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Demonstration Succeeds in Improving Quality and Reducing Costs in Group Practices


The initial Physician Group Practice Demonstration has shown positive results.

The initial Physician Group Practice (PGP) Demonstration has shown positive results, including significant progress in areas of both quality improvement and savings in Medicare expenditures, according to the Centers for Medicare and Medicaid Services (CMS).

The CMS said the “landmark partnership” with physician group practices, which aims to better coordinate care across different settings, thus leading to improved quality and cost savings, helped shape the Accountable Care Organization (ACO) model put forth by the Affordable Care Act.

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

“As we work to help bring care coordination to a broader set of providers through Accountable Care Organizations, the lessons learned by this demonstration provide great insight into how to use Medicare’s payment systems to improve quality while reducing costs,” Donald M. Berwick, MD, CMS administrator, said in a press release. “We have learned to invest in sustained improvement over time, and that short-term comparisons between start-up costs and measureable results may fail to realize the long-term value of these efforts.”

In the five-year demonstration, physician groups earned incentive payments based on the quality of care they provided and the estimated savings they generated in Medicare expenditures for the patient population they served. For each participating practice, CMS established a minimum threshold for each of the quality performance measures, and 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 … The remaining three groups achieved benchmark performance on at least 30 of the 32 reported measures. These results mark a significant increase from year one, when only two physician groups achieved benchmark performance on all measures,” according to a CMS press release.

“All 10 physician groups achieved benchmark performance on heart failure, coronary artery, and preventive care measures. Over the five years of the demonstration, the physician groups also increased their quality scores in the following areas an average of: 11% on diabetes measures, 12.4% on heart failure measures, 6% on coronary artery disease measures, 9.2% on cancer screening measures, and 3.8% on hypertension measures.”

SourcePhysician Group Practice Demonstration Succeeds in Improving Quality and Reducing Costs [Centers for Medicare and Medicaid Services]

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