Payment & Delivery Models

Medicare’s major new primary care pay model: Know the facts


Medicare’s alternative payment models (APMs) for primary care practices are works in progress, with the recently announced Primary Cares initiative coming in response to physician-developed proposals. A new analysis takes a point-by-point approach to explain what physicians should know about it in comparison with Medicare’s current APM demonstration project.

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Physician proposals inspire new HHS pay models for primary care

Primary Cares, shaped with substantial physician input, was unveiled in April by Health and Human Services Secretary Alex Azar at the AMA’s Washington office.

“Providing adequate financial support for high quality primary care must be an essential element of any strategy to improve the quality and affordability of our country’s health care system,” Gerald E. Harmon, MD, said at the time. Dr. Harmon is a family physician and a member of the AMA Board of Trustees.

The initiative introduces Primary Care First (PCF), a streamlined, potentially higher-paying APM that provides an alternative to the current five-year demonstration project, Comprehensive Primary Care Plus (CPC+) that was launched in 2017.

PCF is scheduled to be available in January 2020, and ultimately will be offered in 26 states and metropolitan regions, eight more than CPC+. Practices in CPC+ regions will have to wait a year before they can apply for PCF. Primary Cares also creates a direct contracting option, but the qualification threshold—at least 5,000 Medicare patients—places it out of reach for solo and small practices.

The AMA’s analysis, “Medicare Alternative Payment Models for Primary Care,” is one in a set of AMA resources that provide detailed, physician-focused insights on Medicare APMs and the APM-enabling Medicare Access and CHIP Reauthorization Act.

Both CPC+ and PCF devote significant payments tied to patient face-to-face medical office visits and monthly payments to cover additional non-face-to-face services for patient care. Payments to practices are increased or decreased on quality and utilization factors that a PCP can influence—not for factors they can’t control, such as drug prices.

The AMA analysis includes a detailed chart, with dollar amounts, comparing PCF with the two-track CPC+ system. The chart addresses the APM provisions in terms of fundamental PCP concerns with traditional Medicare fee-for-service (FFS) payments. Here are the high points.

Payment flexibility. To provide for PCPs to deliver patient services other than traditional face-to-face office visits, PCF provides a flexible monthly Professional Population-Based Payment in place of all E/M fees plus $50 for each office visit. The two CPC+ tracks approach the matter with combinations of a monthly Care Management Fee (CMF), Performance-Based Incentive Payment (PBIP) flexible quarterly Comprehensive Primary Care Payment (CPCP) and adjustments to E/M fees.

Resources to support primary care services. PCF currently proposes monthly payments ranging from $24 to $175—the same for every patient in the practice—depending on average risk score of patient panel. Under CPC+ the per-patient Care Management Fee the increases between $6 and $100 per month based on the individual patient’s risk score, along with a smaller positive adjustment in the PBIP. In CPC+ Track 2, the CPCP is increased by 10% over historical E/M revenue.

Bonuses and penalties tied to measures that PCPs can control. Under PCF, the monthly payment is increased by up to 50% if minimum quality performance is met and the risk-adjusted rate of total hospitalizations is below other PCF practices. The downside risk is a 10% pay reduction if quality is poor or hospitalizations are high. In CPC+, the PBIP is reduced by up to 50% if risk-adjusted rates of emergency department visits and total hospitalizations are higher (worse) than non-CPC+ practices. The PBIP is cut by up to 100% if experience and quality measures are below national averages.

The AMA analysis also presents a nine-point, comprehensive examination of the downstream revenue impact of the two plans. Here are some highlights.

Operating at top performance, PCF practices could outearn CPC+ practices. As currently proposed, PCF standard payments are designed to match current Medicare payments, but the highest-performing practices could receive significant increases in payment—higher than the maximum they could receive under CPC+.

Under CPC+, payments are more stable. All CPC+ practices receive higher payments than under standard fee-for-service regardless of their performance on quality and utilization measures. However, the full PBIP is at performance-based risk on those measures.

Meanwhile, payments to PCF practices could vary significantly from quarter to quarter based on changes in hospitalization rates relative to other practices, which a PCF will not know in advance.

PCF offers a Seriously Ill Population (SIP) option providing enhanced payment. SIP is focused on patients, with no current primary care provider, who require palliative care or other management for serious conditions. Monthly SIP payments are much larger than the biggest CPC+ Care Management Fees.