If they build it, will they come?

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On April 22, the Department of Health and Human Services (HHS) unveilednew alternative payment models that it hopes will “transform” primary care to support high-value care. Released at a briefing hosted by the American Medical Association and attended by me and other ACP officials and members (and hundreds of other “stakeholder” groups, plus the news media), the proposals would create more voluntary options for primary care physicians and their practices to be paid for keeping patients healthy and out of the hospital.

One of the new models, called Primary Care First, “will focuson advanced primary care practices ready to assume financial risk in exchange for reduced administrative burdens and performance-based payments.  The other, called the Direct Contracting (DC), is directed at large systems that have the experience and capabilities to take on substantial financial risk for large numbers of patients.

In today’s post, I am only going to summarize the key elements of the Primary Care First (PCF) model, taken mostly from CMS’s fact sheet, because it’s expected to be available to far more internists than the Direct Contracting model.

Practice Eligibility: To be eligible to participate in the PCF model, a practice must include “primary care practitioners, (MD, DO, CNS, NP and PA), certified in internal medicine, general medicine, geriatric medicine, family medicine and hospice and palliative medicine.”  It must have 125 attributed Medicare beneficiaries at a particular location, have primary care services account for at least 70% of the practices’ collective billing based on revenue, and in the case of a multi-specialty practice, 70% of the practice’s eligible primary care practitioners’ combined revenue must come from primary care services. It must also “have experience with value-based payment arrangements or payments based on cost, quality, and/or utilization performance such as shared savings, performance-based incentive payments, and episode-based payments, and/or alternative to fee-for-service payments such as full or partial capitation.” 

Geographic locale: The practice must be in one of the 26 regions selected for the program: Alaska (statewide), Arkansas (statewide), California (statewide), Colorado (statewide), Delaware (statewide), Florida (statewide), Greater Buffalo region (New York), Greater Kansas City region (Kansas and Missouri), Greater Philadelphia region (Pennsylvania), Hawaii (statewide), Louisiana (statewide), Maine (statewide), Massachusetts (statewide), Michigan (statewide), Montana (statewide), Nebraska (statewide), New Hampshire (statewide), New Jersey (statewide), North Dakota (statewide), North Hudson-Capital region (New York), Ohio and Northern Kentucky region (statewide in Ohio and partial state in Kentucky), Oklahoma (statewide), Oregon (statewide), Rhode Island (statewide), Tennessee (statewide), and Virginia (statewide).

Simplified payment structure: Each practice accepted into the program will be paid what CMS calls a “simplified payment structure” consisting of risk-adjusted per beneficiary per month (PBPM) payments, plus a flat set amount for each office visit. It will get a “performance based adjustment providing an upside of up to 50% of revenue as well as a small downside (10% of revenue) incentive to reduce costs and improve quality, assessed and paid quarterly.”  A different [and higher] payment structure will apply to PCF practices that agree to treat seriously ill patients that are currently lacking a primary care practitioner.

Predictable revenue and reduced administrative burdens: CMS believes that PCF will appeal to a wide range of primary care physicians and their practices, including those in small and solo practices, because the risk-adjusted PBPM payments will provide them will predictable revenue each month, with limited downside risk (maximum 10% reduction) and substantial upside potential gains (50% of revenue). Administrative burdens will be also less, because the flat office visit fee eliminates the need to document different levels of office visits. Administrative burdens might also be reduced if PCP practices only have to report on a more focused set of quality measures.

By building the PCF program as described above, CMS believes that primary care physicians will come to it, like the baseball fans drawn to the cornfield baseball diamond in Field of Dreams. CMS needs them to come, because as a completely voluntary program, there has to be enough physicians, practices, and patients participating to assess the model’s effectiveness and reproducibility.  But will they?

It’s too soon to tell.  

 As ACP observedin a generally supportive statement issued today, there are elements of the PCF model that suggest that CMS is on the right track: there are a variety of payment and delivery models offered that support internal medicine and primary care practices, from smaller and independent practices to larger integrated ones; there is a range of risk options available to practices, and the new models aim to reduce administrative burdens—potentially allowing physicians to spend more time with their patients.

However, a lot of details are still missing that may determine how many physicians and practices will seek to participate, including basic things like how the PBPM payments will be adjusted by risk, the amount of those payments, and how they are to be calculated. Also, unless other payers join Medicare in supporting PCF practices with a simplified payment structure and more focused measures, practices may not experience the reduction in administrative burdens and predictable revenue that CMS anticipates. Presumably, CMS will be releasing such information soon, prior to the enrollment period it intends to begin this summer.

ACP concluded its statement with a note of caution: “The success and viability of these models will depend on the extent that they are supported by payers in addition to Medicare and Medicaid, are adequately adjusted for differences in the risk and health status of patients seen by each practice, are provided predictable and adequate payments to support and sustain practices (especially smaller independent ones), are appropriately scaled for the financial risk expected of a practice, are provided meaningful and timely data to support improvement, and are truly able to reduce administrative tasks and costs, among other things. ACP will continue to evaluate the new payment and delivery models based on such considerations, and we look forward to working with CMS and to continue advocating for ways to support the value of primary care for physicians and for all patients across the health care system.”

If CMS really wants primary care physicians to come to the models they’ve built, these – and other practical considerations – need to be included in their design. We’ll soon find out if they will.