HHS on Monday launched an ambitious, double-pronged strategy to shift primary care from fee-for-service payments to a global fee model where clinicians and hospitals could assume varying amounts of risk.
CMS to launch new direct-contracting pay models in 2020
HHS Secretary Alex Azar told a crowd of stakeholders at the American Medical Association in Washington that the CMS projects the new voluntary programs will shift at least a quarter of people in traditional Medicare out of fee-for-service.
The first model aims at small primary-care practices, offering two options with a flat monthly fee per patient. Bonuses or penalties will depend on their ability to keep their patients "healthy and at home," said Adam Boehler, director of the CMS' Center for Medicare and Medicaid Innovation, or CMMI.
Larger practices and health systems would have additional choices, which could be very lucrative but pose steeper risks. Under the first "professional option," providers would assume 50% of the risk, including savings and losses. Under the "global option," providers would take on full risk.
There is also a "geographic option," in which health systems or insurance plans could assume the risk for the total cost of primary care for a swath of communities within a particular region.
Most of the newly announced Innovation Center models will launch in January 2020. The geographic option is projected to begin in mid-2020.
The administration officials painted the models as a sweeping overhaul of the fee-for-service model, even though the model is voluntary. Verma said the CMS hopes to incorporate state Medicaid programs as the policy rolls out across the country.
The Trump administration officials were optimistic the model could work even as Medicare fee-for-service patients keep their ability to pick their doctors.
"Basically what the model will do is have providers competing for beneficiaries," Azar said. He argued that direct contracting will motivate physicians and other clinicians to keep their patients happy enough to remain under their care.
Boehler said that the "significant" quality measures within Medicare will deter physicians or hospitals from preventing necessary hospitalizations. He said the agency is aware of potential adverse consequences and will monitor the participating providers accordingly.
The CMS also held meetings with providers and associations who attended the announcement. Dr. Rhonda Medows, CEO of Ayin Health Solutions and president of population health at Providence St. Joseph Health system, emerged from the direct-contracting session excited about what she sees as an opening to expand Medicare Advantage business under the geographic model.
The system's plan currently operates in Oregon and Washington, and she sees the model as a way to move into other states and partner with additional health systems.
She also said the model could lead to partnerships with big tech companies.
"The devil is in the details, but I see a broad array of opportunities," Medows said. "There are details to be fleshed out but overall, I see more opportunity than challenge."
Dr. Robert McLean, president of the American College of Physicians, saw the models as a promise of more dollar investment in primary care.
He said his group "is delighted CMS and CMMI are looking at concerns about primary care being underpaid and undervalued."
While CMS officials didn't give any details about the cost of the new models, McLean said that they won't necessarily be more expensive than the current system.
"I don't think there's any reason to believe it will be more expensive," he said. "If you're paying more for primary care in the aggregate, you'll get higher-value care."
Drawing a comparison to accountable care organizations, he added that healthcare dollars become more consolidated.
"Are they going to make this a complete zero-sum game?" McLean said. "That's the trillion-dollar question. That remains to be seen."
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