CMS launches new data-driven primary care payment models

The Centers for Medicare and Medicaid Services on Monday announced a set of alternative approaches designed to reward primary care practices for patients’ health outcomes, not procedures.

The data driven-CMS Primary Cares Initiative, which has a five-year performance period, is voluntary and will offer providers five new value-based payment model options under two paths: Primary Care First and Direct Contracting.

“The two sets of new payment models are projected to enroll a quarter—or more—of traditional Medicare beneficiaries and a quarter of providers and arrangements that pay for keeping patients healthy, rather than ordering procedures,” said Health and Human Services Secretary Alex Azar during Monday’s press conference announcing the CMS Primary Cares Initiative.

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Adam Boehler, director of the Center for Medicare and Medicaid Innovation, which will administer the CMS Primary Cares Initiative, added that the agency’s effort will drive healthcare delivery reform by achieving better health at lower cost.

Boehler said that although primary care represents just 2 percent to 3 percent of spend, PCPs “have an enormous influence over downstream costs,” which is why CMS has decided to focus on this area of healthcare.

“The general Primary Care First payment model option is designed for (smaller) primary care practices with advanced primary care capabilities that are prepared to accept increased financial risk in exchange for flexibility and potential rewards based on practice performance,” according to CMS.

To be considered for the general Primary Care First payment model (which has two options), eligible applicants must—among other requirements—be primary care practices that: use 2015 Edition Certified Electronic Health Record Technology, support data exchange with other providers and health systems via an application programming interface, as well as connect to their regional health information exchange.

“CMS will also encourage other payers—including Medicare Advantage Plans, commercial health insurers, Medicaid managed care plans and State Medicaid agencies—to align payment, quality measurement and data sharing with CMS in support of Primary Care First practices,” states the agency.

A request for application will be released this spring for the first cohort of payers and practices, which will begin participation in the model in January 2020.

“We anticipate accepting another round of Primary Care First applications during 2020, and that any practices accepted to participate in Primary Care First during 2020 would begin participation in the model in January 2021,” according to CMS.

Direct Contracting, which is aimed at larger practices with at least 5,000 Medicare fee-for-service beneficiaries, is more ambitious than Primary Care First and will allow these provider organizations to have greater flexibility to spend resources how they want and to come up with innovative ways to care for patients, commented Azar.

“Just like in Primary Care First, when patients have a better experience and stay healthier, these practices will make more money,” Azar added. “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.”

According to CMS, the Direct Contracting payment model options are meant to engage a wider variety of organizations that have experience taking on financial risk and serving larger patient populations, such as Accountable Care Organizations, Medicare Advantage plans and Medicaid managed care organizations.

“The payment model options include a focus on care for patients with complex, chronic needs and seriously ill patients, as well as a voluntary alignment option that allows beneficiaries to align with the healthcare provider of their choosing,” states CMS.

Under the Direct Contracting path, three payment model options will be available beginning in January 2020, with an initial alignment year for organizations that want to align beneficiaries to meet the minimum beneficiary requirements. The five-year performance periods for these models will start in January 2021.

“Today’s announcement creates innovation in primary care that has the potential to entirely transform our fee-for-service system—which is about 65 percent of the Medicare program—into one that drives value,” said CMS Administrator Seema Verma.