Providers and analysts are calling new value-based physician payment models announced last week by the CMS game-changers, potentially signaling a new era in which many providers are taking on downside risk and responsibility for total cost of care.
The five new voluntary payment models, which are available under the Primary Care First heading through the CMS Center for Medicare and Medicaid Innovation, vary in levels of risk, but all involve providers receiving fixed payments based on their population of Medicare beneficiaries. They’re also designed to encourage improvement on quality metrics and lower costs through bonuses and penalties.
Two of the models are essentially riskier versions of existing primary-care experiments, while the remaining three are Direct Contracting models that are new to Medicare, with two requiring providers to take on full risk.
Providers and analysts alike are touting the models as a significant moment in the movement to value-based payment, which has been talked about for years with little actual adoption.
“The shift won’t happen by tomorrow, but over the next two to four years you are going to see a drastically different marketplace, and I think looking back at what actually caused it to change, we are going to look back at this moment—I think it’s potentially that significant. We will have to see how providers respond and take advantage of the opportunity,” said Dennis Butts, managing director at consultancy Navigant.
Although the models are voluntary, the agency expects more than 25% of all Medicare fee-for-service beneficiaries will be involved, or nearly 11 million people.
Providers expressed support for the models, praising the flexibility the experimental approaches allow for physicians to address the needs of their patient population.
They also said the models’ fixed payments reduce administrative burden by eliminating much of the work involved with revenue cycle contracts, and also maintain or reduce quality-reporting demands.
“We know that physicians spend an awful lot of time on administrative work and some of that administrative work is related to revenue cycle—getting rid of the revenue cycle is going to free up physician time with patients,” said Dr. James Madara, CEO of the American Medical Association.
The CMS also plans to encourage other payers, including Medicare Advantage plans and purely commercial insurers, to align their contract designs with the primary-care models, which will likely help ease reporting requirements.