Health

New Primary Care Pay Models Put Emphasis on Outcomes

WASHINGTON — The Department of Health and Human Services (HHS) will launch five new payment models focused on rewarding primary care clinicians for keeping their most seriously ill patients healthy, and out of the hospital.

“This initiative will dramatically elevate the importance of primary care in American medicine, move forward a system where providers are paid for outcomes rather than procedures, and free up doctors to focus on the patients in front of them, rather than the paperwork we send them,” said HHS Secretary Alex Azar said during a press briefing Monday at the American Medical Association (AMA) office here.

The “CMS Primary Cares” initiative has multiple models along two tracks that will enroll “a quarter or more” of traditional Medicare beneficiaries, he predicted.

This is a “historic turning point in American healthcare,” and the models were years in the making, he said.

The first track, “Primary Care First,” is intended for smaller practices, and will offer providers a simple “flat stream of revenue” for each patient. “When a patient stays healthy and out of the hospital, these practices will get paid a bonus, but if a patient ends up sicker than expected, these practices will bear responsibility for the extra spending up to a certain share of their practice’s revenue,” Azar explained.

The second track, “Direct Contracting,” is geared toward larger practices with more experience taking risks. When patients stay healthy, practices will be paid more, 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,” Azar said. However, providers will also be given greater flexibility to spend resources in innovative ways and garner “significant savings” for keeping patients “healthier than expected.”

In addition, the initiative will include options for providers who want to focus on specific patient populations and specific serious illnesses, Azar said.

The second track will include an option of awarding a group a contract spanning one “geographic region” that would cover all patients and providers in that area. Such a model would allow an organization to negotiate better rates under the current Medicare system, take responsibility for outcomes, and offer benefits tailored to that particular community.

Azar noted that ideas from the American Academy of Family Physicians (AAFP), the Coalition to Transform Advance Care (C-TAC), and the American Academy of Hospice and Palliative Medicine (AAHPM) “inspired many significant aspects” of the new models. In March 2018, the Physician-focused Payment Model Technical Advisory Committee (PTAC) voted to recommend two models proposed by the C-TAC and AAHPM; in December 2017, PTAC voted to recommend an AAFP global primary care model for limited-scale testing.

Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma stressed that the goal of offering a continuum of models with varying levels of risk is to provide “as many lanes as possible” towards value-based payment.

CMS Administrator Seema Verma

Response to the initiative has been positive thus far.

“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,” said Gerald Harmon, MD, immediate past chair of the AMA Board of Trustees, in a press release.

“For decades, research has demonstrated the relationship between primary care and improved outcomes, better overall health and longer life expectancy. Recent research has shown how little investment Medicare makes in primary care. Today marks an important step toward recognizing the importance of primary care by developing payment models that value primary care,” said John Cullen, MD, AAFP president, in a statement.

Primary Care First

Adam Boehler, director of the Center for Medicare and Medicaid Innovation, noted that despite primary care spending accounting for only 2%-3% of healthcare spending, this area of care has an outsized influence on downstream costs.

He stressed that this track (as well as Direct Contracting) would be voluntary, and would target the most complex, high-need patients.

The two options for Primary Care First model would let primary care clinicians move away from fee-for-service and allow them to scrap their revenue cycle operations. CMS would pay monthly population-based payments along with a simple flat fee for primary care visits.

The model involves a potential downside-risk of 10%, and an upside risk or bonus of 50%, depending on patients’ outcomes, and performance would be measured on “risk-adjusted hospitalizations” or “the ability to keep patients health at home,” Boehler said. “For example, doctors that earn $200,000 today could earn up to $300,000 if their patients stay healthy.”

Primary Care First is slated to begin in January 2020; a request for applications is expected to be released “in the next month or so,” he added.

Direct Contracting

The Direct Contracting track has three options — professional, global, and geographic — for more “sophisticated” organizations, Boehler explained, and entities can prospectively enroll patients in order to “encourage new entrants.”

Boehler said these models are meant to improve on prior models such as the “Next Generation ACO” model.

Under the professional model, an entity would be at risk for 50% of the total cost of care — all of Medicare Part A and B spending — for beneficiaries. Entities would receive “predictable monthly payments” for offering “enhanced primary care services,” he said.

Under the global model, participating entities would take “100% accountability for savings and losses.” In addition, the entity would also receive predictable monthly payments for primary care services, or a monthly payment for all healthcare services, if they chose to pay claims.

The geographic model involves an entity assuming risk for 100% of total costs of care for all Medicare beneficiaries in a particular region.

A CMS fact sheet with more details on the initiative states that for the geographic option, entities “will be selected as part of a competitive application process and commit to providing CMS a specified discount amount off of total cost of care for the defined target region.”

Boehler said the CMS is seeking stakeholder input on the geographic model. The professional and global models are expected to begin in early 2020, with the geographic model to follow in mid- 2020, he added.

1969-12-31T19:00:00-0500

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