New Payment Models Introduced with Goal of Delivering Value-Based Transformation in Primary Care

April 25, 2019
Policy Snapshot
Alternative Payment Models (APM), Practice Management, Practitioners

This week, Department of Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced the CMS Primary Cares Initiative, a new set of payment models with a goal to transform primary care to deliver better value for patients throughout the health care system.

The CMS Primary Cares Initiative will provide primary care practices and other providers with five new payment model options under two paths: Primary Care First (PCF) and Direct Contracting (DC). The five payment model options are:

  • PCF
  • PCF – High Need Populations
  • DC – Global
  • DC – Professional
  • DC – Geographic

The PCF payment model options will test whether financial risk and performance-based payments that reward primary care practitioners and other clinicians:

  • Are easily understood
  • Have actionable outcomes that reduce total Medicare expenditures
  • Preserve or enhance quality of care
  • Improve patient health outcomes

The DC payment model options also are focused on transforming primary care, allowing health care providers to take greater control of managing the costs of care for an aligned population of Medicare Fee-For-Service (FFS) beneficiaries. While the PCF models are focused on individual primary care practice sites, the DC payment model options aim to engage a wider variety of organizations that have experience taking on financial risk and serving larger patient populations, such as Accountable Care Organizations, Medicare Advantage plans, and Medicaid managed care organizations.

CMS anticipates these five payment model options could:

  • Provide better alignment for over 25% of all Medicare FFS beneficiaries
  • Offer new participation and payment options and opportunities for an estimated 25% of primary care practitioners, as well as other health care providers
  • Create new coordinated care opportunities for a large portion of the 11-12 million beneficiaries dually eligible for Medicare and Medicaid, specifically those in Medicaid managed care and Medicare FFS

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