The Centers for Medicare & Medicaid Services (CMS) continues to lead the charge in the paradigm shift from traditional fee-for-service (FFS) to value-based healthcare. These models also shift financial risk to the providers. These changes are often met with pessimism and apprehension. However, CMS continues to introduce new and updated models to help with the transition for healthcare providers by giving them more options.
In April, CMS announced a new initiative that is specifically designed to help primary care providers make the transition to value-based payments; the CMS Primary Care Initiative. This initiative offers two pathways: Primary Care First and Direct Contracting. Five new payment models are included in those two pathways. These new models are anticipated to improve care coordination for more than 25 percent of all Medicare FFS beneficiaries.
Pathway: Primary Care First (PCF)
This pathway is ideal for smaller primary care practices and provides payments to practices through a simple total monthly payment, therefore reducing the administrative burden while participating in the program.
In addition to the flat monthly fee, there is a performance-based adjustment with an upside of 50 percent as well as 10 percent downside risk. PCF includes two models, both of which incentivize providers to reduce hospital utilization and total cost of care.
The General model is designed for primary care practices with advanced primary care capabilities that are prepared to assume large financial risk in exchange for flexibility and potential as performance-based payment.
Model: High Needs Populations
The High Needs Population model will offer more money to practices that specialize in care for patients with high needs and seriously ill beneficiaries who lack a PCP and/or effective care coordination.
Pathway: Direct Contracting (DC)
The Direct Contracting pathway includes three models and is designed to target a wider range of organizations that have experience in multiple risk sharing arrangements and was built off the core concepts and lessons learned from Medicare’s NexGen ACO, Medicare Shared Savings Program (MSSP), and Medicare Advantage plans.
The Professional model is the least risky of the three models under DC. Like the ACO structure, participating and preferred providers are defined at the TIN/NPI level. This model has 50 percent shared savings/losses on the total cost of care with an additional Primary Care Capitation equal to 7 percent of total cost of care for enhanced primary care services.
The Global model has the ACO structure as well. This model, however, is riskier than the Professional model with 100 percent of shared savings/losses (i.e. full risk). The Global model also has the option for Primary Care Capitation or Total Care Capitation.
Like the Global model, the Geographic model is full risk. Unlike Global or Professional models, CMS is open to payers and providers positioned to take on the risk of all Medicare lives in a given region. Rather than attribution by historical encounters, patients would be associated with organizations based on geography. This represents an opportunity for integrated health systems to gain tight alignment in caring for their entire community of Medicare lives. Additionally, CMS has intentionally left this model undefined as they are seeking solutions to be proposed by the community of payers and providers.
Even though the new payment models are voluntary, it is anticipated that nearly 11 million beneficiaries will shift from traditional FFS Medicare into value-based payment relationships because of this new Primary Care Initiative. Organizations that have found success with other value-based arrangements will benefit from the new models; specifically, the Direct Contracting models which were heavily designed around the NexGen ACO model.
The transition to value-based care is moving full speed ahead and more options and programs are being presented to encourage adoption and provide opportunities for greater success. To be successful under these agreements, providers need to not only focus on delivering the best outcomes, but also on managing their resources effectively. As the saying goes, you can’t manage what you can’t measure. The introduction of downside risk and capitated payments increases the need for effective tools that will analyze costs related to outcomes and align financial incentives. Therefore, the ultimate goal is to empower providers with actionable insights that will assist them in making better decisions for patient care.
Pulse8’s Illumin8TM Active Intelligence platform aggregates disparate data and provides advanced analytics that will help at-risk providers monitor their contract and track their clinical performance. Pulse8’s Provider Solutions offer insight into cost and utilization both inside and outside of the network. This will help avoid redundancy and waste, as well as shed light on the financial impact of these associated services. For more information, visit Pulse8 here.