In April, the U.S. Department of Health and Human Services announced a new set of voluntary value-based payment models for primary care physicians under the label “Primary Cares.” Adam Boehler, director of the CMS Innovation Center, called it “a clear sign that we are changing the status quo. These are sweeping models that will shift one-quarter of this country to outcomes-based payment. It is time to dismantle the old, broken fee-for-service system that we have today and replace with one that pays for outcomes and quality.”
The newly announced effort has two prongs: The Primary Care First initiative creates an opportunity for providers to leave behind fee for service and be paid for keeping their patients healthy and at home. The second is Direct Contracting, which allows sophisticated organizations to take full accountability for their patients at a local level. Neither path is mandatory and they both emphasize a focus on complex, high-needs patients, Boehler said at the time.
Shortly after the announcement, several provider groups gave public responses—most of which were enthusiastic. America’s Physician Groups (APG), for instance, an association that represents more than 300 medical groups already involved in value-based contracting, called the approach a win for patients and the physician groups who care for them. “We’re very pleased to see that many of our recommendations for improving value-based care were adopted throughout these new models,” said Don Crane, APG’s president and CEO in a prepared statement.
In a recent interview with Healthcare Innovation, Tim Gronniger, former deputy chief of staff and director of delivery system reform at CMS, and current president at Caravan Health—a company that helps community health systems build accountable care and population health programs—discussed the new initiatives in more detail, how these models might overlap with existing value-based payment programs, challenges providers might face off the bat, and more. Below are excerpts of that conversation.
What were your initial thoughts on the new “Primary Cares” models?
We have learned a lot from that announcement and then from subsequent CMS announcements. It became clear that CMS is going to continue pushing risk onto the delivery system for providers. This was a big announcement in terms of the number of models and the complexity of the models; they have four models announced and then one that they asked feedback on. That’s a heavy lift, so kudos to them for getting it done. They tried to paint a picture of continuity with both the Comprehensive Primary Care Plus (CPC+) and then the Next Generation ACO program. You can definitely see the continuity with the CPC+ program, as it targeted very similar types of practices, and works on similar outcomes metrics— namely avoiding inpatient hospital utilization.
But the Direct Contracting model options are different from the Next Gen ACO model. They have more risk and are arranged differently. Direct Contracting relies on changing cash flows more dramatically than the Next Gen model does, by virtue of requiring the use of a partial capitation or full capitation model, and then relatedly requiring providers to take on claims payment responsibilities.
The other big theme I was surprised to see put into policy so forcefully was they made a lot of space for new entrants into these programs to say to healthcare providers, “Look, we are not happy with the slow pace of change here, so we want to bring in technology companies, managed care companies, and others to do this work, rather than relying on health systems and physicians practices to do it.” And they included policy provisions to make that at least theoretically possible, even though I think it’s still hard to see that in practice.
How do you expect these models to overlap with other value-based payment programs out there currently?
The narrow answer to that is it will be relatively similar to the way existing programs work, which means they will be allowed to be in the Primary Care First model and in an ACO model, but you won’t be able to be an ACO and a Direct Contracting model at the same time.
More broadly, I think there’s an issue of model proliferation confusion. There are too many models in the field rather than too few, so curating the garden a bit will be useful. But they are at a point now where they cannot do that due to the way they have set this up. The Direct Contracting models are relatively far off in the future, while Primary Care First options are live for organizations right now, so we advise health systems to focus their efforts on not doing every model that CMS comes out with. With the uncertainty attached to these models and the high levels of risk, we think generally that MSSP [Medicare Shared Savings Program] ACOs are where most organizations will want to be, if they are considering this type of work.
These models are voluntary right now. Are mandatory models coming next in some form?
They have talked about mandatory models more recently, around the same time they have put these [newer] models out. And that’s interesting. If you are going to do a mandatory model then usually you will talk about it at the time you put that model out. So, I am hard-pressed to see these particular models becoming mandatory in the next year or so. I read their [comments] about mandatory models to be signaling about drug pricing more than about anything else in this space. But it’s hard to truly know until we get more details.
More broadly, how challenging is it for traditional healthcare providers, who might have a lot of their revenue still tied to fee-for-service, to engage in these types of programs?
That is the tradeoff that everyone has to evaluate; what are the signals and incentives that they are getting from the government? From our perspective, once the Pathways to Success rule came out this past winter, a lot of uncertainty around that policy direction lifted, and we got much more activity and clients looking to join ACOs or to discuss what they needed to do to succeed in value-based models. I do think there is a need for CMS to continue to make sure that the underlying fee schedule provides the appropriate direction as well. For instance, you can think of extending incentives for participation in alternative payment models [APMs] to hospitals’ fee schedules. That’s one opportunity for Congress and CMS.
Taking CMS at its word about what it wants to do in terms of pushing providers into risk-bearing models, the law doesn’t say they have to do that. The law gives some incentive to join risk-bearing models, but there is a lot of confusion around whether the incentives are strong enough relative to just staying in MIPS [the Merit-based Incentive Payment System]. We believe there is a compelling business case for being an APM, especially for ACOs, but the confusion around what CMS is doing with MIPS is undercutting their push to get as many providers into risk as possible.
What are other challenges providers should be aware of when they consider entering into these models?
A lot of providers are not big enough to do this on their own. Unless you are such a large system or are working with a collaborative group of providers, it’s really hard to do this and be assured of success. Getting scale is something everyone needs to consider. There is also a need to identify a core set of metrics that you are working against, how you will track improvement on primary care processes, how you will make sure you are delivering care that is going to keep patients healthier, and then putting in place the technologies and workflows to track all of it. That involves changes to your staffing models, to your physician compensation agreements, and it’s meant to change your operations—otherwise you aren’t making a big enough difference.
