WASHINGTON – Medicare, private insurers and states are coming together in a government-sponsored project designed to improve primary care and reduce costs.

The Department of Health and Human Services and Centers for Medicare & Medicaid Services have invited states to apply for participation in the Multi-Payer Advanced Primary Care Practice Demonstration, an initiative in which Medicare will join Medicaid and private insurers in state-based efforts.

CMS anticipates as many as six states will be included in the project.

"Advanced primary care practices are one of our most promising models for improving the quality of care and bringing down healthcare costs across the country," said HHS Secretary Kathleen Sebelius. "By having Medicare participate in these demonstration projects, for the first time ever, we'll help these innovative models spread and take another big step towards building a healthcare system that works better for all Americans."

An advanced primary care (APC) practice, also known as a patient-centered medical home, is considered a leading model for efficient management and delivery of quality healthcare services. The practices promote accessible, continuous and coordinated family-centered care via a team approach and emphasize prevention, health information technology, care coordination and shared decision-making among participating patients and their providers.

The demonstration will assess the effect of advanced primary care practice, when supported by Medicare, Medicaid and private health plans, on:

• The safety, effectiveness, timeliness and efficiency of healthcare;
• Assuring access and appropriate use of services covered by Medicare, Medicaid and private health plans, while lowering expenditures;
• The ability of beneficiaries to participate effectively in decisions concerning their care; and
• The delivery of care consistent with evidence-based guidelines.

"This demonstration will mark the first time that Medicare, Medicaid and private insurers will join in a partnership with states to transform healthcare delivery," said Marilyn Tavenner, acting CMS administrator and chief operating officer. "Enabling public and private providers to work together will provide a valuable opportunity to strengthen our healthcare system and improve the quality of care for people with Medicare, Medicaid and private insurance. Improved efficiencies in the system could mean providers will be able to spend more time with their patients, provide higher quality care and better coordinate that care with other medical professionals."

To be eligible, states will need to demonstrate that they can meet certain requirements, including having a state agency responsible for implementing the program, being ready to make payments to participating practices six months after being selected for participation and having mechanisms in place to connect patients to community-based resources.

Tavenner said demonstrations like the Multi-Payer Advanced Primary Care Practice allow CMS to test new models of healthcare delivery and translate lessons learned into future policies and program redesigns. The demonstration is an example of the sort of programs that CMS will carry out under the Center for Medicare and Medicaid Innovation, which was authorized in the Affordable Care Act and will be in place by Jan. 1, 2011.

Information on the demonstration, including the solicitation, can be found on the demonstration Web site.