By C. Frederick Geilfuss II, Donald H. Romano, Gary D. Koch, Diane Ung and Lawrence W. Vernaglia
The Centers for Medicare and Medicaid Services
(CMS) has announced plans to develop a Comprehensive Primary Care (CPC)
initiative. In a notice published in the Federal Register on October 3,
2011, CMS announced a solicitation seeking participation of health care
payers as its first step, with plans to develop a multi-payer
model that focuses on making adjustments in the delivery of and payment
for primary care services.
The CPC initiative is another program from CMS and its Center for
Medicare and Medicaid Innovation (CMMI) designed to meet the Triple Aim
of better health in the overall population, better health care delivery,
and reduction in per capita cost of care. The CPC initiative joins
other CMS initiatives, including the Medicare Care Shared Savings
Program, the Pioneer ACO Program, the Bundled Payments initiative, and
various demonstration programs - all of which have been designed to
achieve the Triple Aim through modifications in how health care is
delivered and reimbursed.
The goal of the CPC initiative is to test a comprehensive primary
care service and payment model with a focus on the inclusion of the
following core factors as part of the delivery of primary care services:
Payer Focus With Multiple Payer Participation. Recognizing the
importance of having a consistent reimbursement method irrespective of
the payer of the service, the CPC initiative first seeks involvement of
multiple payers (beyond the Medicare program) in a given market. The
goal of the initiative is to have a majority of the payers in five to
seven different geographic markets participate. The initial solicitation
is directed to public and private payers, which, in addition to the
Medicare program, may include Medicare Advantage Plans, state Medicaid
plans, state employee plans, commercial insurers, and third-party
administrators of self-insured businesses or groups (including TPAs of
business coalitions). Any such payers may apply, and if they are
interested, they are requested to respond individually to CMMI first by
letter of intent, which is to be followed by an application for
participation. Based on the applications received, CMMI will select the
payers in five to seven markets. Once the payers and markets are
selected, primary care practices will be recruited for the CPC
initiative in each of the selected markets. CMS' expressed goal is to
have 75 primary care practices participate in each of five to seven
selected markets, and that up to 330,750 Medicare and Medicaid
beneficiaries will be involved over the course of the four-year
Selected payers must be willing to collaborate with the Medicare
program to try a new payment program that includes enhanced financial
support that goes beyond fee-for-service payments for participating
primary care practices. Payers who apply must describe the proposed
payment support that they propose, which must be designed to meet the
objectives of the CPC initiative. Selected markets will be those
comprising areas in which a preponderance of the payers have applied and
have offered strategies that align with those planned by CMS for the
Extension of Medical Home Model. The CPC initiative is
intended as an extension of the patient-centered medical home concept by
including payment reform as part of the concept. CMS notes in its
solicitation document that medical home models have tended to focus on
care processes with only limited attention to the payment environment.
The CPC initiative adds payment models. With multiple payers in a
particular market participating, the CPC initiative is intended to offer
enhanced financial support for primary care providers from each of many
different payers as part of the medical home, primary care environment.
Payment Approach: Medicare and Others. CMMI has indicated
that, on behalf of Medicare beneficiaries, it will pay an average of $20
per beneficiary per month (PBPM) for Medicare fee-for-service patients.
Such payment is independent of the fee-for-service or per-visit
payments. Such amount is designed to provide primary care practices with
the financial support needed to supply effective care management,
improved access, and planned care and coordination. The $20 PBPM will be
reduced to $15 PBPM in the third and fourth years of the program. There
also will be risk adjusted payments of $8 to $40 PBPM paid to primary
care practices. In years two to four of the program, CMMI also will
include a shared-savings bonus, the amount of which will be calculated
at the market level, not the individual practice level. The
shared savings will be distributed to the practices based on quality and
utilization metrics, practice size, and practice-level risk.
Participating payers other than Medicare are expected to make
contributions to primary care practices supporting the infrastructure to
accomplish the primary care core functions. Other payers need not adopt
the PBPM payment approach Medicare proposes to use. The notice suggests
that payers (other than Medicare) may provide support through a PBPM
care management fee or through direct support for services such as
embedded care managers, health educators, or pharmacists.
CMMI has offered to provide financial assistance to states who
apply to participate on behalf of their Medicaid programs, provided they
Other Criteria, Alignment of Beneficiaries, Data Sharing.
CMMI proposes that for Medicare it will use a prospective alignment
methodology to assign Medicare fee-for-service beneficiaries to a
primary care practice within a market. This is in contrast to the
retrospective attribution in the Medicare Shared Savings Program, the
attribution method of which has been criticized by many. Prospective
alignment is necessary to set and pay the PBPM fee to the practices.
Other payers may elect a different methodology.
Data sharing by the Medicare program and other payers also is a
critical aspect of the program. Participating payers are to propose
their data sharing methodology.
Payers who participate also are expected to align quality,
practice improvement, and patient experience measures with CMMI for
purposes of monitoring implementation milestones, quality improvement,
and patient experience.
Payer Letter of Intent and Application. Payers desiring to
participate must file a non-binding letter of intent by November 15,
2011. Those who express such an interest will be given access to an
application for the CPC initiative through an online portal.
Applications for participation must be submitted by January 17, 2012.
Primary Care Practice Eligibility. After selection of the
payers and identification of the markets, primary care practices will be
recruited to participate. Among the identified eligibility requirements
for primary care practices are:
The CPC initiative is another CMS program initiated by the CMMI
to improve health care and restrain costs. As described above, it takes a
different approach than other CMS proposed initiatives by focusing on
participation of many payers in a market. It is another initiative
certain providers will want to consider as they seek to deliver more
efficient and accountable care.
Legal News Alert is part of our ongoing commitment to providing
up-to-the-minute information about pressing concerns or industry issues
affecting our clients and our colleagues. If you have any questions
about this update or would like to discuss this topic further, please
contact your Foley attorney or the following:
C. Frederick Geilfuss II
Donald H. Romano
Gary D. Koch
Los Angeles, California
Lawrence W. Vernaglia
© 2011 Foley & Lardner LLP
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