Monday, May 13, 2019

The Disappointing Details About the CMS “Primary Care First” Payment Model

The most important element of a truly “value-based” healthcare system is strong primary care.  The reason is simple – the lowest spending and the best outcomes occur when patients stay healthy, and primary care is the only component of the healthcare system that is specifically designed to help patients prevent health problems from occurring and to identify and treat new problems as early as possible.

Unfortunately, the nation’s primary care system is at risk of collapse.  There is a large and growing shortage of primary care physicians in the country; many primary care physicians are burning out, and most medical students don’t want to go into primary care.  Although there are multiple causes for this, a major reason is the failure of the current payment system to provide adequate resources to support high-quality primary care services.  The problems are particularly severe for small primary care practices, which deliver most of the care in rural areas of the country.

In April 2019, the U.S. Department of Health and Human Services announced the “CMS Primary Cares Initiative,” consisting of five new payment model options intended to “transform primary care to deliver better value for patients throughout the healthcare system.”  The full specifications of the new Primary Cares Initiative options have not yet been released, but based on the details revealed so far, it appears they may fall far short of what is needed to fully address the problems facing primary care and to successfully sustain a high-value primary care system. 

The Problems with Primary Care First

Among the five options in the Primary Cares Initiative, “Primary Care First” is the only option that a small primary care practice will be able to participate in.  The “Direct Contracting” options are only available to practices that have at least 5,000 Medicare patients, which is far more patients than solo and small primary care practices will have.  In fact, most of the counties in the United States don’t even have 5,000 Medicare beneficiaries living in them.

Unfortunately, there are nine major problems with Primary Care First that prevent it from creating the kind of payment system that small primary care practices need in order to deliver high-quality care to their patients and stay afloat financially:

1. Practices Would Still Receive a Significant Portion of Revenues Based on the Number of Face-to-Face Office Visits.  Primary care practices have called for elimination of a payment system that pays for office visits and little else, but instead of doing this, Primary Care First actually creates a brand-new $50 fee for each face-to-face office visit.  Although it also would provide a flexible $24 per-patient per-month payment, more than 40% of a typical practice’s payments would still be tied to face-to-face visits.  Under Primary Care First, a practice that is able to care for patients effectively with fewer office visits will lose revenue and could be unable to cover its costs.

2. Payments for Many Patients Would Not be More Flexible at All.  A practice would only receive the new, flexible monthly payment for patients who are “attributed” to the practice based on where they received care in the past, and new patients would not be attributed for up to two years.  Patients could “voluntarily align” with the practice, but this requires the patient to create an account on the CMS website and go through a multi-step process to designate the PCP as their primary clinician.  Even if the patient successfully completes this process, the practice will have to wait 3-6 months to begin receiving the new payments. 

3. Practices Would No Longer Receive a Higher Payment for a Patient Who Has Greater Needs.  In the current fee-for-service payment system, a primary care practice receives more payment when it provides care to a patient with greater needs.  But under Primary Care First, a primary care practice would receive the exact same monthly payment and the same office visit payment for a patient regardless of how sick or healthy the patient is. 

4. Most Practices Would Receive No More Revenue Than They Do Today, and Less Revenue Than Under Other CMS Primary Care Models.  While opinions differ about the best methodology for paying for primary care, there is widespread agreement that primary care practices need to be paid more than they are paid today.  But CMS has indicated that the combination of the PBPM payments and office visit fees in Primary Care First are intentionally designed to provide no more revenue than current fee-for-service payments.  Despite receiving no additional revenue, however, a Primary Care First practice would be expected to deliver expanded services, including 24/7 access to a care team member, care management services, and integrated behavioral healthcare services.

5. Most Practices Would Receive Little or No Reward Based on Their Performance.  The “Performance-Based Adjustment” in Primary Care First could increase the amount a practice is paid by as much as 50%.  However, it appears that the majority of practices would only be able to receive a 3.5% increase in their total payments.  At most 10% of participating practices would be able to receive a 50% increase in payment, while every practice could have its payments cut by 10% if it fails to achieve high scores on quality measures or if its patients are hospitalized frequently. 

