Physician Group Practice Demonstration Improves Quality, Reduces Costs

The Centers for Medicare and Medicaid Services (CMS) announced results from the initial Physician Group Practice (PGP) Demonstration, a landmark partnership with physician group practices that aims to better coordinate care across different settings, leading to improved quality and cost savings. After five years, this demonstration has shown positive results, including significant progress in areas of both quality improvement and savings in Medicare expenditures. The lessons learned from this demonstration helped shape the Accountable Care Organization (ACO) model put forth by the Affordable Care Act.

CMS also announced that all 10 of the physician groups will continue to participate in the new PGP Transition Demonstration, a two-year supplement to the original PGP Demonstration.

Under the PGP Demonstration, physician groups earn incentive payments based on the quality of care they provide and the estimated savings they generate in Medicare expenditures for the patient population they serve. For each participating PGP practice, CMS established a minimum threshold (or benchmark) for each of the quality performance measures. In order to receive incentive payments, a group had to meet the quality performance benchmark.

The results from the demonstration underscore the opportunities for integrating care for patients enrolled in traditional fee-for-service Medicare. In the fifth year of the demonstration, seven groups achieved benchmark performance on all 32 performance measures; these include Billings Clinic in Billings, Montana, Everett Clinic in Everett, Washington, Forsyth Medical Group in Winston-Salem, North Carolina, Geisinger Health System in Danville, Pennsylvania, Middlesex Health System in Middletown, Connecticut, Park Nicollet Health Services in St. Louis Park, Minnesota, and St. John’s Health System in Springfield, Missouri. The remaining three groups achieved benchmark performance on at least 30 of the 32 reported measures. These results mark a significant increase from year 1, when only 2 physician groups achieved benchmark performance on all measures.