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Tip of the week, part one: Consider legal infrastructure to prepare for PROMETHEUS contracting

Managed Care Weekly Advisor, July 4, 2007

Unlike existing pay-for-performance agreements, which are not typically documented in enforceable contract terms, the PROMETHEUS (provider payment reform for outcomes, margins, evidence transparency, hassle-reduction, excellence, understandability, and sustainability) payment model sets forth explicit, legally binding obligations. There are several key issues that payers and providers should consider during negotiations and contracting.

  1. Scope of services on the clinical practice guideline (CPG) and within the evidence-informed case rate (ECR) budget: Providers who assume direct responsibility to deliver portions of the CPG will have a greater effect on the 70% of the scores on their comprehensive scorecard. Those who serve as managing physicians will benefit more from referral practices that affect the remaining 30%.

  2. Responsibility for the scope of the ECR: PPI, not the plan, establishes the scope of each ECR and the basic services included. Although plans may establish dollar amounts associated with a given ECR that reflect regional variations and issues, the budget must be large enough to encompass the cumulative fee-for-service fee schedules on the date that PROMETHEUS is implemented.

  3. Changes to CPGs: PPI is responsible for updating CPGs due to changes in medical science or new technologies.

  4. Allocation of payments: Plans determine how to allocate payments within each ECR budget, following PPI guidelines.