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Volume XI, Number 63

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Primary Care First: CMS’s New Value-Based Approach to Primary Care

As highlighted in a May 2020 Milbank Memorial Fund white paper titled, “How Payment Reform Could Enable Primary Care to Respond to COVID-19,” the COVID-19 public health emergency has driven transformation in the provision of primary care services across the country.  Whether it’s the use of telehealth technology to facilitate “virtual visits” or the development of new treatment protocols to identify and treat patients who need behavioral health support to manage the emotional challenges endemic to the public health emergency, changes in primary care delivery have drawn increased attention to the need for concomitant changes in the way primary care is financed.

As evidenced by our April 23, 2019 blog post, “CMS Announces New Initiative for Value-Based Transformation of Primary Care,” well before the emergence of the coronavirus and COVID-19, the Centers for Medicare and Medicaid Services (“CMS”) and the Center for Medicare and Medicaid Innovation (“CMMI”) had already turned its attention to primary care and the need for payment transformation as a way to facilitate and support transformation in the provision of primary care to promote quality, reduce provider administrative burdens, and “empower primary care providers to spend more time caring for patients while reducing overall health care costs.”[1]  As announced in its April 22, 2019 Press Release, CMS’s Primary Cares Initiative includes five alternative primary care payment models designed to, “transform primary care to deliver better value for patients throughout the healthcare system.”[2]

Of the five alternative payment models, the two Primary Care First (“PCF”) payment models are risk-based/pay-for-performance payment options designed to, “test whether financial risk and performance-based payments that reward primary care practitioners and other clinicians for easily understood, actionable outcomes will reduce total Medicare expenditures, preserve or enhance quality of care, and improve patient health outcomes.”  Practitioners who elect to participate in the PCF payment models are obligated to make a five-year commitment to commence on either January 1, 2021 or April 1, 2021, depending upon which PCF model is selected.

With the new year fast approaching, it is a good time to review the various features of the PCF models.

Tracks.  The PCF models offer two different payment tracks — a General Track and a Seriously Ill Population (“SIP”) Track. The General Track is for primary care practices with advanced primary care capabilities that are prepared to accept increased financial risk. The SIP Track is for practices seeking to treat high need, high risk patients who currently lack a primary care practitioner or care coordination that specifically opt to participate in the payment model option. Practices may participate in both tracks.

Eligibility.  In order to be eligible to participate in either track, a participant must (i) have a practice that is located in one of the 26 regions[3] where the PCF option is being offered by CMS and (ii) have previous experience with value-based payment arrangements.  The participant’s practice needs to include primary care practitioners who are certified in internal medicine, general medicine, geriatric medicine, family medicine, and hospice and palliative medicine.  In addition, the practice must meet certain data requirements, including: (i) Use 2015 Edition Certified Electronic Health Record Technology (CEHRT); (ii) Use Application Programming Interface (API); and (iii) Connect to their regional health information exchange (HIE). The practice must also have certain enumerated advanced primary care delivery capabilities including  24/7 access to a practitioner or nurse call line and empanelment of patients to a practitioner or care team.[4]

To participate in the General Track, primary care services must (i) account for at least 70% of the practices’ collective billing based on revenue and (ii) the practice must treat at least 125 Medicare beneficiaries annually. To participate in the SIP Track, the practice only needs to provide primary care services to 20 Medicare patients, and the practice does not need to have primary care services account for 70% of collective revenue. SIP practices have until 2022 to meet data requirements.

Reimbursement.  PCF includes a two-tiered payment structure that consists of (1) a Total Primary Care Payment and (2) a Performance Based Adjustment.

  • Total Primary Care PaymentThe Total Primary Care Payment (“TPCP”) is determined based on two sub-components: (i) a flat care visit fee, which includes telehealth and annual wellness exams, and (ii) a professional population-based payment. The professional population-based payment is paid on a quarterly, prospective basis based on the number of assigned patients. The rate is calculated by averaging the hierarchical condition categories (HCCs) scores of the participating patients. The HCC scores put practices in one of four risk groups. There is an adjustment mechanism to account for patients who receive primary care outside of the practice.

