Public Payers News

CMS Unveils New Value-Based Care Models for Primary Care Providers

CMS will launch new value-based care payment models that will transform primary care delivery and reduce healthcare costs.

CMS unveils new value-based care models for primary care providers

Source: Thinkstock

By Jessica Kent

- CMS and HHS have announced the CMS Primary Cares Initiative, a new set of value-based care payment models that will strengthen primary care and deliver better value for patients.

The CMS Primary Cares Initiative will reduce administrative burdens and empower primary care providers to spend more time with patients while reducing healthcare costs, the agencies said.

CMS noted that strengthening primary care is associated with higher quality, lower costs, and better outcomes. However, primary care spending accounts for just a small portion of total care costs. The agency expects that incentives for primary care clinicians will improve the quality and cost-effectiveness of patient care.

“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. These new models represent the biggest step ever taken toward that vision,” said HHS Secretary Alex Azar.

“Building on the experience of previous models and ideas of past administrations, these models will test out paying for health and outcomes rather than procedures on a much larger scale than ever before. These models can serve as an inflection point for value-based transformation of our healthcare system, and American patients and providers will be the first ones to benefit.”

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The CMS Primary Cares Initiative will provide primary care practices with five new payment models under two paths: Primary Care First and Direct Contracting.

The Primary Care First (PCF) model options will test whether financial risk and performance-based payments will reduce total Medicare spending and improve health outcomes. PCF will feature a simplified monthly payment to practices that will allow clinicians to focus on caring for patients instead of their revenue cycle.

PCF also includes a payment model option for high-need populations. This model provides higher payments to practices that specialize in care for high-need patients, such as those with chronic conditions and serious illnesses.

Both PCF models incentivize providers to reduce hospital utilization and total cost of care by rewarding them through performance-based payment adjustments. These models aim to improve key quality-based clinical measures, such as blood pressure control, diabetes management, and cancer screenings.

PCF will be tested for five years and is scheduled to begin in January 2020. A second application round is also scheduled for participants in January 2021.

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In addition to the PCF models, CMS is launching three Direct Contracting (DC) payment models. The DC payment model options are also focused on transforming primary care, enabling primary care providers to take greater control of managing costs for Medicare fee-for-service beneficiaries.

While the PCF models are focused on individual primary care practice sites, the DC model options aim to engage a broader range of organizations, like accountable care organizations (ACOs), Medicare Advantage (MA) plans, and Medicare managed care organizations (MCOs).

The DC payment model options are designed to create a competitive delivery system environment that will reward organizations that create greater efficiencies and high-quality care. The payment model options include a focus on patients with complex chronic needs, as well as a voluntary alignment option that enables beneficiaries to align with the provider of their choice.

Some of the options include a fixed monthly payment that can range from a portion of anticipated primary care costs to the total cost of care.

Those participating in the global model option will ultimately bear full financial risk, while participants in the professional payment model option will share risk with CMS. This will offer participants a wide range of financial risk arrangements while also providing a more predictable revenue stream.

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CMS is also seeking public comment on one DC payment model option, called the Geographic Population-Based model, with an anticipated performance period launch in January 2021.

This model option is designed to offer innovative organizations the opportunity to assume responsibility for the total cost of care and health needs of a population. CMS expects that the payment model will empower communities to design population-specific strategies.

CMS expects that these five payment models will provide better alignment for over 25 percent of all Medicare fee-for-service beneficiaries, as nearly 11 million beneficiaries would be included in the models.

The pathways will also offer new participation and payment options for approximately one in four primary care providers and provide new care coordination opportunities for eligible Medicare beneficiaries.

CMS developed all five payment models after reviewing stakeholder input from advanced primary care practices. The new options will also expand care options for chronically and seriously ill patients who don’t have a primary care provider, allowing these patients to receive care from a practice participating in the models.

CMS expects that its Primary Cares Initiative will innovate healthcare delivery, strengthen primary care, and improve outcomes for patients.

“As we seek to unleash innovation in our healthcare system, we recognize that the road to value must have as many lanes as possible,” said CMS Administrator Seema Verma.

“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.”