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CMS pushing primary care with two new payment models

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Dream come true, with some caveats 

As a primary care physician, these new payment models proposed by the Centers for Medicare and Medicaid Services sound like a dream come true. Professional organizations and advocacy groups seem to unanimously agree this is a step in the right direction. Meanwhile, there are a few caveats for primary care docs wondering how much champagne to pop: These models apply to Medicare and some Medicaid contracts. As with any payment reform, the hope is that, if successful, these precedents set by CMS will be adopted by other payers throughout the market and extend to other patients’ plans. It is unclear how this care will be integrated into practices that serve patients with a large payer mix, though it seems to be a natural progression of the Comprehensive Primary Care Plus (CPC+) model practices.

The plans are currently available only in select regions of the United States and in practices that already have the capacity to perform some less traditional care delivery models, which may include home visits, coordination of hospital discharges, telehealth, and group visits.

Dr. Sarah Candler

The measurement of value-based care will likely rely on checkboxes like hemoglobin A1c targets and prescription of statins for secondary prevention of heart disease - measures we already know may be disproportionately more difficult to achieve in the presence of unfavorable “Social Determinants of Health.” The plans account for this by allowing for additional benefit payments for practices caring for “Seriously Ill Patients” or those with “Complex Chronic” conditions. However, it looks like these patients need to be proactively identified when the plans are contracted, and it is unclear who is responsible for determining these designations and how.

Lastly, and most significantly, like the CPC+ models and other similar direct-payment models of care, the practices must agree to carry most - or all - of the financial risk of these patients. Plain and simple, for some, the cost may still be too high.

Sarah G. Candler, MD, MPH, FACP is a primary care physician in Houston.


Medicare officials aim to shift the program’s focus from sickness to wellness with the introduction of two new primary care value-based payment care models.

Health & Human Services Secretary Alex M. Azar II Wikimedia Commons/WWsgConnect/CC-SA 4.0

Alex M. Azar II

“We’re launching CMS Primary Cares, an initiative of two new payment models that will enroll a quarter or more of traditional Medicare beneficiaries and a quarter of providers in arrangements that pay for keeping patients healthy, rather than ordering procedures,” Alex Azar, secretary of Health and Human Services, said April 22 during a press conference.

“Today’s announcement creates innovation in primary care that has the potential to entirely transform our fee-for-service system – which is about 65% of the Medicare program – into one that drives value,” Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said during the press conference.

The voluntary models are an array of “new payment options that are all designed to reward [physicians] for keeping people healthy, improving quality of life and delivering positive health outcomes,” Ms. Verma said. “These models are intended to allow clinicians to focus on patient care, not billing, and to do what they’ve been trained to do.”

One option, the Primary Care First model, is aimed at small and solo primary care practices.

The model will “provide participating practices with a predictable payment stream, including a partial cap and some fee-for-service spend,” Ms. Verma said, adding that payments will be adjusted for performance in reducing hospitalizations.

Seema Verma CMS administrator

Seema Verma

Under Primary Care First, practices will receive a flat payment per beneficiary, allowing clinicians to focus more on care than on revenue cycle management, according to CMS. Practices will be able to receive bonuses of up to 50% or penalties of up to 10%, based on performance, as an incentive to reduce costs and improve quality. Performance will be assessed and paid quarterly. Specifics on the per-beneficiary payment were not released.

Participation in Primary Care First is limited to primary care professionals certified in internal medicine, general medicine, geriatric medicine, family medicine, and hospice and palliative medicine. Practices must provide services to at least 125 Medicare beneficiaries and primary care services must account for at least 70% of billing revenue. Practices also must have experience in value-based payments.

There also will be an option for enhanced payment for caring for patients with chronic illnesses.

“When a patient stays healthy and out of the hospital, these practices will get paid a bonus,” Secretary Azar said. “But if the patient ends up sicker than expected, these practices will bear responsibility for the extra spending up to a certain share of their practices’ revenue.”

More information about participating in the Primary Care First model will be available later in the spring of 2019, with the model launching in 2020.

A second option, the Direct Contracting model is “more ambitious and aimed at larger practices,” Mr. Azar said – those that serve at least 5,000 Medicare beneficiaries.

“Just like in Primary Care First, when patients have a better experience and stay healthier, these practices will make more money,” he continued. “But if patients end up sicker, Direct Contracting Practices will bear the risk for the extra health spending, not just at their own practice, but throughout the system.”

Options under the Direct Contracting model are designed for organizations ready to take on full financial risk that have experience managing large populations with accountable care organizations or working with Medicare Advantage plans, Ms. Verma explained.

The Direct Contracting model will start with two options. The Professional population-based payment (PBP) model offers a lower risk-sharing arrangement (50% savings/losses), while the Global PBP offers a 100% savings/losses risk-sharing arrangement.

CMS also is requesting information on a third payment model, the Geographic PBP model, which would have a similar risk-sharing arrangement as the Global PBP, but participants would assume responsibility for the total cost of care for all Medicare fee-for-service beneficiaries in a defined region.

This model also will launch in 2020.

The new Medicare primary care options were commended by quarters not always supportive of the current government.

Andy Slavitt, CMS administrator under President Obama, voiced his support for the new models.

“There are several watershed moments in the history of the Medicare program, like the coverage of prescription drugs and the shift to paying for better care,” he tweeted April 22. This announcement is “another one as it eases the connection of Medicare beneficiaries to a primary care physician and gives doctors the freedom, rewards, and tools to keep people healthy.”

He continued: “With this great starting point, even as CMS listens to input, physicians and patient groups should be considering who this helps move ... to a healthier country with a more sustainable system.”


The American Medical Association also voiced its support.

“Providing adequate financial support for high-quality primary care must be an essential element of any strategy to improve the quality and affordability of our country’s health care system, Gerald E. Harmon, MD, immediate past chair of the AMA Board of Trustees, said in a statement. “Many primary care physicians have been struggling to deliver the care their patients need and to financially sustain their practices under current Medicare payments. The new primary care payment models announced today will provide practices with more resources and more flexibility to deliver the highest-quality care to their patients.”

The American College of Physicians also noted their support of the new models.

“ACP is optimistic that the new models will emphasize the important role primary care plays in value-based care delivery, that models are voluntary and have a range of risk options, and that practices should use population health management data to reap potential benefits, Robert McLean, MD, ACP president, said in a statement. “ACP is supportive of the fact that the new models aim to reduce administrative burdens – potentially allowing physicians to spend more time with their patients.

“The success and viability of these models will depend on the extent that they are supported by payers in addition to Medicare and Medicaid, are adequately adjusted for differences in the risk and health status of patients seen by each practice, are provided predictable and adequate payments to support and sustain practices (especially smaller independent ones), are appropriately scaled for the financial risk expected of a practice, are provided meaningful and timely data to support improvement, and are truly able to reduce administrative tasks and costs, among other things,” he noted.

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