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Centers for Medicare and Medicaid Services unveils five primary care payment model options

Primary Care First will pay practices through a simplified total monthly payment to allow clinicians to focus on care rather than revenue cycle.

Susan Morse, Managing Editor

Providers can voluntarily participate in five primary care models that offer two types of financial incentives, including a global capitation option for health systems already taking financial risk.

Department of Health and Human Services Secretary Alex Azar and Centers for Medicare and Medicaid Services Administrator Seema Verma announced the CMS Primary Cares Initiative today.


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CMS said it received stakeholder feedback from advanced primary care practices expressing interest in accepting increased financial risk in exchange for greater flexibility and fewer requirements.


The five payment model options are: Primary Care First; Primary Care First–High Need Populations; Direct Contracting – Global; Direct Contracting – Professional; and Direct Contracting – Geographic.

Primary Care First will provide payment to practices through a simplified total monthly payment to will allow clinicians to focus on caring for patients rather than their revenue cycle, CMS said.

PCF also includes the Primary Care First–High Need Populations model that provides higher payments to practices that specialize in care for patients who have complex, chronic needs or who are seriously ill.

Under both options, primary care providers will get performance-based payment adjustments based on key outcomes on clinical quality measures, such as controlling high blood pressure, managing diabetes mellitus, and screening for colorectal cancer.

Primary Care First will be tested for five years and is scheduled to begin in January 2020. A second application round is also planned for January 2021.

While the PCF models are focused on individual primary care practice sites, the Direct Contracting payment model aims to engage a wider variety of organizations that have experience taking on financial risk, such as Accountable Care Organizations, Medicare Advantage plans, and Medicaid managed care organizations. 

The Direct Contracting payment model options are designed to create a competitive delivery system environment, CMS said.

Organizations offering greater efficiencies and better quality of care will be financially rewarded through a fixed monthly payment that can range from a portion of anticipated primary care costs to the total cost of care.

Participants in the global payment model option will bear full financial risk, while those in the professional payment model option will share risk with CMS.

Again, the model options give participants a more predictable revenue stream, CMS said.

They include a focus on care for patients with complex, chronic needs and seriously ill populations, as well as a voluntary alignment option that allows beneficiaries to align with the healthcare provider of their choosing.

CMS is seeking public comment on one DC payment model option with an expected performance period launch in January 2021.

The Geographic Population-Based option is designed to offer organizations the opportunity to assume responsibility for the total cost of care and health needs of a population in a defined target region.

Given the novelty of this option, CMS is seeking public comment through a new Request for Information.


The five payment model options will test whether financial risk and performance-based payments work to reduce cost and keep, or improve, quality of care and outcomes.

Through the Center for Medicare and Medicaid Innovation, from which the Primary Cares Initiative was launched, CMS has tested numerous value-based arrangements.

Empirical evidence has shown that strengthening primary care is associated with higher quality, better outcomes, and lower costs within and across major population subgroups, CMS said.

Despite this, primary care spending accounts for a small portion of total cost of care, and is even lower for patients with complex, chronic conditions.

The five payment model options administered could provide better alignment for over 25 percent of all Medicare fee-for-service beneficiaries, CMS said. The nearly 11 million Medicare beneficiaries includes a collective 5 million in the DC payment model and a collective 6.4 million in PCF payment model options.

It could offer opportunities for an estimated one in four, or 25 percent, of primary care practitioners as well as other healthcare providers.

It could create new coordinated care for a large portion of the 11-12 million beneficiaries dually eligible for Medicare and Medicaid, specifically those in Medicaid managed care and Medicare fee-for-service.

CMS said it based the design of these payment model options on considerable stakeholder input and previous innovation models, including Comprehensive Primary Care Plus.

CMS is also releasing the first annual evaluation report for CPC+, detailing the implementation experience over the first year for practices that started participating in the model in January 2017.


"For years, policymakers have talked about building an American healthcare system that focuses on primary care, pays for value, and places the patient at the center. These new models represent the biggest step ever taken toward that vision," said HHS Secretary Alex Azar.
"Building on the experience of previous models and ideas of past administrations, these models will test out paying for health and outcomes rather than procedures on a much larger scale than ever before."

"As we seek to unleash innovation in our healthcare system, we recognize that the road to value must have as many lanes as possible," said CMS Administrator Seema Verma. "Our Primary Cares Initiative is designed to give clinicians different options that advance our goal to deliver better care at a lower cost while allowing clinicians to focus on what they do best: treating patients."

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