On April 22, The Center for Medicare and Medicaid Innovation (the Innovation Center) at the Centers for Medicare and Medicaid Services (CMS) announced a new Primary Cares Initiative, with two new payment models aimed at increasing the number of care providers participating in value-based care. Both models represent CMS’s continued efforts to provide flexibility to participants by making capitated payments while establishing responsibility for total cost of care. Other welcome changes for providers include a smaller set of quality measures on which providers must report and CMS’s promise of more actionable, timely data at both the participant and provider level.
The Primary Care First (PCF) Model
The Primary Care First (PCF) Model will be the Innovation Center’s next iteration of its Comprehensive Primary Care model (essentially track three of the CPC+ model) and will offer monthly, up-front population-based payments, with additional payments for each office visit. Participating practices are eligible to receive up to a 50% payment bonus based on financial and quality performance and will be responsible for a downside risk of 10%.
Within the PCF Model, practices may elect to participate in a Severely Ill Population option, where providers engage newly identified, seriously ill population patients or those who lack care coordination for the conditions. In this iteration, which CMS hopes will also be enticing to practices that specialize in treatment of severely ill patients (as well as hospice and palliative care clinicians), practices will receive enhanced payments to ensure care coordination and that patients are clinically stabilized.
The Direct Contracting (DC) Model
The Direct Contracting (DC) Model is the next generation Next Generation Accountable Care Organization (Next Gen ACO) Model. Despite its name, DC is arguably not a direct contracting model — at least as the term has commonly been used to date. At first blush, it does not appear to be a significant departure from the existing Next Gen ACO. So, what is DC as presented by CMS? The new model will offer two tracks: a Global PBP track for experienced ACOs and a Professional PBP track for participants with less experience with risk and care coordination. CMS is also soliciting comment on a potential Geographic PBP track, under which participants would assume responsibility for the total cost of care for all Original Medicare beneficiaries in a defined target region.
Under Global PBP, the ACO — now called a Direct Contracting Entity under this rebranding — will take on 100% risk for prospectively enrolled beneficiaries and will receive monthly capitated payments for either all claims or for enhanced primary services. If the ACO elects full capitation for all services, the ACO must take on payment of claims to providers. Under Professional PBP, the ACO will share in 50% of savings or losses on risk-adjusted total cost of care for aligned beneficiaries and will receive monthly capitated payments for enhanced primary care services. Both tracks “begin” in January 2020 so that participants may begin aligning beneficiaries; however, the first performance year, for purposes of payments and financial responsibility, begins January 2021.
While the announcement outlined the broad parameters of the two DC tracks, CMS provided few details on how benchmarks will be calculated. Without this information, it is difficult to assess how providers will respond to this opportunity. In welcome news for existing model participants, CMS did confirm that the regional benchmark and trend components will “capitalize on MA rate calculations,” using the Medicare rate book for regional cost and trend. However, we do not know whether DC will follow the Medicare Shared Savings Program (MSSP) and cap the regional benchmark at 50% (with 50% historical benchmark) or whether it will provide a pathway to a 100% regional benchmark. To the extent DC uses a historical benchmark, we also do not know how CMS plans to trend that figure forward. Because benchmarks are everything with respect to an organization’s success in a model (and a model’s ability to reward success), these unanswered questions will be pivotal in any organization’s decision between DC and MSSP.
The new models may indeed turn out to be welcome news and important new opportunities for providers willing to embrace risk. Though they are, perhaps, less dramatic than their branding might suggest, we encourage providers to carefully consider these models as new details emerge and suggest that they represent another step in the gradually unfolding value-based health care revolution.