Health Law Daily New Payment Model Options Ready for 2020
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Tuesday, April 23, 2019

New Payment Model Options Ready for 2020

By Cathleen Calhoun, J.D.

Five new payment model options are announced for primary care and other providers, but which one is best, and how are they different?

A new initiative, CMS Primary Cares Initiative, will provide primary care practices and other providers with five new payment model options under two paths, Primary Care First and Direct Contracting, HHS Secretary Alex Azar and CMS Administrator Seema Verma announced. The goal of the new set of payment models, according to the release, is the transformation of primary care to deliver better value for patients throughout the healthcare system. "Our Primary Cares Initiative is designed to give clinicians different options that advance our goal to deliver better care at a lower cost while allowing clinicians to focus on what they do best: treating patients," Verma said.

The 5 new payment models. The five new payment model options are:

  1. Primary Care First (PCF)
  2. Primary Care First – High Need Populations
  3. Direct Contracting – Global
  4. Direct Contracting – Professional
  5. Direct Contracting – Geographic

Differences in models. The payment models are broken into two main paths:

  1. Primary Care First (PCF). PCF is a set of voluntary five-year payment model options with the goal of rewarding value and quality. PCF offers innovative payment model structures to support delivery of advanced primary care. Primary Care First Model Options will be available in 26 regions of the U.S. beginning in 2020.
  2. Direct Contracting (DC). DC is a set of voluntary payment model options for beneficiaries in Medicare fee-for-service (FFS). The goal of DC is to reduce expenditures and preserve or enhance quality of care. The payment model options available under DC will start in January 2020. Five-year performance periods will begin January 2021.

The PCF models are focused on individual primary care practice sites. The DC payment model options hope to have a wider variety of organizations that take on financial risk and serve larger patient populations, including Accountable Care Organizations (ACOs), Medicare Advantage (MA) plans, and Medicaid managed care organizations (MCOs). Also, a competitive delivery system environment is created in the DC models and organizations offering greater efficiencies and better quality of care will be financially rewarded.

CMS is seeking public comment on the Geographic Population-Based DC payment model option with an expected performance period launch in January 2021. That model is designed to give organizations the opportunity to take full responsibility for the total cost of care and health needs of a population in a defined target region.

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