Now that Health Care Reform is the law of the land, we anticipate many changes to the way physicians and hospitals are paid, not just by CMS, but by private sector plans who should now be emboldened to experiment with new payment models and kick value-based purchasing into the highest gear. Some of the notable elements in the Law include: an obligation by CMS to have a public domain episode logic by Jan 1, 2012 to be used in measuring provider costs and to experiment with episode of care payment; the conversion of the ACE demonstration program into a Pilot with authority to (1) expand nationally, and (2) expand the scope of the episodes so that they include readmissions and other post acute services; create the Center for Payment Innovation and launch pilots; introduce bundling payment efforts; and many more. The message in the Law is clear: Payment has to change and CMS will be experimenting broadly on different models. However, we have to remember that CMS's experiments will focus on what's important to them, not necessarily what's important to the under 65 population. In addition, CMS doesn't have to worry about negotiating fee schedules while private sector payers do.  And that's why it's going to be so important for private sector plans to boldly experiment as well, and do it fast.  Because the sooner we implement, the sooner we learn, and the better we can inform the CMS processes as opposed to being driven by what they decide. For all those who are ready, let's get to work.

On January 21st, 2010, the Colorado Health Foundation awarded HCI3 a nine-month grant to study the feasibility of implementing a multi-stakeholder payment reform pilot for the State of Colorado.  The purpose of the grant is to fund ECR PAC analysis for commercial plans, Medicaid and self-funded employers to reveal areas of opportunity for payment reform and to garner support from payers and providers to move forward on a subsequent three-year implementation grant.  Together with support from the Colorado Business Group on Health, HCI3 has presented Prometheus ECR concepts to dozens of representatives and leaders from nearly every sector of the Colorado health care community, along with the objectives of the study grant.  While only two months into the process, a Steering Committee comprised of key local leaders has been set up to guide the overall process, and already HCI3 has received several verbal commitments to release data for ECR analysis.  So far, enthusiasm for the project has been widely shared.  Using the ECR data analytics, the ultimate objective is to identify 2 to 3 community-based pilot sites with multiple payers engaging providers on a common basis to strive for accountable care and gains in efficiency.  Results from the study grant are scheduled to be delivered to the Foundation by the end of October with the aim of operations beginning in January 2011.