CMS Unveils New Payment Models for Primary Care

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Plan shifts from fee-for-service to set monthly rates for some groups, starting in 2020

May 3, 2019 (ACP) – A new federal strategy that could dramatically change how internists are reimbursed for primary care is being met with cautious optimism by the American College of Physicians.

Primary care clinicians are most often the initial point of contact for patient care. Evidence shows that strengthening primary care is associated with higher quality, better outcomes, and lower costs within and across major population subgroups. Early innovative models have demonstrated that aligning primary care incentives to reward the provision of high value care, improves the quality and cost effectiveness of patient care.

“We're encouraged that the Centers for Medicare and Medicaid Services are testing new delivery and payment models to support the role of care provided by primary care physicians,” said Dr. Robert McLean, ACP's president.

Called the Primary Cares Initiative, the plan was “designed to give clinicians different options that advance our goal to deliver better care at a lower cost while allowing clinicians to focus on what they do best: treating patients,” the CMS administrator, Seema Verma, said in a statement.

The initiative offers five voluntary payment model options:

  • Primary Care First
  • Primary Care First – High-Need Populations
  • Direct Contracting – Global
  • Direct Contracting – Professional
  • Direct Contracting – Geographic

According to CMS, the two Primary Care First models “will test whether financial risk and performance-based payments that reward primary care practitioners and other clinicians for easily understood, actionable outcomes will reduce total Medicare expenditures, preserve or enhance quality of care, and improve patient health outcomes.”

Physicians and practices that elect to participate in the Primary Care First model will be paid through “simplified” total monthly payments, consisting of a risk-adjusted per beneficiary prospective monthly payments, a single flat fee for office visits, and performance-based payments with upside and downside financial risk. The performance based payments would give them the opportunity to earn as much as a 50 percent increase in Medicare revenue if they achieve savings for the program; if they are unable to achieve savings, their Medicare revenues could be reduced by a maximum of 10 percent. The high-need population option will provide higher payments for practices that care for certain groups of patients, such as those with complex care requirements and those who are seriously ill or have chronic needs who do not currently have a primary care physician.

The Direct Contracting options will allow “health care providers to take greater control of managing the costs of care for an aligned population of Medicare fee-for-service beneficiaries,” according to CMS, adding that those options “aim to engage a wider variety of organizations that have experience taking on financial risk and serving larger patient populations, such as Accountable Care Organizations (ACOs), Medicare Advantage (MA) plans, and Medicaid managed care organizations (MCOs).”

ACP expects that the Direct Contracting options would be used by big practices that can take on substantial financial risk for a large numbers of patients.

CMS says the new options could encompass more than 25 percent of all Medicare fee-for-service beneficiaries and offer new options for an estimated 25 percent of primary care practitioners and other providers. They will be available to physicians in 26 states and regions beginning on Jan. 1, the application process will begin in late 2018.

ACP is reviewing the details of the Primary Cares Initiative, which was unveiled April 22 and set to begin a five-year test in January.

“There's a lot that's appealing about it,” said Bob Doherty, ACP's senior vice president for governmental affairs and public policy, but he noted that there are many questions about how the new options will actually work.

“A lot of details are still missing that may determine how many physicians and practices will seek to participate, including basic things like how the PBPM [risk-adjusted per beneficiary per month payments] will be adjusted by risk, the amount of those payments, and how they are to be calculated,” Doherty cautioned in a post on his ACP Advocacy blog. “Also, unless other payers join Medicare in supporting PCF [Primary Care First] practices with a simplified payment structure and more focused measures, practices may not experience the reduction in administrative burdens and predictable revenue that CMS anticipates. Presumably, CMS will be releasing such information soon, prior to the enrollment period it intends to begin this summer.”

For now, Doherty said, ACP will continue to evaluate the new policies and “will provide the resources so every physician can make decisions about whether this will be a good deal for them or not.”

ACP also will “continue advocating for ways to support the value of primary care for physicians and for all patients across the health care system,” McLean said.

More Information

ACP's statement on the announcement is available on the College's website.

Additional perspective from ACP is available on the April 23 entry of the ACP Advocate Blog by Bob Doherty.

More details explaining the Primary Care First models and the Direct Contracting options are available on the CMS website.

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