CMS announces new primary care payment models aimed at greater shared risk

WASHINGTON D.C.—The Trump Administration is experimenting with several new primary care payment models, including one that would shift providers to global payments.

Called the Primary Cares initiative, the aim is to push primary care providers to take on more risk, officials said.

“This initiative will radically elevate the importance of primary care in American medicine, move toward a system where providers are paid for outcomes rather than procedures and free doctors to focus on the patients in front of them, rather than the paperwork we send them,” said Health and Human Services Secretary Alex Azar during an announcement at the American Medical Association on Monday,

Primary Cares includes two tracks—Primary Care First and Direct Contracting—that will offer providers varied degrees of risk-sharing to encourage population-based primary care. HHS officials estimate the voluntary models could cover a quarter of Medicare fee-for-service beneficiaries. The Centers for Medicare & Medicaid Services are intending to begin accepting application requests over the next several months and to launch the models in January 2020.

Launching the new models is a “historic turning point in American healthcare," Azar said. 

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Primary Care First

Primary Care First is a five-year demonstration built on the existing Comprehensive Primary Care Plus program. It’s targeted to single or smaller primary care practices and will pay these providers a monthly flat fee for each patient, with the opportunity for greater shared savings if these patients stay healthy and out of the hospital. 

The model includes about 10% downside risk which equates to about their revenue cycle cost already, said Center for Medicare and Medicaid Innovation head Adam Boehler.

There’s a second option under the Primary Care First umbrella as well, which will focus on seriously ill patients, and adjust the payments to meet the needs of this population. Providers that opt into the model can choose to focus in either area, but those who want to specialize in the SIP option must demonstrate the ability to effectively care for these patients first, CMS said in a fact sheet

Boehler said that participants in either version of the model could see significant shared savings. For example, a physician earning $200,000 in Medicare reimbursement for a patient today could see $300,000 if that patient is kept healthy. 

CMS will be measuring success based on risk-adjusted hospitalizations to prove patients are healthy and kept at home as much as possible, Boehler said. 

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“If you remember one thing today, it should be this: Primary Cares is a clear sign we’re changing the status quo,” Boehler said. “These are sweeping models.” 

Direct Contracting

There are three variants of the Direct Contracting track, CMS announced. This track is aimed at larger primary care organizations and those who have experience with taking on financial risk, such as those who participate in accountable care organizations. 

Like Primary Care First uses CPC+ as a baseline, the Direct Contracting track is based on the Next Generation ACO program, CMS said. The track’s professional option allows participating providers to share in 50% of savings and losses, also based on predictable monthly payments for enhanced primary care services, Boehler said. 

Under its global option, providers will take full risk and will earn 100% of savings, he said. In this approach, participating providers can choose monthly payments based solely on primary care services or they can expand that to include other services, Boehler said. 

CMS is seeking feedback on the third approach, the geographic option, and plans to launch it later in 2020 based on responses. In this model, a provider organization would take on responsibility for the total cost of care for all Medicare beneficiaries in a specific geographic region, similar to a global budget.  “This model is very important to our focus on empowering local communities to care of patients,” Boehler said. 

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Boehler said CMS is confident in its enrollment projections, though the models are voluntary because they’re designed around input from various provider groups. Primary Cares simplifies their work and offers financial incentives for quality, which should make it attractive to PCPs, he said. 

There has been a focus on allowing for care models based on geographic regions at CMS for some time, as well, he said. 

CMS Administrator Seema Verma said officials are also hoping that the model will draw interest beyond Medicare, too. CMS will be working with state officials to test the payment models in Medicaid in the future, she said, and Boehler has also been working with private payers on the matter. 

Having a multi-payer approach is also likely to drive participation, she said. 

“We have heard from many that there are providers ready and willing to take on more risk,” Verma said.