6. Accountability Measures Are Not Patient-Centered.  Under Primary Care First, delivering high-quality care would merely enable the practice to avoid a reduction in payment; the practice would only qualify for an increase in payment if its patients were hospitalized less frequently than the patients in other practices.  Moreover, a hospital admission for injuries in a traffic accident, for planned surgery to treat cancer, or for complications of chemotherapy administered by an oncologist would be treated the same as an avoidable admission for a chronic disease exacerbation, putting the practice at risk for things it can’t control.  The heavy weight placed on hospitalization rates is presumably designed as an incentive to focus attention on patients who have a high risk of hospitalization, but it could also cause practices to avoid accepting sicker patients or to reduce services to other patients.

7. Practice Revenues Would Be Unpredictable and Uncontrollable.  Because most of the costs in a primary care practice are fixed, a primary care practice needs to be able to predict how much it will receive each month in order to be sure it will have enough revenues to cover the costs of hiring additional personnel to deliver expanded services to its patients.  The current design for Primary Care First will make it impossible for primary care practices to predict how much they will be paid.  For example, in a small practice, one or two unexpected hospital admissions could result in a 7% reduction in payments.

8. Payment Complexity Would Increase and Administrative Burdens Would Remain High.  Although CMS says that Primary Care First will “allow clinicians to focus on caring for patients rather than their revenue cycle,” the practice’s “revenue cycle” will actually become more complex than it is today.

9. Most Primary Care Practices in the Country Will Be Unable to Participate.  Even if a primary care practice wants to participate in Primary Care First, it will not be able to do so if it is located in Alabama, Arizona, Connecticut, the District of Columbia, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas (other than the Kansas City metro area), Kentucky (other than the Cincinnati metro area), Maryland, Minnesota, Mississippi, Missouri (other than the Kansas City area), Nevada, New Mexico, New York (other than the Buffalo and North Hudson regions), North Carolina, Pennsylvania (other than the Philadelphia Region), South Carolina, South Dakota, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, or Wyoming.  More than 40% of the Medicare beneficiaries in the country will not have an opportunity to receive care from a primary care practice participating in either Primary Care First or the Comprehensive Primary Care Plus initiatives.

The Direct Contracting Options Are Not Options for Most Primary Care Practices

Only large primary care practices with at least 5,000 beneficiaries would be eligible to participate in the new “Direct Contracting” options in the CMS Primary Cares Initiative.  Although they could receive a large, flexible “population-based payment” to deliver primary care services, they would also be required to pay CMS for 50%-100% of any increases in total Medicare spending for their patients beyond whatever benchmark spending level CMS establishes.  Even a small increase in total Medicare spending would represent a large proportion of a primary care practice’s revenue, putting the practice at risk of bankruptcy if it does not have large financial reserves available. 

Changing Primary Care First So It Provides the Support Small Primary Care Practices Need

Fortunately, it would be relatively easy for CMS to modify the details of the Primary Care First initiative to solve the problems described above.  Nine specific changes would enable CMS to create the kind of payment model that smaller primary care practices have been seeking.  These changes are based on the two primary care payment models recommended by the Physician-Focused Payment Model Technical Advisory Committee (PTAC) that were developed by the American Academy of Family Physicians (AAFP) and Jean Antonucci, MD (a solo primary care physician practicing in rural Maine).

1.  Pay practices with a monthly per-patient payment in place of all fees for office visits. 

2.  Pay a higher monthly amount for a patient who has greater needs. 

3.  Set monthly payment amounts at levels adequate to support high-quality primary care.  The monthly payment under Primary Care First should be no less than $65 per patient in 2020, and ideally even higher.  The monthly payment amounts for patients with more complex needs should be higher than this average amount.

