On April 22, 2019, the Centers for Medicare & Medicaid Services (CMS) Innovation Center announced the Primary Cares Initiative (PCI), which will present eligible providers and other entities with the opportunity to engage in value-based payment and direct contracting payment models for primary care beginning in January 2020. CMS designed PCI to reduce expenditures and preserve or enhance quality of care for beneficiaries in Medicare fee-for-service (FFS). PCI is comprised of two tracks, Primary Care First (PCF) and Direct Contracting (DC). The PCF track, which builds on the Comprehensive Primary Care Plus (CPC+) initiative, is intended for individual primary care practices and seeks to reward providers for reductions in hospital utilization and total cost of care through performance-based payment adjustments. Also, under the PCF track, practices that specialize in serving high-need and/or seriously ill populations will receive adjusted payments to account for the populations served. Providers that participate in these models will qualify as participating in an Advanced Alternative Payment Model and be eligible to receive full bonus payments under CMS’s Medicare Incentive Payment System (MIPS).
The DC track is intended for a broader set of stakeholders with experience accepting financial risk and serving larger patient populations. Medicare Advantage plans can also apply for DC, although details are forthcoming. Entities interested in pursuing DC can choose from one of three models; DC Professional, DC Global; DC Geographic (see table below). The form of the capitated payment they receive will depend on the model they select. The capitated arrangements range from reimbursing for a portion of the expected primary care costs to the total cost of care. At a conference earlier this week, CMS indicated the DC payment benchmarks would be based on a prospective blend of historical spending and adjusted regional Medicare Advantage (MA) expenditures.
Both the PFC and the DC emphasize voluntary assignment of beneficiaries into provider entities, which allows for beneficiaries to select the provider with which they want to establish and maintain the primary care relationship. This differs from the mandatory assignment method common with Accountable Care Organizations (ACO), which typically “attributes” beneficiaries to an ACO based on the primary care provider from which the beneficiary receives a “majority” of care. The only exception to this is the DC Geographic model, which incorporates all beneficiaries in a target region. Beneficiaries would also continue to maintain their choice of provider, and they would not be limited to the PCI participant network.
CMS has not yet provided the complete details of each of the models, but the agency has indicated that additional information will be provided through a Requests for Applications (RFAs) process which will begin in Spring 2019. Model details that are currently available are summarized in the table below. CMS also issued a Request for Information (RFI) on the DC Geographic model to identify potential refinements and will likely not launch this particular model until 2021. CMS also noted that this model would use a separate benchmarking methodology, based on a one-year historical fee-for-service spend for the region, but this would be finalized based on responses to the RFI. RFI Responses are due no later than May 23, 2019.
| Pathway | Model | Eligible Participant(s) | Model Description |
| Primary Care First (PCF) | PCF General | Primary care practitioners certified in internal medicine, general medicine, geriatric medicine, family medicine, and hospice and palliative medicine in 26 designated regions, in addition to other criteria | Monthly population- based payment and flat primary care visit fee as well as performance-based adjustment providing upside up to 50% revenue/downside up to 10% revenue |
| PCF High Needs | Same as above | Similar to above. Payment amounts will be set to reflect the high need, high risk nature of the population as well as include an increase or decrease in payment based on quality | |
| Direct Contracting (DC) | DC Professional | Health care providers operating under a common governance structure with attention given to advancing primary care, Medicare ACOs, Medicaid MCOs that serve dual eligible beneficiaries | Primary Care Capitation: Risk adjusted monthly payment equal to seven percent of total cost of care for enhanced primary care services; 50% shared savings/losses |
| DC Global | Same as above | 1) Primary Care Capitation (see above); or 2) Total Cost of Care Capitation: risk adjusted monthly payment for all services provided by participants and subcontracted providers | |
| DC Geographic | In addition to the above, health plans, health care technology companies and “other entities” | Total Cost of Care Capitation (see above) for beneficiaries in a target region |
Following a series of CPC+ and Medicare Shared Savings Program (MSSP) ACO evaluation reports finding that upside-only arrangements do not generate across-the-board savings, CMS now encourages providers and other entities to transition to payment and care delivery models with downside risk. The new models also provide alternatives to Medicare Advantage (MA) contracting for those that are not included in MA networks or pursue value-based payment opportunities outside of the MA program. CMS has indicated that they expect one in four primary care providers to participate. However, the level of participation will be influenced by additional details regarding eligibility and selection criteria, payment benchmarking and risk adjustment, and other information that will likely be addressed in the RFAs or subsequent guidance.
HMA will continue to monitor developments regarding the PCI. For more information or questions about the PCI or HMA’s Medicare capabilities, please contact Mary Hsieh or Jon Blum.