In April, the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) announced a new set of payment models meant to encourage primary care providers to deliver better care at a lower cost to their patients by removing unneccessary administration and adjust payouts from procedures to outcomes.
HHS Secretary Alex Azar said, “these models can serve as an inflection point for value-based transformation of our healthcare system, and American patients and providers will be the first ones to benefit.”
This update includes five new payment models:
Primary Care First (PCF)
Primary Care First – High Need Populations
Direct Contracting – Global
Direct Contracting – Professional
Direct Contracting – Geographic
The Primary Care First (PCF) payment model options include:
Simplified monthly payments which will allow providers to focus on patient care
Higher payments for providers serving high need patients, and
Rewarding outcomes which is meant to reduce overall cost of care.
This will be tested for five years and will begin in January 2020.
The Direct Contracting (DC) payment model options, like PCF, are also focused on transforming primary care with a focus on outcomes over procedures but the focus is not on primary care providers but on engaging a variety of organizations like:
Accountable Care Organizations (ACOs)
Medicare Advantage (MA) plans
Medicaid managed care organizations (MCOs)
Organizations providing better and efficient care will be rewarded with a generous monthly payment that covers a portion or the total of anticipated costs. Global DC payment model organizations will be responsible for the financial risk while Professional DC payment model organizations will share the risk with CMS. The Geographic DC payment model will support organizations serving a defined target region which will empower local providers to best serve their community.
Together, these five payment models are meant to:
Provide better alighment of Medicare FFS beneficiaries
Give new participation opportunities and payment options for clinicians, and
Improve care coordination opportunities.