4.  Begin paying monthly payments immediately when a patient enrolls for care in the primary care practice.  CMS already does this for Chronic Care Management (CCM) payments under the Medicare Physician Fee Schedule – as soon as a patient consents to receive CCM services, the physician practice can begin delivering the services and receiving payment for them.  A similar approach should be used in Primary Care First.

5.  Create billing codes so that primary care practices can classify patients appropriately and receive timely monthly payments for each patient.

6.  Evaluate performance using patient-centered outcome measures with achievable performance targets. 

7.  Establish performance-based rewards and penalties that create manageable levels of financial risk for small primary care practices.  The total adjustment to the monthly payment based on all aspects of performance should be no more than 15% of the monthly payment amounts, which in turn would be much higher than the payments primary care practices receive today.  Moreover, if every primary care practice performs well, every primary care practice should be rewarded for doing so, rather than limiting rewards to a small subgroup of practices. 

8.  Create a complementary payment model to support home-based palliative care for seriously ill patients.  Patients with serious illness need home-based palliative care, not just primary care.  Small primary care practices don’t have enough patients with serious illness to enable them to deliver palliative care services cost-effectively, and the payment amounts in the Primary Care First option for Seriously Ill Patients are far below what is needed to support palliative care services alone much less primary care, too.  In addition to an improved Primary Care First program for primary care practices, CMS should implement the payment models for palliative care that were developed by the American Academy of Hospice and Palliative Medicine (AAHPM) and the Coalition to Transform Advanced Care (CTAC), both of which were recommended for implementation by PTAC over a year ago. 

9.  Allow primary care practices in all parts of the country to participate in the revised Primary Care First program.  Every Medicare beneficiary deserves to receive high quality primary care services, and every beneficiary with a serious illness deserves to receive palliative care services.  Primary Care First should be expanded so that every primary care practice in every state has the opportunity to participate, and so that palliative care services can be delivered in every community.

More details on all of these changes are in The Problems With Primary Care First and How to Fix Them.

The Goal of Primary Care is to Improve Patients’ Health, Not Just to Save Money for Medicare

Higher and more flexible payments for primary care will enable primary care services to not only stay afloat but to deliver better services to their patients.  This will result in fewer avoidable hospitalizations, fewer unnecessary tests, and fewer inappropriate referrals to specialists, which in turn will produce significant savings for Medicare on these types of services.  However, it may be unrealistic to expect that these savings will be sufficient to fully offset the cost of the higher payments needed to adequately support primary care, much less to achieve net savings overall, during the 5-year time period typically used in CMS evaluations.  Placing more financial risk on primary care practices is more likely to accelerate the loss of primary care providers than to achieve greater savings for Medicare. 

Because of the need to take a longer-term view of the value of primary care, the Center for Medicare and Medicaid Innovation (CMMI) may not be the appropriate mechanism for successfully addressing the problems facing primary care.  It seems increasingly likely that Congressional action will be needed to create a truly effective primary care payment system.  The biggest benefits of primary care will be seen beyond the five-year time horizon used in CMMI demonstration projects, through slowing the progression of chronic disease and even preventing some diseases from occurring at all, not just trying to avoid hospitalizations for those who already have such conditions.  Only Congress can authorize making investments designed to achieve these longer-run benefits.  Consequently, in addition to revising Primary Care First to make it as successful as possible within current statutory constraints, CMS should ask Congress for the authority to create the kind of primary care payment system that the country truly needs.

NOTE: This post was authored by Harold Miller. Although Miller is a member of the Physician-Focused Payment Model Technical Advisory Committee (PTAC), the comments in this post are his personal opinions, and are not intended to represent the position of the PTAC as a whole or of other individual members. PTAC’s statutory charge is limited to reviewing proposals for payment models that are submitted to it by stakeholders, and it has no role in advising HHS or CMS other than submitting comments and recommendations on the proposals it receives.



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