Since enactment of the Patient Protection and Affordable Care Act, the Center for Medicare and Medicaid Innovation (the “CMS Innovation Center” or “CMMI”) has tested innovative payment and service delivery models that could potentially reduce Medicare, Medicaid, and Children’s Health Insurance Program expenditures and also improve the quality of care for these program beneficiaries.

On April 22, 2019, the CMS Innovation Center announced its newest voluntary opportunity: the launch of the Primary Care Initiative, set to begin in January 2020.

The Primary Care Initiative accommodates primary care practices at multiple stages of readiness to assume financial risk in exchange for performance-based payments with two main tracks: (1) Primary Care First (“PCF”) and (2) Direct Contracting (“DC”) via five payment model options:

  • Primary Care First
  • Primary Care First – High Need Populations
  • Direct Contracting – Global
  • Direct Contracting – Professional
  • Direct Contracting – Geographic

All five payment models focus on care for chronically and seriously ill patients.

Primary Care First

The Primary Care First tracks will test whether sharing financial risk and tying provider payments to quality performance will reduce total Medicare spending, improve care quality, and advance patient outcomes via two payment models: PCF and PCF-High Need Populations.

Participating PCF practices will receive a monthly payment to treat patient populations with complex conditions and who are seriously ill. Each PCF payment model allows participating providers the opportunity to earn quarterly performance-based financial bonuses (up to 50 percent) for reducing unnecessary hospitalizations and reducing total cost of care; and, the risk of bearing financial responsibility for extra spending of up to 10 percent of their practice’s revenue.  Under both models, to be eligible for a positive performance-based adjustment, the practice must meet standards that reflect quality care (e.g., experience of care survey, controlling high blood pressure, diabetes hemoglobin A1c poor control, colorectal cancer screening, and advance care planning).

PCF-High Need Population practices will receive a higher payment rate than PCF practices as PCF-High Need Population practices must demonstrate that they maintain a network of relationships with other care organizations in the community and offer care to high need patients (i.e., seriously ill patients).

Eligible PCF applicants include primary care practices that: 

  • include primary care practitioners (M.D., D.O., C.N.S., N.P., and P.A.), certified in internal medicine, general medicine, geriatric medicine, family medicine, and hospice and palliative medicine;
  • provide primary care health services to a minimum of 125 attributed Medicare beneficiaries at any one particular location;
  • are located in one of the selected PCF regions: Alaska (statewide), Arkansas (statewide), California (statewide), Colorado (statewide), Delaware (statewide), Florida (statewide), Greater Buffalo region (New York), Greater Kansas City region (Kansas and Missouri), Greater Philadelphia region (Pennsylvania), Hawaii (statewide), Louisiana (statewide), Maine (statewide), Massachusetts (statewide), Michigan (statewide), Montana (statewide), Nebraska (statewide), New Hampshire (statewide), New Jersey (statewide), North Dakota (statewide), North Hudson-Capital region (New York), Ohio and Northern Kentucky region (statewide in Ohio and partial state in Kentucky), Oklahoma (statewide), Oregon (statewide), Rhode Island (statewide), Tennessee (statewide), and Virginia (statewide);
  • have primary care services account for at least 70 percent of the practices’ collective billing based on revenue;
  • have experience with value-based payment arrangements or payments based on cost, quality, and/or utilization performance such as shared savings, performance-based incentive payments, and episode-based payments, and/or alternative to fee-for-service payments such as full or partial capitation;
  • use 2015 Edition Certified Electronic Health Record Technology (“CEHRT”), support data exchange with other providers and health systems via Application Programming Interface (“API”) and connect to their regional health information exchange (“HIE”);
  • can attest to a limited set of advanced primary care delivery capabilities, such as 24/7 access to a practitioner or nurse call line and empanelment of patients to a practitioner or care team; and
  • can meet the requirements of the PCF Participation Agreement.

Direct Contracting

Large provider organizations with advanced, risk-based contract experience such as sophisticated risk contracting Medicare Advantage provider groups, MSOs, and ACOs, should consider the DC track payment model for Medicare fee-for-service (“FFS”) beneficiaries. This model will offer primary care providers a risk-adjusted per beneficiary per month payment (which CMS refers to as a population-based payment (“PBP”)) that ranges from a portion of expected primary care costs to the total cost of care. Two model options have been announced, and a third one is proposed with a request for public comments: (i) Professional PBP; (ii) Global PBP; and the potential (iii) Geographic PBP.

The PBP will include the costs of enhanced benefits and additional services that participating providers can offer to increase beneficiary engagement and improve quality and outcomes. Under the Professional model, the PBP will prospectively cover the costs of enhanced primary care services, and providers will share risk with CMS (50 percent savings or losses). Participants in the Global option will receive a PBP for all services provided by the participant and contract partners, and in turn will bear full financial risk (i.e., 100% accountability for savings and losses). Finally, the even more ambitious Geographic option would create a total cost of care model, allowing providers to assume financial and clinical responsibility for all health needs of all Medicare FFS beneficiaries in a defined geographic area. 

Beneficiary enrollment in these programs and participation in enhanced benefits is voluntary, and beneficiaries retain all rights of traditional Medicare. This voluntary participation may present logistical challenges for providers, who will likely serve both participating and non-participating Medicare beneficiaries, and need to develop separate billing workflows in addition to attending to the differing treatment options and processes for each set of patients.

This opportunity builds on a variety of models that CMMI has created to incentivize enhancements to primary care, but is the first context in which primary care physicians will be permitted to assume risk with traditional Medicare patient’s risk without an ACO structure. One very significant advantage for providers who are large and sophisticated enough to participate in the Global and Geographic options will be the ability to bypass the traditional claims processing and denials and appeals processes, yielding considerable savings in administrative costs. CMS will also offer a reduced set of mandatory quality measures. In turn, providers will need a large enough beneficiary pool to spread risk adequately (the RFI for the Geographic model currently suggests that the geographic area will be required to include a minimum of 75,000 beneficiaries), and will need the administrative sophistication to implement MSO or ACO-like functions to manage that risk appropriately, particularly with regard to agreements with contracted providers under the Geographic option.

CMS has stated they will post a letter of intent (“LOI”) for interested providers in Spring 2019. Submission of an LOI will not be binding but will be required for eventual participation. Participation agreements will be created in late 2019, and an initial start-up year will begin in 2020, with actual payments under the new models beginning on January 1, 2021.

CMS has issued a Request for Information on the Geographic Population-Based Payment Model for Direct Contracting to seek public comments on the design parameters for this model. Responses to the RFI are due by May 23, 2019and can be submitted to

Primary Care Initiative Value Based Model Participation

CMS projects that 25 percent of primary care practitioners will elect to participate in either PCF or DC models.

CMS will host webinars on the following dates for interested PCF stakeholders:

Reprinted by permission of The Florida Bar Health Law Updates.

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