Navigating health reform
Primary Care First and Direct Contracting Models Spark Interest
In April 2019, the Centers for Medicare & Medicaid Services (CMS) and the Centers for Medicare & Medicaid Innovation (CMMI) released two new primary care model types — Primary Care First and Direct Contracting — and early reactions to the announcement are positive.
…a win for patients and the physician groups who care for them. For years, our members have demonstrated that patient-centered, integrated, and accountable care can address the low-quality, high-cost care that comes with a fragmented fee-for-service healthcare system…Giving even more physicians the option of participating in responsible payment models will open the throttle on the movement from volume to value and improve the health of populations across America. Don Crane, President and CEO America’s Physician Groups
…Primary Cares Initiative…is a critical step toward recognizing the importance of primary care…We applaud the introduction of new primary care delivery and payment models, and we look forward to working with CMS and CMMI on testing and developing these models so they are available, attractive and workable for all primary care practices, including those that are small and/or rural. John Cullen, MD, President, American Academy of Family Physicians
Many primary care physicians have been struggling to deliver the care their patients need and to financially sustain their practices under current Medicare payments. The new primary care payment models will provide practices with more resources and more flexibility to deliver the highest-quality care to their patients. Gerald E. Harmon, MD, Immediate Past Chair, American Medical Association Board of Trustees
It’s always the right time for physicians to move to positions of greater accountability for better outcomes – both clinical and economic. Alan Hoops, Managing Principal, CareConnectMD, in an interview with CLA
Key model design elements
- Capitated, ongoing payments
- Prospective beneficiary alignment
- Voluntary beneficiary alignment
- Added flexibilities
- Reduced administrative burden
- Intended to be A-APMs
Both model types are intended to provide flexibility and predictability with financing that supports the delivery of coordinated, ongoing primary care. They both move participants towards financial risk, a key goal of the Department of Health and Human Services (HHS). While not finalized, they are also designed to be Advanced Alternative Payment Models (A-APMs).
Direct Contracting model: CareConnectMD perspective
CareConnectMD (CCMD), a CLA client, has been managing care for patients in the nursing home setting for more than two decades. They use an integrated care delivery model that improves patient care, reduces overall system costs, and increases patient and family satisfaction.
“In introducing these new programs, CMS is focusing specifically on primary care physicians and enhancing their roles as overall care managers and coordinators. This is particularly applicable to the institutionalized patients. They present multiple chronic conditions, frailty, and mental decline, all of which must be managed against the backdrop of end of life planning. Direct Contracting offers both the financing and flexibility to address these complex needs that historical Fee-For-Service cannot address.” Alan Hoops
Due to its focus on institutionalized patients, CCMD has previously participated in an Institutional Special Needs Plans (I-SNP) and provided a glimpse of how DC compares to an I-SNP.
“With respect to I-SNPs, on the pro side, DC is faced with far less state regulations than an I-SNP,” said Hoops. “The DC organization is not required to be licensed in every state nor have state required reserves. DC organizations can operate in multiple states through its CMS contract and, therefore, achieve scale more efficiently. Also, through the patient attribution system, DC organizations are not required to market as I-SNPs. Finally, patients and clinicians have far more flexibility and choice with DC than I-SNPs.”
Choose from three population-based payment options
Under DC, there are three population-based payment (PBP) options for practices to choose from:
- Professional PBP — With the lowest risk level, this model provides capitated payments based on seven percent of the total cost of care for enhanced primary care services, as well as allowing for 50 percent of shared savings and losses.
- Global PBP — This model moves risk-sharing to a full 100 percent of shared savings and losses while providing capitation payments based either on total care or primary care. A quality requirement will also apply.
- Geographic PBP — Details are still being developed for this model.
Now that DC is available, CCMD is considering moving quickly from an ACO in favor of the DC Global PBP model.
“Far and away the most attractive feature of Direct Contracting is upfront payment (prepayments),” said Hoops. “This provides cash for investment and provides for flexibility in creating a network. With prepayment, investments can be made in programs, systems, and staff to address the longitudinal needs of the attributed patients. Without prepayment, organizations are left with only billable services to generate resources to fund management infrastructure.”
In addition to the stability and flexibility that prepayments provide, additional flexibility includes allowing for expanded telehealth use and a waiver from the three-day inpatient stay rule. Further, the DC model may allow nurse practitioners to certify home health services and non-homebound individuals to receive home health. The model also provides prospective beneficiary alignment and voluntary beneficiary alignment.
“The waivers help DC make important contributions to care and cost containment,” said Hoops. “Keep in mind, the underlying regulations that are being waived are there primarily to justify the payment of a claim. They are not based on the overall long-term needs of the patient but rather the documentation of a particular service (visit). Waivers allow us to allocate resources to areas of need regardless of claims payment considerations.”
Primary Care First model
CMMI’s new Primary Care First (PCF) model has two available tracks (PCF and PCF Special Illness Population [SIP]), and practices may elect to participate in one or both tracks. Under the PCF model, monthly population-based payments will be made based on the average risk-adjusted population of that practice plus a $50 flat fee for any face-to-face visits. Additional dollars are available (or taken back) based on performance, which is measured by acute care hospitalizations, including against national and peer benchmarks. A third performance measure relates to continuous improvement.
Primary Care First Model (2020) will be available statewide in the following states: AK, AR, CA, CO, DE, FL, HI, LA, MA, ME, MI, MO, NE, NH, NJ, ND, OK, OR, RI, TN, and VA.
It will also be available in the following regions: Greater Buffalo region (NY), Greater Kansas City region (KS and MO), Greater Philadelphia region (PA), Ohio and Northern Kentucky region (statewide in Ohio and partial state in Kentucky), and North Hudson-Capital region (NY).
For the PCF SIP, there will be an added one-time payment of $325 for the first visit with SIP patients, plus monthly payments of $275 PBPM during the first 12 months. There will be a flat rate of $50 for face-to-face visits, and the potential of up to $50 in quality payments. In addition, hospice and palliative care clinicians can partner with PCF practitioners.
The PCF models are designed to build upon the Comprehensive Primary Care+ model currently in process, while continuing to advance to higher levels of two-sided risk. The PCF models are intended to be advanced Alternative Payment Models, though that is still being finalized. The PCF models will be available only in 26 states.
How we can help
CLA is continually keeping up with new CMMI developments. Together, we can explore the opportunities DC and PCF can bring to your organization and help you strategically plan for health care’s ongoing move towards risk.
Ready to take the next step toward these new models? DC Letters of Intent (LOI) are currently being accepted and must be submitted by August 2. Once available, PC non-binding LOI must also be submitted to CMS to participate.