CMS.gov, April 22, 2019
Today, U.S. Department of Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma are announcing the CMS Primary Cares Initiative, a new set of payment models that will transform primary care to deliver better value for patients throughout the healthcare system. Building on the lessons learned from and experiences of the previous models, the CMS Primary Cares Initiative will reduce administrative burdens and empower primary care providers to spend more time caring for patients while reducing overall health care costs. The models were developed by the Innovation Center under the leadership of Adam Boehler and are part of Secretary Azar’s value-based transformation initiative.
Administered through the CMS Innovation Center, the CMS Primary Cares Initiative will provide primary care practices and other providers with five new payment model options under two paths: Primary Care First and Direct Contracting.
The five payment model options are:
- Primary Care First (PCF)
- Primary Care First – High Need Populations
- Direct Contracting – Global
- Direct Contracting – Professional
- Direct Contracting – Geographic
The Primary Care First (PCF) payment model options 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. PCF will provide payment to practices through a simplified total monthly payment that allows clinicians to focus on caring for patients rather than their revenue cycle. PCF also includes a payment model option that provides higher payments to practices that specialize in care for high need patients, including those with complex, chronic needs and seriously ill populations (SIP).
Like the PCF payment model options, the Direct Contracting (DC) payment model options are also focused on transforming primary care, allowing health care providers to take greater control of managing the costs of care for an aligned population of Medicare fee-for-service (FFS) beneficiaries. While the PCF models are focused on individual primary care practice sites, the DC payment model 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). The DC payment model options are designed to create a competitive delivery system environment where organizations offering greater efficiencies and better quality of care will be financially rewarded. The payment model options include 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 DC payment model option in which an organization is participating, 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. Participants in the global payment model option will ultimately bear full financial risk, while those in the professional payment model option will share risk with CMS. This will provide prospective model participants a range of financial risk arrangements from which to choose while providing a more predictable revenue stream and reducing health care provider burden commensurate with level of financial risk.
Together, CMS anticipates these five 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.
For a fact sheet on the CMS Primary Care First payment model options, please visit https://www.cms.gov/newsroom/fact-sheets/primary-care-first-foster-independence-reward-outcomes.
More information on CMS Primary Care payment model options is at: https://innovation.cms.gov/initiatives/primary-care-first-model-options/.
For a fact sheet on the Direct Contracting payment model options, please visit https://www.cms.gov/newsroom/fact-sheets/direct-contracting.
More information on the Direct Contracting model options is at: https://innovation.cms.gov/initiatives/direct-contracting-model-options/.
To view a fact sheet on the CMS Primary Cares Initiative, please visit: https://innovation.cms.gov/Files/x/primary-cares-initiative-onepager.pdf.
To review the Direct Contracting—Geographic Request for Information, please visit: https://innovation.cms.gov/Files/x/dc-geographicpbp-rfi.pdf.
CMS is also releasing the first annual evaluation report for the Comprehensive Primary Care Plus (CPC+) Model, which details the implementation experience and impact on beneficiary outcomes over the first year for practices that started participating in the CPC+ model in January 2017. To view the findings-at-a-glance, please visit: https://innovation.cms.gov/Files/reports/cpcplus-fg-firstannrpt.pdf. To see the report, please visit: https://downloads.cms.gov/files/cmmi/cpcplus-first-ann-rpt.pdf.
CMS.gov, April 22, 2019
Direct Contracting (DC) is a set of voluntary payment model options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in Medicare fee-for-service (FFS).
How are the new payment model options expected to transform the health care system?
The payment model options available under DC seek to reduce program expenditures and improve quality of care and health outcomes for Medicare beneficiaries through alignment of financial incentives and an emphasis on beneficiary choice and care delivery while maintaining access to care for beneficiaries, including patients with complex, chronic conditions and seriously ill populations. Specifically, to help ensure that care quality is improved and beneficiary choice and access are protected, we will tie a meaningful percentage of the benchmark to performance on quality of care, while also monitoring to ensure that beneficiaries’ access to care is not adversely affected as a result of the model. The new payment model options also present an opportunity to test novel methods for organizations to manage Medicare FFS expenditures and better integrate care delivery for those dually eligible for Medicaid and Medicare, including through coordinated efforts with Medicaid Managed Care Organizations (MCOs). Further, through refinements in our benchmarking methodology and risk adjustment, we are aligning financial incentives to attract organizations that manage the complex chronic, and seriously ill beneficiary populations.
What are the payment model options’ goals?
The payment model options available under DC aim to reduce expenditures while preserving or enhancing quality of care for beneficiaries. By aligning financial incentives, providing a prospectively determined and predictable revenue stream for participants, and putting a greater emphasis on beneficiary choice, the payment model options aim to:
- Transform risk-sharing arrangements in Medicare FFS by offering both capitated and partially capitated population-based payments that move away from traditional FFS.
