CMS launches 5 primary care models in new value-based push

HHS and CMS have launched a set of new payment models, dubbed the Primary Cares Initiative, that aim to transform primary care through value-based options. The new models will also test financial risk and performance-based payments for primary care practitioners and clinicians.

The Initiative, which is voluntary, includes five new payment models under two paths­­––Primary Care First (PCF) and Direct Contracting (DC). Industry groups have been largely supportive of the initiative and its aims since the agencies announced the models on April 22.

“As we seek to unleash innovation in our healthcare system, we recognize that the road to value must have as many lanes as possible,” CMS Administrator Seema Verma said in a statement. “Our Primary Cares Initiative is 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 five models include:

  • Primary Care First
  • PCF High Needs Population
  • DC Global
  • DC Professional
  • DC Geographic

The PCF path provides smaller primary care practices a flat revenue stream for each patient, for which they are paid a bonus when a patient remains health and out of the hospital. Practices will be responsible for added costs––up to a determined share of their revenue––if patients end up sicker than expected. Providers could lose 10 percent of their revenue, though stand to see bonuses as high as 50 percent, according to Adam Boehler, director of the Center for Medicare & Medicaid Innovation (CMMI), which helped develop the models.

Under DC, which is intended for larger practices, practices will also see bonuses for healthier patients, but they will also take on downside risk across the system for sicker and costlier patients––not just the extra health spending at their own practice.

Practices could potentially get higher payments for addressing patients with specific diagnoses and chronic illnesses.

According to CMS, Primary Cares will enroll an estimated 25 percent or more of Medicare fee-for-service beneficiaries, and 25 percent of providers are expected to engage in the arrangements “that pay for keeping patients healthy, rather than ordering procedures,” HHS Secretary Alex Azar said in a speech on April 22. HHS and CMS stated the models will give primary care practices more flexibility in how they provide care to patients and potentially receive significant savings.

“Primary care is a small slice of health spending overall, but it has a significant impact on downstream costs and quality,” Azar said.

PCF, a five-year model, will begin in 2020, and practices can begin applying for the models in the summer of 2019. CMS is seeking input on the DC model, which it hopes to launch in mid-2020.

Industry reaction

Several industry groups and associations voiced initial support for the payment models, citing the potential for practices to see better Medicare payments in the coming years.

“Many primary care physicians have been struggling to deliver the care their patients need and to financially sustain their practices under current Medicare payments,” Gerald E. Harmon, MD, immediate past chair of the American Medical Association (AMA) Board of Trustees, said in a statement. “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.”

Similarly, the Healthcare Leadership Council (HLC) voiced its support for the primary care models, which could lower costs overall and address the needs of those with chronic illnesses.

“One of the most encouraging aspects of the announcement today is the emphasis on the patients who account for the greatest proportion of healthcare costs, those with serious illnesses and multiple chronic conditions,” HLC President Mary R. Grealy said in a statement. “We strongly support the continued movement toward coordinated care for this patient population and the new payment models’ incentives for providers to treat these high-need patients.”

Physician groups, including America’s Physician Groups, which called the Initiative a “win for patients and the physician groups who care for them.” The American Academy of Family Physicians, which represents more than 130,000 physicians and medical students, applauded the introduction of the new payment models, as well, noting a higher investment in primary care could have a significant impact on patient health.