Q&A: Why Medicare's new primary care payment model is a big deal.

Topics: Care Models, Federal Government, Regulatory, Hospitals, Physicians, Payments and Reimbursement

CMS recently announced a new alternative payment model called Comprehensive Primary Care Plus (CPC+), which will test a new way to reimburse primary care physicians.

All physician practices that participate in the five-year care model, which launches in January 2017, will be required to provide preventive services and 24/7 access to care. CMS will pay incentives upfront to all participating practices, but providers will have to return the payments if their performance falls short of certain quality and utilization metrics.

CMS announces new value-based primary care model

The program could be another step away from fee-for-service -- and give participating providers new tools to rethink primary care delivery. But how does it fit into existing the landscape of alternative payment models, and how could it cause providers to change their businesses?

American Health Line's Sam Bernstein took these questions to an expert: Rivka Friedman, a practice manager at The Advisory Board Company, who leads strategic research in support of employed and integrated medical group executives.

Question: It can be hard to keep track of what counts as big news in health care. Where does CPC+ rank in significance compared with other CMS efforts to promote value-based care—and how quickly will providers have to act to participate? 

Rivka Friedman: I would say it falls somewhere in the middle. CPC+ is not likely to have the same impact as Medicare's ACO program, Medicare Shared Savings Program (MSSP), in terms of disruption and sending a signal about the future of Medicare payment.

For one thing, the initiative works only with physician practices, whereas MSSP includes both medical groups and health systems. In addition, CPC+ is not a nationwide effort, and medical groups don't have the first say. It will be limited to certain regions, which CMS will select based on interest from payers. After that, medical groups and physician practices in the selected regions can apply to be a part of CPC+.

But the rollout will be fast. To apply, payers have to express interest by June 1, and sometime after that CMS will announce the 20 participating regions. Then practices will have from July 15 to September 1 to apply.

Q: After the program launches, what are the day-to-day implications for participating providers?

Friedman: There are several ways CPC+ is going to afford medical groups and physician practices more flexibility to redesign care delivery.

First, CPC+ may enable primary care practices to incorporate more services that are not currently billable -- such as conversations with caregivers -- or that don't contribute much to their margins, like telehealth and behavioral health. Those are currently hard to make profitable but necessary for patients. Essentially, CPC+ helps align physician practice incentives with patient health incentives.

Second, the program will allow practices to offer patients concurrent services that have historically not been billable on the same day. For instance, if you see a patient for a wellness visit, and you find he or she also has unmet psychosocial care needs, you cannot -- in many cases -- bill for physical health and behavioral services on the same day. CPC+ tries to solve that with a care management fee that can support delivering those services.

Finally, the program's care management fees may change how clinicians delegate and utilize the rest of the care team. Many states have scope-of-practice regulations that restrict what you can assign to, and bill from, other members of the care team. Under CPC+, practices may be able to delegate more effectively because the care management fee can help pay for services orphaned by traditional payment models. 

Q: For people who don't follow developments in alternative payment models closely, how does CPC+ relate to previous programs? For instance, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provides bonus payments for physicians with sufficient participation in alternative payment models. Do we know yet if CPC+ will count toward a provider's alternative payment model threshold?

Friedman: This is one of the biggest and most important unanswered questions about CPC+: We don't yet know how it will interact with all the other physician pay-for-performance initiatives, or whether it will count toward the alternative payment model threshold.

In some ways, CPC+ seems to be a revamping and refocusing of the advanced medical home concept. Notably, the CMS actuary hasn't designated any of the existing medical home initiatives as an alternative payment model under MACRA, and we'll be watching closely to see whether this model gets included.

Should CPC+ count as an alternative payment model, I think CMS would be signaling that it is their preferred evolution of the advanced medical home concept. But we will not know if CPC+ qualifies until CMS releases the MACRA proposed rule, which should come out very soon. I think that will factor into whether or not some practices choose to participate in CPC+, because the program is likely to be less appealing if it doesn't count toward a provider's alternative payment model threshold. That will be an even larger factor because CPC+ won't allow providers to be concurrently involved in the MSSP.

Q: Are there any other major unanswered questions about CPC+?

Friedman: One major question is how many private payers will sign up to participate.

The multi-payer nature of CPC+ is a critical feature that allows practices to design care around a consistent payment model. It's a feature the program shares with the Comprehensive Primary Care Initiative (CPCI), a pilot CMS launched in 2012 that has similar features to CPC+, although it is more limited in scope.

But to date, CPCI hasn't shown improvements in care quality or savings sufficient to cover care management fees to providers. Given the similarities -- and differences -- between CPC+ and CPCI, it will be interesting to see if payers will have strong enough incentives to participate, which in turn will be an important factor in practices' decisions to apply for the new program.

Q: Overall, it sounds like there is a lot to be excited about in CPC+. What is the most significant aspect of the program?

Friedman: CPC+ and the advanced medical home are not overly prescriptive -- which is a positive aspect of both programs. But the number one potential improvement in CPC+ is that it will offer medical groups more flexibility in the way they redesign care delivery.

The message from CMS to physicians and medical groups is, "Go do what you need to do, and we'll pay upfront so you can invest in hitting your cost care-improvement goals."

It is also worth noting that CPC+ is not as focused on paying for outcomes as many other CMS alternative payment model programs, such as MSSP. Under that program, clinicians are rewarded based on how much money they save Medicare. The CPC+ program takes a different approach: It tries to reduce Medicare spending by investing in care redesign upfront and essentially believing in the care models that providers are committing to pursue.

Q: So there is not a significant element of risk with CPC+ for providers?

Friedman: Exactly. CPC+ involves only upside for participating practices.

Notably, the CPC+ payments will be prospective and consistent, including monthly care management fees and the upfront potential performance bonus. At the end of the year, they can lose some of the performance bonus if they don't hit their goals. But the majority of dollars are guaranteed -- an investment that CMS is making for providers to transform care, independent of whether those efforts save money down the road.

One way to get a sense of the financial impact CPC+ could have is to calculate the value of payments to your average CPCI practice.

The Center for Medicare and Medicaid Innovation estimates that a practice participating in Track 1 of CPC+ that is similar in size to the average practice participating in CPCI will receive $126,000 annually plus performance payments of $21,000. For Track 2 the figures are $235,200 and $33,600 respectively.