CMS Announces New Medicare Primary Care Payment Model

May 2019 ~

The Department of Health and Human Services (HHS) and CMS announced, plans to launch five new Medicare primary pare payment models.

The Primary Cares Initiative, according to CMS, is comprised of a new set of payment models designed to transform primary care to deliver better value for patients throughout the entire healthcare system, reduce administrative burden, and “empower primary care providers to spend more time caring for patients while reducing overall health care costs”.

The Initiative is designed to transform primary care by paying providers for outcomes rather than services in Medicare fee for service (FFS) and “specifically designed to encourage state Medicaid programs and commercial payers to adopt similar approaches,” said HHS Secretary Alex Azar.

The five payment model options are:

  1. Primary Care First (PCF)
  2. Primary Care First – High Need Populations
  3. Direct Contracting – Global
  4. Direct Contracting – Professional
  5. Direct Contracting – Geographic

The Primary Care First (PCF) model is a five year, two-track voluntary program designed to enable for Medicare primary care providers to shift from fee-for-service (FFS) to a direct contracting payment model with varying degrees of risk. Track 1 targets single or smaller primary care practices and would offer providers a flat monthly fee per patient, with the opportunity for greater shared savings if these patients stay healthy and out of the hospital. Track 2 targets larger practices and hospital systems and offers higher payments to practices that specialize in care for high need patients, including those with complex, chronic needs and seriously ill populations (SIP). Under track 2 payment adjustments would be made to meet the needs of the population.

PCF will be tested for five years and is scheduled to begin in January 2020. A second application round is also planned for participants starting in January 2021.

The Direct Contracting (DC) payment model is designed to target a broad range 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).

The DC payment model offers three options including a focus on care for patients with complex, chronic needs and SIPs, as well as a voluntary alignment option that allows beneficiaries to align with the health care provider of their choosing. Depending on the payment model option in which an organization participates, the model participant will receive a fixed monthly payment that can range from a portion of anticipated primary care costs to the total cost of care. The Geographic Population-Based option is designed to offer innovative organizations the opportunity to assume responsibility for the total cost of care and health needs of a population in a defined target region. Participants in the global payment model option will ultimately bear full (100%) financial risk, while those in the professional option will share (50%) risk with CMS.

CMS is seeking public comment on one DC payment model option with an expected performance period launch in January 2021.

The agency predicts the new payment model options administered under the Primary Cares Initiative could:

  • Provide better alignment for over 25 percent of all Medicare FFS beneficiaries – nearly 11 million Medicare beneficiaries would potentially be included (a collective 5 million beneficiaries in the DC payment model options and a collective 6.4 million in PCF payment model options);
  • Offer new participation and payment options and opportunities for an estimated one in four (25 percent) primary care practitioners as well as other health care providers; and
  • Create new coordinated care opportunities for a large portion of the 11-12 million beneficiaries dually eligible for Medicare and Medicaid, specifically, those in Medicaid managed care and Medicare FFS.

CMS says it based the design of the payment model options on “considerable stakeholder input” and draw from Physician-Focused Payment Model Technical Advisory Committee (PTAC) review of proposals, including, but not limited, to The Advanced Primary Care Model from the American Academy of Family Physicians, An Innovative Model for Primary Care Office PaymentThe Patient and Caregiver Support for Serious Illness Model, and The Advanced Care Model.

Currently, the plan has received support from the AMA, the American Academy of Family Physicians (AFP), and the Physician-Focused Payment Model Technical Advisory Committee.

For more information on the five new payment models under the Primary Cares Initiative, see the Primary Cares Initiative Fact Sheet, the Primary Care First Fact Sheet, and the Direct Contracting Payment Model Fact Sheet.

Source(s): CMS Press Release; CMS Fact Sheet; Modern Healthcare; American Journal of Managed Care; Fierce Healthcare; Health Leaders Media;