Providers could benefit from boosts to research, public health in HHS spending bill
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Senior Manager, Health Research Institute, PwC USMay 03, 2019
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Primary care providers will have five new ways to be paid for care they provide to Medicare beneficiaries after this week’s announcement by HHS Secretary Alex Azar that the department is focusing on transforming payment for primary care.
The two Primary Care First models are designed with primary care physician practices in mind, according to CMS. Participating practices will receive a population-based payment, a flat primary care visit fee and a performance-based adjustment. The adjustment, assessed and paid each quarter, will range from a penalty of 10 percent of revenue to a bonus of 50 percent of revenue. Unlike CMS’ other primary care model, Comprehensive Primary Care Plus (CPC+), practices will not be paid a care management fee. Primary care practices serving at least 125 Medicare beneficiaries in 26 regions are eligible to participate, according to CMS.
CMS’ three Direct Contracting models are aimed at organizations serving Medicare fee-for-service beneficiaries that also have experience managing risk-based arrangements. Organizations participating in Direct Contracting – Professional will receive capitation of 7 percent of the total cost of care for primary care services, plus 50 percent of any savings or losses (CMS will keep the other 50 percent), according to CMS. In Direct Contracting – Global, organizations can choose to receive capitated payments for primary care services only, or for all care, and keeping, or absorbing, 100 percent of any savings or losses.
HRI impact analysis
The primary care initiative is in line with the Trump administration’s campaign to move the industry toward value-based care, which itself is a continuation of the Obama administration’s drive toward the same. CMS launched another value-based primary care model in January 2017, CPC+, which by the end of 2018 had attracted more than 14,000 primary care practitioners, 3,000 practices and 79 payers, according to data released by CMS.
One of the main goals of value-based care is to encourage providers to focus on prevention and coordination of care in the hopes that quality will go up while costs go down. So far, according to CMS, the CPC+ model has shown little evidence this is happening yet, with service use and quality-of-care outcomes remaining about the same. When considering additional payments made to CPC+ practices by CMS, spending on Medicare beneficiaries was about 2 to 3 percent higher. The lack of early results does not mean the shift to value-based primary care is a bust, but it does indicate that any change will come slowly.