A second option, the Direct Contracting model is “more ambitious and aimed at larger practices,” Mr. Azar said – those that serve at least 5,000 Medicare beneficiaries.
“Just like in Primary Care First, when patients have a better experience and stay healthier, these practices will make more money,” he continued. “But if patients end up sicker, Direct Contracting Practices will bear the risk for the extra health spending, not just at their own practice, but throughout the system.”
Options under the Direct Contracting model are designed for organizations ready to take on full financial risk that have experience managing large populations with accountable care organizations or working with Medicare Advantage plans, Ms. Verma explained.
The Direct Contracting model will start with two options. The Professional population-based payment (PBP) model offers a lower risk-sharing arrangement (50% savings/losses), while the Global PBP offers a 100% savings/losses risk-sharing arrangement.
CMS also is requesting information on a third payment model, the Geographic PBP model, which would have a similar risk-sharing arrangement as the Global PBP, but participants would assume responsibility for the total cost of care for all Medicare fee-for-service beneficiaries in a defined region.
This model also will launch in 2020.
The new Medicare primary care options were commended by quarters not always supportive of the current government.
Andy Slavitt, CMS administrator under President Obama, voiced his support for the new models.
“There are several watershed moments in the history of the Medicare program, like the coverage of prescription drugs and the shift to paying for better care,” he tweeted April 22. This announcement is “another one as it eases the connection of Medicare beneficiaries to a primary care physician and gives doctors the freedom, rewards, and tools to keep people healthy.”
He continued: “With this great starting point, even as CMS listens to input, physicians and patient groups should be considering who this helps move ... to a healthier country with a more sustainable system.”
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The American Medical Association also voiced its support.
“Providing adequate financial support for high-quality primary care must be an essential element of any strategy to improve the quality and affordability of our country’s health care system, Gerald E. Harmon, MD, immediate past chair of the AMA Board of Trustees, said in a statement. “Many primary care physicians have been struggling to deliver the care their patients need and to financially sustain their practices under current Medicare payments. The new primary care payment models announced today will provide practices with more resources and more flexibility to deliver the highest-quality care to their patients.”
The American College of Physicians also noted their support of the new models.
“ACP is optimistic that the new models will emphasize the important role primary care plays in value-based care delivery, that models are voluntary and have a range of risk options, and that practices should use population health management data to reap potential benefits,” Robert McLean, MD, ACP president, said in a statement.
The success and viability of these models will depend on the extent that they are supported by payers in addition to Medicare and Medicaid, are adequately adjusted for differences in the risk and health status of patients seen by each practice, are provided predictable and adequate payments to support and sustain practices (especially smaller independent ones), are appropriately scaled for the financial risk expected of a practice, are provided meaningful and timely data to support improvement, and are truly able to reduce administrative tasks and costs, among other things.”