- Broaden participation in CMS Innovation Center models by allowing model participation by organizations new to Medicare FFS, such as physician managed organizations that currently operate exclusively in the MA program, Medicaid MCOs that provide Medicaid benefits for full-benefit dually eligible beneficiaries, and innovative, new organizations that seek to assume responsibility for Medicare FFS beneficiaries in a geographic target region.
- Empower beneficiaries to engage in their care delivery through voluntary alignment and potential benefit enhancements.
- Reduce provider burden to meet health care needs effectively, through for example, a smaller set of core quality measures and waivers to facilitate care delivery.
How do the payment model options available under DC differ from other Medicare ACO initiatives?
Unlike prior Medicare ACO initiatives, the payment model options available under DC seek to engage a broader variety of organizations than have previously participated in CMS models and programs. While CMS expects that current NGACO and MSSP participants will be interested in the payment model options available under DC, CMS also seeks to attract organizations that are new to Medicare FFS, such as health care providers and organizations who are currently only in MA, and Medicaid MCOs that are ready to take on accountability for Medicare FFS spending for their dually eligible members. If the CMS proceeds with the Geographic PBP option, DC may also attract innovative organizations that are interested in both entering into formal arrangements with health care providers and being accountable for an entire population in a target region.
DC’s current design seeks to create a competitive delivery system environment based on regional payment neutrality, in which organizations bear appropriate risk, and population-based benchmarks are applied equitably across all model participants in the same market (i.e., accounting for risk adjustment factors). We expect competition to flourish in such environments, as organizations offering efficiencies, better quality, and better service are financially rewarded and attract greater numbers of beneficiaries, while being held to a standard of continuous improvement.
How will participants be paid under the payment model options?
For the participants in the Professional PBP option, CMS will offer primary care capitation equal to 7 percent of the total cost of care for enhanced primary care services, along with 50 percent shared savings/shared losses with CMS. For participants in the Global PBP option, CMS will offer the choice of Primary Care Capitation or Total Care Capitation, in addition to 100 percent shared savings/losses.
Evaluation of the Comprehensive Primary Care Plus Initiative (CPC+)
CMS.gov, First Annual Report
CPC+ is the largest and most ambitious primary care payment and delivery reform ever tested in the United States.
In the first year, CPC+ provided primary care practices with substantial supports and the practices began the hard work of transforming care delivery. However, as expected, there were few effects on cost, service use, and quality for Medicare FFS beneficiaries in the first year. Effects on patient outcomes may emerge with more time as CPC+ practices deepen and expand care delivery changes.
By Don McCanne, M.D.
This topic cannot possibly be covered in a Quote of the Day comment. Primary Care First and Direct Contracting are complex topics, but they will impact significantly the Medicare program so it will be important to have at least a superficial understanding of these concepts. To learn what this is all about, there are several links to various documents in the CMS press release above.
A few observations:
Primary Care First and Direct Contracting are part of Secretary Azar’s value-based transformation initiative – a series of bureaucratic intrusions that supposedly start paying for health care based on value rather than volume. Little does it matter that this experimentation has been profoundly disappointing to date.
Health insurance works by pooling risk – the larger the risk pool the better. These CMS programs transfer risk to the providers, perversely dividing the risk pool into the smallest of segments. Not only does this expose the providers to risk (as deliberately designed), this also transfers some of the insurance function to the providers while keeping the private insurers in place (selling us more non-risk-bearing administrative services).
These programs move into the traditional fee-for-service Medicare program which advances the administration’s goal of further privatizing Medicare (though we may need a new word to describe privatizing). A stated goal of this program is “to create a competitive delivery system environment in which organizations bear appropriate risk.”
Since these programs are designed to be especially suitable for individuals with complex, chronic needs and for seriously ill populations (SIP) while transferring risk to the providers, it is inevitable that gaming the system will be rampant.
The administrative complexity of this program promises to “reduce administrative burdens and empower primary care providers to spend more time caring for patients while reducing overall health care costs.” This seems to be one more example in which this administration presents fiction as the absolute truth.
It is ironic that many physicians are trying to escape the administrative hassles of private insurers and government bureaucracies by going into “Direct Care” practices in which they directly contract with the patients, yet CMS has usurped the concept and converted into the near opposite of what was intended.
Also released by CMS is the first annual report of the Comprehensive Primary Care Plus Initiative (CPC+) – a precursor in this continuum of value-based transformation. The report states, “as expected, there were few effects on cost, service use, and quality for Medicare FFS beneficiaries.” Yet we march on.
In several of the documents it is stated repeatedly that these proposals are designed to reduce overall health care costs. In actuality, they are designed to reduce the federal government’s contribution to health care spending. In doing so, they are creating a quagmire that will serve neither the patients nor their health care professionals well.
It seems obvious that we should abandon these dysfunctional policies and move forward with a financing system that will serve us all well: single payer, improved Medicare for All. Now that would be a genuine value-based transformation.
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