HHS Announces New Primary Care Pay Models

On April 22, U.S. Department of Health and Human Services (HHS) officials announced the introduction of five optional value-based care models for large and small primary care physician practices. The new payment models will incorporate incentives for keeping Medicare patients healthy, as alternatives to traditional fee-for-service payment structures.

Alex Azar, HHS Secretary, and Seema Verma, Administrator of the Centers for Medicare & Medicaid Services (CMS), discussed the new models at the American Medical Association. The models, which will include five payment track options, are expected to attract at least one-quarter of all Medicare beneficiaries, beginning in 2020.

The first two payment models, known as “Primary Care First,” were designed for smaller primary care practices. They will provide fixed monthly per-patient payments and allow practices to receive bonuses based upon their ability to keep their patients healthy and out of the hospital. These models are based on CMS’s existing Comprehensive Primary Care Plus payment model, which was launched in January 2017 but has had little impact to date.

The three payment models for larger practices and health systems, known as “Direct Contracting,” will allow providers to participate in the financial savings achieved or excess costs incurred in providing care for their patients. Providers will have the opportunity to assume 50% of the risk under the “professional option” or take on full risk under the “global option.” Under a “geographic option,” which is still under development, health systems or insurance plans may elect to assume the risk for the total cost of primary care in a particular geographic area.

CMS’s Innovation Center expects to begin soliciting applications for the new models in the next few weeks.