Two new CMMI payment models aim to shift primary care towards value in Medicare

On April 23, Department of Health and Human Services (HHS) Secretary Alex Azar announced the CMS Primary Cares Initiative, revealing a new set of payment models through the CMS Innovation Center (CMMI) aimed at transforming primary care to deliver better value in Medicare. "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 Secretary 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. [They] 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," he added.

The new Primary Care First (PFP) model, a five-year voluntary program geared toward individual practices, builds off learnings from Comprehensive Primary Care Plus (CPC+). Under PFP, providers receive monthly, capitated payments for caring for patients, along with the potential for performance-based payment adjustments. The new Direct Contracting (DC) model is designed for a wider array of medical organizations and serves as a replacement for the Next Generation Accountable Care Organization (ACO) model. Options under the DC payment model allow providers to bear full or partial financial risk for treating their patients.

CMS anticipates the new payment models will result in better alignment for a quarter of all Medicare fee-for-service (FFS) beneficiaries — 5 million in the DC payment model and 6.4 million in the PCF payment model. CMS also says the models will provide additional payment options for one in four primary care practitioners.

For more information, visit the following links and see model summaries below:

• Fact Sheet on the CMS Primary Care Initiative
• Fact Sheet on the CMS Primary Care First payment model; More information on the model
• Fact Sheet on the Direct Contracting payment model; More information on the model
• Direct Contracting — Geographic Request for Information

Primary Care First

The PCF model, designed for smaller practices, is aimed at testing whether delivery of advanced primary care can reduce the total cost of care. PCF offers two options for advanced primary care practices ready to assume financial risk in exchange for reduced administrative burden and performance-based payments.

Payment and incentives: Under the PCF model, providers receive a per-member-per-month (PMPM) payment to cover the total cost of care. Providers can also receive a quarterly performance-based adjustment of up to 50% of revenue, or a small downside (10% of revenue), based on quality measures such as controlling high blood pressure, managing diabetes mellitus, and screening for colorectal cancer.

PCF tracks: The PCF model includes two tracks — for General and High Need Populations — both featuring a PMPM fee for providers to cover the total cost of care. The High Need Populations track encourages advanced primary care practices to take responsibility for seriously ill populations (SIP) who currently lack a primary care practitioner and/or effective care coordination and provides higher payments for their care.

Eligibility: Applicants must be within the 26 selected PCF regions; provide primary care health services to a minimum of 125 attributed Medicare beneficiaries; have primary care services that account for at least 70% of the practices' collective billing; and meet other requirements of the PCF Participation agreement.

Timeline: CMS anticipates releasing a Request for Application in spring 2019 for the first cohort practices. The program will be tested for five years and is scheduled to begin in January 2020. CMS anticipates accepting another round of applications during 2020, with participation beginning in January 2021.

Direct Contracting

The DC model, designed for larger provider organizations, includes three payment model options for participants to take on risk and share in savings, providing choices related to cash flow, beneficiary alignment, and benefit enhancements:

• DC-Professional track: Direct Contracting Entities (DCEs) in the DC-Professional track will bear risk for 50% of shared savings/shared losses on the total cost of for aligned beneficiaries. DCEs will receive a capitated, risk-adjusted monthly payment for enhanced primary care services equal to seven percent of the total cost of care for enhanced primary care services.
• DC-Global track: DCEs in the DC-Global track will bear risk for 100% of shared savings/shared losses on the total cost of care for aligned beneficiaries. DCEs will be able to choose between two payment options: Primary Care Capitation, or Total Care Capitation. Total Care Capitation refers to a capitated, risk-adjusted monthly payment for all services provided by DC Participants.
• DC-Geographic track: Similar to the DC-Global track, Geographic DCEs will bear risk for 100% of shared savings/shared losses on the total cost of care for aligned beneficiaries in a target region. Geographic PBP DCEs 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. HHS is currently soliciting public feedback of the details of the geographic model.

Participant selection: CMMI will request a Letter of Intent (LOI) from organizations interested in either the Professional or Global options and will subsequently release a Request for Applications (RFA) for interested organizations. CMS expects to initiate the application process for the Geographic option in the fall of 2019.

Timeline: DC payment model options will start in January 2020 with an initial alignment year for organizations that want to align beneficiaries to meet the minimum beneficiary requirements. Performance periods will begin January 2021 and will be five years.

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