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Engage Consumers April 14, 2016

4 Takeaways: CMS Pushes Primary Care Practices to Transform & Partner

Partner and CMO, Health and Life Sciences, Oliver Wyman
Partner, Health and Life Sciences, Oliver Wyman
Principal, Oliver Wyman Actuarial Consulting
Key Takeaway
New @CMSgov #PrimaryCare model creates more entry points for productive provider-payer collaboration

The Centers for Medicare & Medicaid Services (CMS) announced Monday its largest-ever program to transform and improve how primary care is delivered and paid for in America. The effort, the Comprehensive Primary Care Plus (CPC+) model, will be implemented in up to 20 regions and can accommodate up to 5,000 practices, which would encompass more than 20,000 doctors and clinicians and the 25 million people they serve.

The initiative is designed to provide doctors the freedom to care for their patients the way they think will deliver the best outcomes and to pay them for achieving results and improving care. Primary care practices will participate in one of two tracks. Both tracks will require practices to improve preventive care and patient engagement, but practices in Track 2 will also provide more comprehensive services for patients with complex medical and behavioral health needs. Details here.

Oliver Wyman’s Chief Medical Officer Dr. Bruce Hamory teamed with payer experts Tomas Mikuckis and Josh Sober to provide these top-of-mind takeaways in response to the ambitious initiative:

1)      Both practice transformation and capabilities development get a boost

  • One of the big challenges that commercial payers often face is that the business economics of funding transformation are stacked against them: If you have 25% commercial share, you can’t afford to fully fund on physician practice transformation that also benefits Medicare and Medicaid beneficiaries and competitor members. The multi-stakeholder feature of this approach creates a pathway for supporting these key capabilities critical across patient populations.
  • Practices will require assistance to develop the needed capabilities for success. The American Academy of Family Physicians, for example, has tried to help practices receive Patient-Centered Medical Home (PCMH) accreditation and found that they required outside help in redesign to be functional.
  • Regulators may determine that participation in this program qualifies providers for the Alternative Payment Model (APM) track under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). For those providers that see the APM track as being favorable to the Merit-Based Incentive Payment System (MIPS) track, the CPC+ model will no doubt be evaluated very seriously.
The multi-stakeholder feature of this approach creates a pathway for supporting key capabilities critical across patient populations.

2)      Data is king, but may create risks of growing administrative burden

  • Appropriate coding of all diagnoses in the primary care practice will be essential. The payments for patient management in Track 2 will depend on patient complexity, driven by documented co-morbid conditions.  
  • Incentive payments will be evaluated at the practice level, unlike under the foundational Comprehensive Primary Care, which is at the regional level. This should help encourage true practice-level transformation in key care processes.
  • New requirements may raise the administrative burden that practices face in their coding and documentation activities, especially if the reporting proceses, systems, or metrics differ significantly from the growing focus on quality for the Stars measures for Medicare Advantage plans and QRS ratings for ACA exchange plans.
  • Combined data sharing with CMS offers potential opportunity for better metrics on physician performance by increasing sample sizes.  
Appropriate coding of all diagnoses in the primary care practice will be essential.

3)      New payer-provider partnerships will be sparked

  • New regions will be evaluated based on level of private payer participation. This focus will likely highlight regions where the providers are further along the path to risk, like California, or where there’s a payer-provider combination that is really strong in the market. This positive selection may not give CMS a representative preview of how the program would look if it were evaluated across a larger cross section of the country.
  • From a commercial payer perspective, this may be an area where CMS will reinforce what a lot of the better PCMH programs have already put in place. For example, Blue Cross Blue Shield of Michigan embarked on a multi-year investment to develop what is now among the nation’s largest PCMH programs. (Read ACO Buzz: Role Models for a Successful Shift to Value.)
  • This program may provide an additional opportunity for payers to encourage practice transformation in markets that have been slower to evolve, and create an additional entry point for productive collaboration.
  • On the flip side, regulatory hurdles and the possibility of a tepid reception from payers threaten to undermine such potential.
The program creates additional entry points for productive collaboration.

4)      Value-based reimbursement will continue to be accelerated, but who will be the takers for more risk under Track 2?

  • This initiative continues to underscore the commitment to transforming the healthcare reimbursement system. In March 2016, the Administration estimated that it met the goal – eleven months ahead of schedule – of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016. The Administration’s next goal is tying 50 percent of Medicare payments to alternative payment models by 2018.
  • What is the potential risk for providers given that CMS intends to recoup incentive payments to providers that fail to meet performance measures? ($4.00 per member/per month doesn’t seem like a lot, but if you’re cash-strapped with a large attributed population, it might be.)
  • Providers will see a reduction of as much as 65% to their fee-for-service payments by 2021 under Track 2.
  • Track 2 practices are expected to meet the challenge of heightening "their focus on caring for patients with complex medical, behavioral, and psychosocial needs."

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