Physician Compensation

Some hospital-employed physicians will qualify for new primary care models

May 9, 2019 3:50 pm

May 1—Certain physicians employed by hospitals and health systems will be allowed to participate in new Medicare primary care models that aim to enroll one-quarter of primary care providers.

The eligibility of hospital-employed physicians was one of many areas of uncertainty around five new Medicare primary care models unveiled April 22.

But the Centers for Medicare & Medicaid Services, having begun hosting provider calls to clarify the models, indicated hospital-employed physicians can participate as long as there is a brick-and-mortar location with a group of national provider identification numbers (NPIs) together, said Dennis Butts, managing director at Navigant.

Chad Mulvany, director of healthcare financial practices, perspectives and analysis, for HFMA, noted that if hospital-employed physicians were not allowed to participate, the new models likely would struggle to find primary care physicians in regions where the Comprehensive Primary Care Plus (CPC+) program already operates. Physicians in CPC+ will be able to move from it to the new primary care models in 2021, a year after most of the new models launch.

The detail could prove key to the program’s reach since 42% of physicians were employed by hospitals as of July 2016, according an Avalere Health analysis.

Payment and quality details

Trump administration officials touted the ability of the new models to reduce administrative burdens for participating physicians. Although CMS has not yet released the application process, the agency plans to provide claims data for patient populations to help with some of the data burden, said Butts.

“Also, those in CPC+ can leverage work they’re already doing,” Butts said.

Additionally, the availability of increased payments and a flat fee may help offset any analytics costs for practices, he said.

The key elements of the models’ payment structure, Butts said, include:

  • A payment mechanism that allows care to be driven by clinicians rather than administrative requirements and revenue cycle management
  • A population-based payment to provide more flexibility in the provision of patient care, along with a flat fee for primary care visits
  • A performance-based adjustment with an upside of 50% of Medicare revenue and a downside of 10%, assessed and paid quarterly, as incentive to reduce costs and improve quality.

Primary Care First (PCF) model payment details provided this week by CMS include:

  • Comparison to a national minimum-quality benchmark, with payment cuts for  participants finishing below the benchmark
  • Eligibility for those in the top 50% of participants for a performance adjustment relative to other practices
  • Eligibility of practices not meeting the national benchmark for a 3.5% bonus if they improve

The PCF model focused on chronically ill, seriously ill populations (SIP) of beneficiaries will include payments of:

  • $325 for initial visits
  • $275 PMPM for up to 12 months
  • Up to $50 PMPM for high-quality care

Butts said he expects CMS to cut its typical number of quality metrics under the new models, as well as be more “focused” in assessing quality.

“The measures were selected to be actionable, clinically meaningful and aligned with CMS’s broader quality measurement strategy,” Butts said. These measures include:

  • Utilization measure for performance-based adjustment calculation (years 1-5)
  • Acute hospitalization utilization (HEDIS measure)
  • Quality gateway starting in year 2 (using MACRA’s Merit-based Incentive Payment System as a benchmark)
  • CPC+ Patient Experience Care Survey
  • Diabetes HbA1C poor control (>9) (eCQM)
  • High blood pressure control (eCQM)
  • Care plan (registry measure)
  • Colorectal cancer screening (some measures do not apply for some of the new models)
  • For high-risk and seriously ill populations, domains could include 24/7 patient access and days at home  

CMS has not yet provided details on promised payment waivers.

Efforts to curb beneficiary leakage

Although the new models continue to allow “voluntary alignment” by Medicare fee-for-service beneficiaries with participating practices, Butts said beneficiaries will have stronger incentives to stay in-network. Those include waived cost sharing for staying in-network and increased cost sharing for using unaligned providers.

CMS also plans to release details during the coming application period on “beneficiary incentives and payment waivers.”

“We would expect that they would work to mimic the design elements of MA and the ACO waivers, while at the same time working to honor patient choice, which is an element of this program,” Butts said.

Pathways for new types of stakeholders

The models will include options for “new-market entrants, such as healthcare technology and retail companies,” to invest in primary care models, consumer-engagement programs and technologies as a “partnering option for dissatisfied physicians,” Butts said.

The models’ risk adjustment will be based on a review of historical Medicare claims, which means social determinants of health (SDOH) will not be included because there are no codes for SDOH.

Physicians participating in bundled-payment models are allowed to participate but will be ineligible for “double payment,” Butts said. However, they will garner an additional flat fee.

Participants also are eligible for the annual bonus, as established by the Medicare Access and CHIP Reauthorization Act, of 5% of their Medicare payments for participating in advanced alternative payment models.


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