The Move to Value-Based Payment Continues: CMS Announces Initiative to Transform Primary Care Delivery and Payment

Part of CMS’ attempt to shift Medicare from its traditional fee-for-service model to a value-based care model, CPC+ is CMS’ largest attempt so far to transform the way primary care is provided and reimbursed. CPC+ will be implemented in up to 20 regions nationwide, accommodate up to 5,000 primary care practices, involve more than 20,000 physicians and other clinicians, and cover approximately 25 million patients.

What is CPC+?

Built on the foundation of the Comprehensive Primary Care Initiative, CPC+ is a regionally-based, multi-payer care delivery and alternative payment model (APM) designed to reward value and quality through an innovative payment structure. Physicians who take part in the initiative will support patients with serious or chronic diseases, provide 24-hour access to care, deliver preventive care, engage patients and their families, and work with hospitals and other clinicians to improve coordinated care delivery. In return, participating primary care practices will receive a monthly “care management fee” for each beneficiary, making it easier for the practices to provide appropriate care to their patients without the concern of a potential decrease in fee-for-service payments. Practices also will receive a prepaid incentive payment, to be retained or repaid by the practices based on quality and utilization metrics.

Two Payment Tracks

Participating practices will choose between two payment tracks that each feature different care delivery requirements and payment options. Practices selecting Track 1 will receive an average care management fee of $15.00 per beneficiary per month and a prepaid incentive payment of $2.50 per beneficiary per month. Track 1 physicians will continue to receive reimbursement based on the specific services provided to each patient on a fee-for-service basis. Physicians in Track 2 will receive an average fee of $28.00 per beneficiary per month and an incentive fee of $4.00 per beneficiary per month; however, the fee-for-service reimbursement will be set lower than in Track 1. CMS’ comparison of physician reimbursement under the two models is found here.

Notably, practices participating in Track 2 also must demonstrate their health IT vendors’ commitment to practice support through the provision of advanced health IT capabilities. Practices will be required to submit to CMS letters of support from the vendors. CMS will then enter directly into Memoranda of Understanding with those vendors outlining the vendors’ commitment to enhancing the practices’ health IT capabilities.

CMS’ Next Steps

CPC+ is a voluntary program, but as noted above, CMS expects to partner with commercial and State payers in up to 20 regions throughout the country and involve 20,000 clinicians. As the initial step in this process, beginning on April 15, 2016, CMS will solicit proposals from other insurers to partner in CPC+. CMS will enter into Memoranda of Understanding with selected payer partners that document a commitment to alignment on payment, data sharing, and quality metrics. CMS also will determine CPC+ regions based on the chosen payer partners, with the selected regions announced in July 2016. Applications will then be solicited from practices within the geographic regions from July 15 through September 1, 2016.

This initiative is the latest in a long series of health care delivery system reform proposals announced by CMS over the last year, as it works towards meeting HHS’s announced goal of tying 50 percent of Medicare payments to APMs by 2018. Arent Fox’s Health Care team has assisted clients with devising new ways to deliver care and take advantage of the increasing proliferation of APMs, and our team continues to monitor developments related health care delivery system changes.