Even as some important questions remain unanswered, the CMS
Primary Cares Initiative is generating a lot of excitement. Observers say it
opens the door to more competitors for healthcare incumbents.
KEY TAKEAWAYS
Keep an eye on how health plans, technology companies, and others
interested in taking on risk could respond to the new direct-contracting
options.
Look for ways to incorporate these new primary care models into
your full spectrum of contracts, including Medicare fee-for-service and others.
The shift to value-based care has sputtered a bit in the past two
years, as hospitals and health systems have waited to see what innovative
reforms the Trump administration would push across the healthcare policymaking
finish line.
Despite a litany of attempts—and two years of a
Republican-controlled Congress—the administration has neither repealed nor
replaced the Affordable Care Act and the value-based payment provisions
embedded within it. Even with its individual mandate neutralized and its constitutionality
under judicial review, the ACA remains law, and officials in the Centers for
Medicare & Medicaid Services are using the ACA's authority to roll out a
potentially transformative undertaking: the CMS Primary
Cares Initiative.
That initiative, industry stakeholders say, is poised to kickstart
value-based care in Medicare and beyond, ushering in a new wave of
consumer-centric competition that could help to shake off some healthcare
providers' risk aversion.
"There was a sense that things were flattening out. It wasn't
going backwards. It wasn't going down. It just was not progressing as fast as
we all had hoped," says Norman H.
Chenven, MD, founding CEO of Austin Regional Clinic in Texas
and vice chairman of the Council of
Accountable Physician Practices.
"With this announcement for Medicare—again, with the caveat
that the devil is in the details—there is a sense that this is going to be a
shot in the arm and we're going to see some real new energy, innovation, and
evolution of the value-based movement," Chenven tells HealthLeaders.
The initiative, which CMS announced last month, has a total of
five voluntary payment model options split between two paths. There are two
options under the Primary Care
First(PCF) path and three options under the Direct
Contracting(DC) path. The idea behind all five options is to
demonstrate how risk and reward can lead to investment in primary care that
ultimately reduces overall healthcare spending and boosts quality outcomes.
While there are still key details we don't know about how the new
models will operate, they appear to present opportunities for healthcare
providers that are strategically positioned to make big moves in value-based
primary care.
But there also seem to be significant threats, including potential
competition from some unlikely sources.
BEWARE NEW ENTRANTS
These new primary care models are being built on foundational
lessons learned through past pilots by the CMS Innovation Center, the agency
says.
The PCF models build upon Comprehensive
Primary Care Plus (CPC+), and the DC models build upon various
Accountable Care Organization (ACO) models, including the Medicare Shared
Savings Program and Next Generation
ACO Model, plus benefit design principles of Medicare
Advantage.
An organization doesn't need to be a large physician group or
hospital to form an ACO or similar entity to participate. The new PCF models
are open to primary care providers with as few as 125 attributed Medicare
beneficiaries at a particular location. That helps to empower individual
physician groups that might otherwise feel the need to align themselves with
health systems, says Dennis K.
Butts, Jr., MBA, a managing director in Navigant's value
transformation practice.
And the new DC models include language that makes clear
healthcare's transformation will not be constrained to the current provider
landscape, Butts says. That means incumbent providers could find themselves up
against some new competitors.
Participants in the third of the three DC models may include
health plans, technology companies, and others interested in taking on risk for
Medicare fee-for-service beneficiaries in a specific geographic area, CMS said
in a fact sheet.
(The agency is collecting
comments on that idea through May 23.)
"The market is ripe for transformation and disruption, and
this new model lowers the bar of entry and is actually encouraging those new
market entrants to play a very active role in this space," Butts
tells HealthLeaders.
These newer entrants have already been making moves in primary
care. It's not just CVS Health and Walgreens that are expanding
services in their retail clinics. It's major insurers, like Blue
Cross Blue Shield of Texas, opening clinics of
their own. That's in addition to whatever the Amazon-backed
healthcare venture Haven ultimately
decides to do. (For what it's worth, CEO Atul Gawande, MD, called the CMS
Primary Cares Initiative "a big deal.")
"All of those new players in these models for
direct-contracting now can actually get in the game as a primary participant
and no longer have to sit on the sidelines," Butts says.
"I think we'll probably look back at this moment a few years
from now as when the move to value really began to kick up in the healthcare
marketplace," he adds.
Remember, though, that we are still waiting on CMS to fill in some
key details about this initiative.
"What has been revealed so far is fairly general. It's
directional, but it is certainly not absolutely clear how all of this will
work," Chenven says. "The business model is, again, directional but
not definitive."
WHAT WE DON'T KNOW
Past experience with Medicare Advantage may serve as some guide
for how CMS will proceed with its primary care initiative, but the details are
not final until they are in writing. That's why the request for applications
(RFA) that CMS is expected to release within the next few months is so important,
says Chris Dawe, senior
vice president of Medicare partnerships for Evolent Health.
Dawe, who has served as a White House healthcare policy advisor
and the director of delivery system reform at Health and Human Services, says
he will be looking for several specific bits of information, including how
benchmarks will be established and calculated, how risk adjustment will work,
and what waivers CMS will allow for participating organizations. The fine print
on each of those items could dramatically change an organization's risk/reward
assessment.
Dawe advises organizations to keep their options open because CMS
has generally been accommodating in the past to those that apply for multiple
options and then pick one later.
Don't forget, furthermore, that the CMS Innovation Center's
statutory authority is rooted in the ACA, which the Trump administration has
urged the Fifth Circuit to invalidate in
its entirety. If the entire ACA were to be invalidated or repealed
without a replacement, then the CMS Primary Cares Initiative ostensibly would
fall with it.
When asked about the possibility that an invalidated ACA
could undermine the
Trump administration's own healthcare policymaking agenda, an HHS
spokesperson said advancing the healthcare system's value-based transformation
ranks among Secretary Alex Azar's top priorities, so he will not be deterred.
"This administration will continue to champion that priority
in the context of any health reform effort," the HHS spokesperson
told HealthLeaders in an email.
While fee-for-service payments will likely remain as a major
source of revenue for years to come, industry watchers and policymakers agree
that value-based contracting is ascendant once again, regardless of how the
details of the CMS Primary Cares Initiative shake out.
"If you want to be able to capture all or mostly all of the
value that you're actually creating in the market, you're going to have to take
on downside risk," Dawe says. "To me, it's just a necessary part of
the end-game here."
—Steven
Porter is an associate content manager and online news editor for
HealthLeaders, a Simplify Compliance brand.
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