as physician-hospital communication
- Physicians and hospital leaders must pay at least as much attention to enlarging the pie as dividing it
- Shared values, based on the needs of the community, will eventually dominate the discussion
- What is right for the community will transcend who is right
- Physician advisory groups, comprised of physician champions who have earned the clinical respect of their colleagues, will lead the discussion
- New physician leaders will emerge through this process
- The practice environment will improve for other MS-DRGs as a result of the process
- When physicians are treated as adults, with access to data and authority to participate meaningfully in clinical priority setting, they behave like adults, with active participation and sensible recommendations
- Through the process of discovery, physicians can begin to act as responsible stewards (and perhaps owners) of scarce community and hospital resources
©2008 Kenneth H. Cohn, M.D., MBA, FACS
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