New Value-Based Payment Models for Primary Care (Primary Care First and Direct Contracting)

August 28th, 2020 - Jared Staheli
Categories:   Medicare   Home Health|Hospice   Internal Medicine  
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The process of shifting the behemoth that is the U.S. healthcare system from a fee-for-service (FFS) system to a value-based system continues unabated with five payment models announced by CMS aimed at the delivery of primary healthcare services. CMS anticipates that roughly a quarter of Medicare FFS beneficiaries would be included in the models, along with a quarter of primary care practitioners, representing a titanic shift in how CMS pays for care and how healthcare organizations operate should these estimates hold up.

Primary Care First (PCF)

1. Primary Care First offers an evolution of the Comprehensive Primary Care Plus (CPC+) model for practices willing to take on more financial risk. While the aim of providing advanced comprehensive primary care (i.e., Track 2 CPC+ requirements) remains, PCF will not include the care management fee aimed at helping practices transition to and implement the CPC+ model. It also continues the move away from a fee-for-service payment structure with a risk-adjusted professional population-based payment (PBP) and a flat primary care visit fee. PCF also retains performance-based payment adjustments, more than doubling the potential upside adjustment to 50% of revenue at the cost of a possible downside risk of up to 10% of revenue.

2. Primary Care First - High Need Populations operates like the PCF model above, but also includes higher payments to practices that specialize in care for high need patients.

The goal of these models is to shift practices away from a focus on managing their revenue cycles with the simplified payment structure, and as always, reduce costs while increasing the quality of care and patient outcomes through a "focus on the underlying principles of the existing CPC+ model design: prioritizing the doctor-patient relationship; enhancing care for patients with complex chronic needs and high need, seriously ill patients, reducing administrative burden, and focusing financial rewards on improved health outcomes."

Read the rest of the CMS Fact Sheet on PCF here.

Direct Contracting (DC)

DC is a payment model for treating Medicare fee-for-service beneficiaries aimed at organizations that already have experience with financial risk-sharing arrangements and in managing large patient populations, such as Accountable Care Organizations (ACOs). It also aims to bring in organizations with this experience but which may not have prior experience with Medicare FFS or CMS Innovation Center models more generally, including Medicare Advantage (MA) plans and Managed Care Organizations.

The idea behind DC is to provide more flexibility for organizations to meet the goals of value-based care with flexible risk-sharing and payment model options; benefit enhancements to increase beneficiary engagement and affordability, as well as the quality of care; and by allowing beneficiaries greater control over the providers they choose to align with.

3. Direct Contracting - Professional offers the lower risk-sharing arrangement—50% savings/losses—and provides Primary Care Capitation, a capitated, risk-adjusted monthly payment for enhanced primary care services.

4. Direct Contracting - Global offers the highest risk-sharing arrangement—100% savings/losses—and provides two payment options: Primary Care Capitation (described above) or Total Care Capitation, capitated, risk-adjusted monthly payment for all services provided by DC Participants and preferred providers with whom the DCE has an agreement.

5. The Direct Contracting - Geographic model would encourage participation from innovative organizations, including health plans, health care technology companies and other entities interested in entering into contractual relationships with providers and suppliers and taking on risk for a Medicare FFS beneficiary population in a defined geographic target region. CMS has not finalized this model, so be on the lookout for any news on future implementation.

Read the rest of the CMS Fact Sheet on DC here.


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