A new direct provider contracting model under consideration at the CMS could potentially save providers billions in administrative costs, but could also threaten access to care for Medicare's frailest and lowest-income beneficiaries.
Under the proposal, the CMS would directly contract with provider practices and pay a fixed per-beneficiary per-month payment to cover various services, such as office visits, certain office-based procedures, and time spent managing care for a patient. Practices could be eligible for incentive payments if they hit savings and quality goals.
"Such a model would have the potential to enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures," the CMS said in a request for information seeking input from the industry.
Iora Health, a Boston-based medical practice, found that similar direct-contracting models lowered hospital admissions, and emergency department and specialist visits by 30% to 40%.
Unlike other primary-care models such as Comprehensive Primary Care Plus, which also pays a per-beneficiary per-month fee, Medicare enrollees could choose the direct-contracting model or use another primary -care provider.
The CMS is eying the model in response to comments late last year on what new priorities the Center for Medicare and Medicaid Innovation should pursue.
The agency received 1,000 comments, which were all posted April 23.
Ascension, the nation's largest not-for-profit health system, supported private contracting in its comments. Officials for the Catholic system said this approach would make funds available to beneficiaries upfront and allow them to directly contract for primary care and related services.
The upfront funding could also be used to pay for services that are not presently covered under Medicare.
"This aspect of such a model would allow both a beneficiary and provider, in partnership, to define what has value and create competition for such services," the Rev. Dennis Holtschneider, chief operations officer at Ascension, said in a comment letter.
In exchange for providing Medicare funds upfront, providers may face some risk as the CMS is considering holding participating practices accountable for all or a portion of a beneficiary's total care costs.
The CMS is collecting comments through May 25 on how much risk a practice should face and whether to limit how often beneficiaries can change primary-care providers.
Doctors participating in the proposed model would face less scrutiny from Medicare billing contractors.
Since they are getting prepaid for services, they wouldn't be required to submit claims, according to Michael Miscoe, president of AAPC's National Advisory Board. AAPC is a trade association for medical billing professionals.