The Primary Cares Initiative Aims to Bring Change to Care Delivery Through New Payment Models

In April, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) announced the Center for Innovation’s Primary Cares Initiative (PCI), which will provide interested primary care practices and other healthcare providers with new payment models for value-based care.

Healthcare stakeholders have long advocated a shift from quantity to quality payment in primary care delivery, and these models seek to bring change.

“For years, policymakers have talked about building an American healthcare system that focuses on primary care, pays for value, and places the patient at the center,” HHS Secretary Alex Azar said in the Initiative’s announcement. “These new models represent the biggest step ever taken toward that vision.” 

Two New Payment Models

CMS’s Primary Cares Initiative will consist of two paths: Primary Care First and Direct Contracting.

Primary Care First Model Options

The Primary Care First (PCF) path will test whether performance-based payments for advanced primary care services in smaller practices result in reduced total care costs, enhanced quality of life, and improved health outcomes.

The PCF model options, according to CMS, are based on the underlying principles of its regionally-based, multi-payer advanced primary care medical home initiative, Comprehensive Primary Care Plus (CPC+).

This path, which will start its five-year experimental phase in 26 regions in 2020, will involve two payment models: Primary Care First (PCF) – General and Primary Care First – High Need Populations.

Both models will offer a flexible payment structure for providers. The PCF – General, for instance, will offer a monthly population-based payment, plus a flat primary care visit fee. The PCF – High Need Populations model, in contrast, will offer monthly payments that reflect the high-need, high risk of the seriously ill population (SIP), plus a payment increase or decrease, dependent on quality.

PCF’s value-based payment models will present providers with more flexibility to expand their service offerings and provide team-based, whole-person care to their patients. This flexibility not only includes coordinating and addressing their patients’ medical needs but also their patients’ social needs to improve health outcomes.

Many primary care physicians agree that they should address social determinants of health (SDoH) factors in patients but said they lack the time and resources to do so, according to the results of a 2017 SDoH Survey by the American Academy of Family Physicians (AAFP). Interested providers will now have the opportunity to use CMS’s financial incentives to better their services offerings through investments in technology and staff.

Direct Contracting Model Options

The Direct Contracting (DC) path aims to reduce expenditures and preserve the quality of life for Medicare fee-for-service (FFS) beneficiaries. 

Unlike the PCF path, DC will offer risk-sharing arrangements to a broader range of health and innovative organizations with financial risk taking experience, including Medicaid Managed Care Organizations (MCOs), Medicare Accountable Care Organizations (ACOs), and Medicare Advantage organizations, CMS wrote in a fact sheet.

This CMS PCI path builds on innovative approaches from the following models: Medicare Accountable Care Organizations (ACO), Next Generation ACO (NGACO), and Medicare Advantage (MA). It will contain three flexible payment model options: DC-Professional, DC-Global, and DC-Geographic. 

The global option will offer participants the highest risk—100% savings and losses, plus a monthly payment for all services, compared to the professional option, which will offer participants the lowest risk—50% savings and losses, plus a monthly payment for enhanced primary care services.

The geographic option will offer participants 100% responsibility for the total cost of care in a defined region. CMS seeks public feedback to further refine this model—and will launch it in 2021.

Under the DC path, organizations will have more flexibility and financial resources to deliver comprehensive and coordinated care to beneficiaries, including dual-eligible (Medicare and Medicaid) beneficiaries and patients with complex chronic and serious needs.

Shifting Payment From FFS to APMs

PCI aligns with CMS’ efforts to shift reimbursement away from the FFS payment model to value-based, or alternative payment models (APMs). The agency anticipates better alignment for nearly 11 million Medicare FFS beneficiaries; participation and payment options for 25% primary care practitioners and other healthcare providers; and new community care coordination opportunities for at least 11 million dual eligible beneficiaries.

Research links primary care with lower mortality and a better healthcare experience. Yet, a small percentage of total Medicare health spending goes toward primary care, a RAND study found. 

CMS took a step toward change through the creation of its CPC+ program. It seeks to further invest in change through its PCI program—incentivizing practitioners and providers to deliver advanced patient-centered care and improved quality outcomes—at lower costs.

“Our Primary Cares Initiative,” said CMS Administrator Seema Verma in a press release, “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.”

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