Exploring Value-Based Payment Models Under Primary Care First

April 25, 2019 - On April 22, 2019, HHS unveiled the Primary Cares Initiative, a program that aims to reduce administrative burdens and enable primary care providers to focus more time on patients while decreasing healthcare costs.

The initiative includes five value-based payment models through two tracks: Primary Care First (PCF) and Direct Contracting. The former is geared towards smaller primary care practices and includes two payment models that reward practices for delivering value through advanced primary care, while the latter contains higher levels of financial risk and is designed for larger organizations with value-based payment experience.

Together, both tracks represent a “pivotal, hockey stick moment in paying for value in American healthcare,” HHS Secretary Alex Azar said in a press conference announcing the program.

Primary care has a significant impact on downstream costs and quality, he continued. However, primary care currently accounts for a small portion of overall healthcare spending. In fact, a recent study shows primary care represents as little as two percent of total Medicare spending.

“This initiative will radically elevate the importance of primary care in American medicine, move toward a system where providers are paid for outcomes rather than procedures, and free doctors to focus on the patients in front of them, rather than the paperwork we send them,” Azar said.

READ MORE: Providers, Execs Applaud Medicare’s Primary Cares Initiative

To understand how the Primary Cares Initiative will achieve reduced administrative burden, improved outcomes, and lower costs, RevCycleIntelligence.com explores the program’s first track – PCF – and how its value-based payment models will impact primary care providers.

What is Primary Care First?

Primary Care First is a set of voluntary five-year payment model options that will reward primary care practices for delivering valuable, high-quality care using advanced primary care services starting in 2020, CMS explains in a fact sheet.

The track is built on the underlying principles of the Comprehensive Primary Care Plus (CPC+), a national multi-payer advanced primary care home model that uses flexible and performance-based payments.

The CPC+’s principles include prioritizing the doctor-patient relationship, improving care for patients with complex chronic needs and high need, seriously ill patients, reducing administrative burden, and implementing financial rewards for improved health outcomes.

PCF will be based on the same principles and will offer primary care practices in 26 regions the opportunity to test whether advanced primary care – which broadens the scope and responsibilities of traditional primary care to emphasize patient-centered, coordinated, team-based care – can reduce total cost of care, improve patient experience, and enhance quality.

READ MORE: Investing in Primary Care Delivers Value-Based Care Results

CMS also designed PCF to accommodate practices at various stages of financial risk adoption readiness.

PCF will focus on advanced primary care practices that are prepared to assume a limited level of financial risk, adds the CMS Innovation Center, which will administer the track. In exchange for financial risk adoption, CMS will reduce billing and administrative burdens, as well as institute performance-based payments.

PCF will also encourage advanced primary care practices to improve care for high need, seriously ill patients. The track will offer practices treating seriously ill populations, including providers who typically deliver hospice or palliative care services, greater financial incentives for improving care for the patient population.

How providers will get paid under PCF

CMS plans to lower costs and improve patient outcomes through PCF by giving providers a more flexible payment structure compared to fee-for-service and other value-based reimbursement models.

At the base of the PCF payment structure are risk-adjusted population-based payments and flat primary care visit fees. The monthly payments will give practices the flexibility to deliver advanced primary care in and outside of the office, CMS explains.

READ MORE: Six Characteristics of High-Value Primary Care Practices

CMS will also adjust reimbursement based on quality performance. The quarterly adjustment will provide an upside of up to 50 percent of revenue and a modest downside of 10 percent of revenue. CMS intends for the adjustment to incentivize practices to reduce acute hospital utilization, as well as meet quality and care experience thresholds.

Participating primary care practices will be financially and clinically accountable for beneficiaries attributed via claims. The track will also offer a voluntary alignment opportunity and allow practices to proactively identify seriously ill and unmanaged beneficiaries attributed to their practice.

The payment structure described is the primary payment model option for PCF. But primary care practices will have the opportunity to earn more revenue through PCF by treating seriously ill patients.

Earning higher payments by treating seriously ill patients

PCF will offer a second payment model option that centers on caring for seriously ill and high need patients.

The second payment model option, known as the high need populations payment model option, encourages and incentivizes advanced primary care practices, including practices with clinicians that deliver hospice and palliative care services, to become accountable for high need, seriously ill patients who currently do not have a primary care practitioner and/or effective care coordination.

Under the high need populations payment model option, practices will receive a greater population-based payment that reflects the high-need, high-risk nature of the seriously ill population (SIP). The model option will also include an increase or decrease in payment based on quality, CMS adds.

To qualify for the higher payments, practices must show in their PCF applications that they have a network of relationships with other care organizations in the community. CMS wants to ensure practices in the high need populations payment model option have access to the comprehensive services SIP patients require for their longer-term needs.

Practices demonstrating relevant capabilities and care experience will have the option when they apply to agree to be attributed and deliver services to SIP patients that CMS will identify in their area. SIP patients must also opt-in to be attributed to a practice.

Selected practices will then be responsible for communicating with attributed SIP patients and coordinating their care.

PCF participation

CMS designed PCF for primary care practices with advanced primary care capabilities that are also ready to assume increased financial risk. But the agency also has several other participation requirements for primary care practices, including:

• Located in a PCF region
• Includes primary care practitioners (MD, DO, CNS, NP, and PA), certified in internal medicine, general medicine, geriatric medicine, family medicine, and hospice and palliative medicine
• Provides primary care services to at least 125 attributed Medicare beneficiaries at a specific location
• Has primary care services represent 70 percent of the practices’ collective billing based on revenue
• Has experience with value-based reimbursement arrangements
• Uses 2015 certified EHR technology, exchanges data with other providers through application programming interfaces (APIs), and connects with the regional health information exchange
• Demonstrates via the application a limited set of advanced primary care capabilities, including 24/7 access or call line and empanelment of patients to a practitioner or care team
• Meets the requirements of the PCF participation agreement

Clinicians enrolled in Medicare and who usually provide hospice or palliative care services can also participate in PCF and deliver care to SIP patients under the high need populations payment model option. The clinicians can join PCF by either practicing as a practice in the PCF general payment model option or partnering with a practice participating in the general payment model option.

CMS expects to release a request for application in the spring of 2019 for the first cohort of primary care practices. Selected practices part of the first application round will start the track in January 2020 and continue for five years.