  • Performance Based Adjustment: The Performance Based Adjustment offers the potential for practices to increase their revenue by up to 50% of their TPCP or decrease revenue in the event of poor performance. The Performance Based Adjustment considers two factors: (i) regional performance and (ii) continuous improvement. To measure regional performance, the practice’s acute hospital utilization (AHU) rate is compared to an AHU minimum benchmark based on the practice’s regional reference group. To measure continuous improvement, the practice’s AHU performance is compared to the practice’s performance for the previous year.[5]

Quality.  CMS has also established certain measures in order to ensure that practices are not reducing quality in an effort to reduce hospitalization. In Year 1, participating practices will have to exceed the 50th percentile of a nationally constructed AHU rate. For Years 2-5, participating practices will have to pass a “Quality Gateway,” which will be based on five quality measures whose data CMS will collect in Year 1. Failure to meet quality benchmarks affects the Performance Based Adjustment.[6]

The application period for practices applying to begin participation in Primary Care First is now closed. Practices participating in the General Track will begin in January 2021 whereas practices participating in the SIP Track will begin in April 2021.[7]

Only time will tell if the PCF models are successful at reducing Medicare spending and increasing overall quality of patient care.  We will be watching.

FOOTNOTES

[1] CMS Press Release, April 22, 2019, “HHS NEWS: HHS To Deliver Value-Based Transformation in Primary Care.”

[2] Id.

[3] The regions are: Alaska (statewide), Arkansas (statewide), California (statewide), Colorado (statewide), Delaware (statewide), Florida (statewide), Greater Buffalo region (New York), Greater Kansas City region (Kansas and Missouri), Greater Philadelphia region (Pennsylvania), Hawaii (statewide), Louisiana (statewide), Maine (statewide), Massachusetts (statewide), Michigan (statewide), Montana (statewide), Nebraska (statewide), New Hampshire (statewide), New Jersey (statewide), North Dakota (statewide), North Hudson-Capital region (New York), Ohio and Northern Kentucky region (statewide in Ohio and partial state in Kentucky), Oklahoma (statewide), Oregon (statewide), Rhode Island (statewide), Tennessee (statewide), and Virginia (statewide).

[4] CMS webpage, “Primary Care First Model Options.”

[5] Jim Thompson, MD and Amy Loriaux, Intelligent Medical Objects Webinar titled “What to know about reimbursement under the Primary Care First Act,” at 2:00 pm EST on October 28, 2020.

[6] Id.

[7] As described by CMS in its June 30, 2020 announcement, “CMS Innovation Center Models COVID-19 Related Adjustments,” the implementation date for the SIP Track was delayed to April 1, 2021 as part of CMS’ efforts to accommodate the exigencies of the current public health emergency.

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Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 316
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Kenneth Yood Healthcare Attorney SheppardMullin
Partner

Ken is a partner in the Corporate practice group in the firm's Los Angeles office. Chambers USAranks him highly for Healthcare, where he was commended for his "broad-based ability in the regulatory area." Clients appreciate that "his explanations are clear, and he understands the business side of things," notes Chambers 2016.

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Ken represents a wide range of healthcare providers and healthcare companies, including specialty and general acute hospitals (including local district, nonprofit and...

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Melissa Gertler, Sheppard Mullin Law Firm, Corporate Law Attorney, Century City
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Melissa Gertler is an associate in the Corporate Practice Group in the firm's Century City office.

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Hector M. Grajeda is an associate in the Corporate Practice Group in the firm's Century City office and is a member of the firm’s healthcare practice team. 

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Hector advises clients on a variety of general corporate matters, including mergers and acquisitions, private placements, securities offerings and securities law compliance, entity formation, corporate governance and general contract negotiations.

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