Practices face little financial downside under Tier 1 of the new model and could expand their capabilities via the additional funding.


Aug. 2—The Obama administration is touting the benefits for small physician practices of a massive new primary care payment initiative, but some analysts doubt whether many of those practices will participate.

The Centers for Medicare & Medicaid Services (CMS) this week began accepting applications from practices in 14 regions across the country to participate in a new multipayer primary care model, known as Comprehensive Primary Care Plus (CPC+). The five-year primary care medical home model, which begins in January 2017, will pay practices a per-patient monthly fee in addition to regular Medicare fee-for-service payments. Practices can use those funds to pay for care improvement activities, such as coordinating care with other clinicians.

Other provisions will include prospective performance-based incentive payments that the practices either will keep or pay back to CMS based on their performance on quality and utilization metrics.

The model includes a second track that will provide a hybrid of reduced Medicare fee-for-service payments and up-front payments to help practices provide more comprehensive services for patients with complex medical and mental health needs.

The announcement opening the CPC+ application process emphasized the potential appeal to small practices.

“As a key part of CPC+, CMS and partner payers are committed to supporting primary care practices of all sizes, including small, independent, and rural practices,” Patrick Conway, MD, deputy administrator and chief medical officer of CMS, said in a release.

The program comes amid growing pressure on the Obama administration from allies and critics to reverse what’s seen as a growing number of payment policies that push small practices to join larger groups or to become employed by hospitals. Such criticism was heard when CMS proposed rules implementing the Medicare Access and CHIP Reauthorization Act (MACRA) and estimated that 87 percent of solo practices and 70 percent of practices with nine or fewer clinicians would face payment cuts under the rules.

Bob Kocher, MD, the former Obama administration healthcare advisor, became the latest former administration official to urge against more CMS rules that “tip the scales toward consolidation” of small practices.

“That means introducing payment models that limit losses for small providers to the Medicare dollars they receive rather than total spending, and which rely on multiyear benchmarks instead of single-year swings,” Kocher wrote this week in a Wall Street Journal opinion piece.

A CMS spokesman noted the agency has no CPC+ target enrollment for small practices.

“However, CPC+ is built on the lessons learned in the original Comprehensive Primary Care initiative[CPC],” the spokesman said in emailed comments. “In CPC, the average practice has about four clinicians per practice site, and approximately 60 are single-physician practices. This is a strong indication that CPC+ is an opportunity for independent practices, as well as larger or system-owned practices.”

Will They Come?

Healthcare finance advisors say the CPC+ model should benefit small practices, but some are doubtful that many will participate.

Ingrid Lund, practice manager for research and insights at Advisory Board, said she doubted “really, really small practices” would apply to participate and instead expected the bulk of participating practices to come from those with slightly fewer than 50 physicians.

“We’re also hearing a good deal of interest from the hospital-affiliated practices,” Lund said in an interview.

Small practices—especially those with fewer than 25 clinicians—will likely be intimidated by the program’s infrastructure requirements, analysts say.

“My biggest concern is that there is not going to be participation from the small and independent practices that really would benefit from the program the most,” Lynn Barr, CEO of Caravan Health, said in an interview.

Amid practice concerns about a lack of required infrastructure, such as advanced health IT capabilities supported by a vendor, Barr noted that small practices have been able to implement such improvements—with guidance—in six to eight weeks.

“It’s not that they won’t do well, it’s that they won’t apply,” Barr said. “They could all do well; we see it every day.”

Larger practices and those employed by hospital systems will have the personnel to plan and implement the required steps for clinicians. Other practice types that should do well in the CPC+ model are those with experience as patient-centered medical homes and those in accountable care organizations.

Enrollment Benefits

The CPC+ model offers a range of benefits for practices, including the unusual component, under Medicare, of up-front payments to fund the care improvements that practices likely want to make anyway. The up-front payments are not dependent on meeting quality goals but are to fund changes that providers can control.

“This is a great, low-risk funding opportunity for practices to look at to help them make the infrastructure changes in care delivery that they need to succeed” under CPC+, Eric Cragun, senior director in health policy at Advisory Board, said in an interview.

The program’s payments could be substantial, Barr said. Based on her calculations, during each of the program’s five years, participating practices should receive $100,000 to $200,000 per physician who treats an average of 1,000 qualifying patients. A CMS spokesman said the 3.5 million enrollees mentioned in the release do not include Medicaid or commercial health plan beneficiaries who would be involved in the program. The figure is based on the assumed participation of 5,000 practices with an average of four clinicians treating a total of 700 eligible Medicare enrollees.

Additionally, under MACRA, participation in Track 2 of CPC+ will allow physicians to qualify for the advanced alternative payment model (APM) bonus payments worth 5 percent of their total annual payments—while avoiding potentially burdensome quality reporting requirements and cuts of up to 9 percent of their Medicare payments.

There are few opportunities for small or solo practices to participate in APMs unless they join an ACO, said Wanda Filer, MD, president of the American Academy of Family Physicians, and many of that organization’s members who are solo practitioners want to remain independent.

“I don’t know if we ‘expect’ small or solo practices to apply but we hope those who are able to meet the requirements do apply,” Filer said in emailed comments. “Many of the practices participating in the original CPC program are small practices and have experienced great success. We see CPC+ as an important opportunity for our members regardless of their practice size.”

Here are the regions in which practices can apply to participate in CPC+:

  1. Arkansas: Statewide
  2. Colorado: Statewide
  3. Hawaii: Statewide
  4. Kansas and Missouri: Greater Kansas City Region
  5. Michigan: Statewide
  6. Montana: Statewide
  7. New Jersey: Statewide
  8. New York: North Hudson-Capital Region
  9. Ohio: Statewide and Northern Kentucky Region
  10. Oklahoma: Statewide
  11. Oregon: Statewide
  12. Pennsylvania: Greater Philadelphia Region
  13. Rhode Island: Statewide
  14. Tennessee: Statewide

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C. office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, August 02, 2016