Earlier this week, CMS announced the launch of an initiative aimed at transforming the way primary care is delivered. The Comprehensive Primary Care Plus (CPC+) model will be a voluntary 5 year program accommodating some 5,000 physician practices across 20 geographic regions. Like ACOs and other alternative payment models (APMs), the CPC+ model is another step towards moving away from the traditional fee-for-service (FFS) method of reimbursement. The CPC+ model is not, however, an entirely new concept, but rather a new iteration of the previous comprehensive primary care model launched in 2012.

CMS expects that participants in the CPC+ model will focus their delivery reforms on five key Comprehensive Primary Care Functions, including (1) access and continuity; (2) care management; (3) comprehensiveness and coordination; (4) patient and caregiver engagement; and (5) planned care and population health.

To spur these delivery reforms, the CPC+ model offers primary care practices the choice of two tracks in which to participate.

Track 1: FFS with Care Management Fees and Incentives

Track 1 is geared towards practices that have the health information technology and other basic infrastructure to deliver comprehensive primary care. Practices in Track 1 will work to implement and develop comprehensive primary care capabilities. In support of this work, practices will receive a per-patient per-month care management fee (CMF) averaging $15, along with the practice’s traditional FFS reimbursement. Participants in this track will also be eligible for performance-based incentives that are based on the practice’s performance on patient experience measures, clinical quality measures, and utilization measures that drive the total cost of care. These incentives will be paid on a prospective basis, but practices will only be able to keep the funds if they meet the annual performance thresholds.

Track 2: Hybrid FFS/CPCP with Care Management Fees and Incentives

The second track targets practices that are already proficient in comprehensive primary care and that are prepared to increase the depth, breadth and scope of such care, especially to those with complex medical needs. Like Track 1 practices, practices in Track 2 will receive a monthly CMF (though it averages to $28 per patient per month, with $100 available for complex patients) as well as performance-based incentives. Track 2’s primary difference is found in its move away from traditional FFS reimbursement. Instead of Medicare’s traditional retrospective FFS structure—where a practice is paid solely based on services it provided in the past—Track 2 practices will be reimbursed through a hybrid of the traditional retrospective system and a new prospective payment system. Under this hybrid approach, practices will continue to bill FFS as they have historically done. However, CMS will pay the practices a reduced FFS amount to account for CMS shifting a portion of the FFS payments into a Comprehensive Primary Care Payment (CPCP). The CPCP will be an upfront per-beneficiary per-month payment that is paid quarterly. The CPCP is calculated prospectively based on a percentage of the practice’s expected Medicare reimbursement for evaluation and management (E&M) claims.  To calculate the CPCP, CMS will use an attribution methodology based on a plurality of primary care claims over the prior two years to identify the population of Medicare FFS beneficiaries for which each participating primary care practice is accountable.

CMS sums up the theory underlying the hybrid FFS/CPCP payment in its request for application, when it states:

We hypothesize a “sweet spot” between upfront payments and reduced FFS, where practices will be will be “incentive neutral” with regard to physically bringing a patient into the office for a billable service.

Notably, CMS appreciates that reaching this “sweet spot” will require reimbursement for services that CMS has historically been reluctant to pay for, including phone calls, e-mails, and telehealth services. As CMS states:

The CPCP also enables services to be furnished in a way that best meets the needs of the patient, whether that be by email, phone, patient portal, etc. The CPCP allows flexibility for a portion of services previously delivered in face-to-face visits and billed under FFS to be delivered in ways other than face-to-face and thus, without submission of a claim.

CMS also appreciates that true payment reform will require an industry-wide effort, and has therefore requested that commercial payers partner with CMS in supporting practices in the CPC+ model. CMS will only roll out the CPC+ model in regions where there is sufficient interest from multiple payers to support practices that participate in both tracks.  The payer solicitation process will take place between April 15-June 1, 2016. After payers and regions are selected, CMS will allow for practices to apply between July 15- September 1, 2016.

CMS believes this initiative will ultimately lead to Medicare savings.  The agency’s rationale is that more effective use of comprehensive care will reduce complications and utilization. By focusing practices on specific care delivery functions and aligning payment accordingly, CMS expects practices will provide more comprehensive and continuous care, thereby reducing patients’ complications and overutilization in higher cost settings—which, in turn, should lead to higher quality and lower cost of health care overall.  Higher levels of comprehensive care, CMS notes, are associated with lower overall utilization and costs, as well as better health outcomes.

CMS possesses broad authority to create and promote these types of payment demonstration projects.  While some in Congress may be uncomfortable with CMS’s broad authority, the reality is that it is much more challenging for Congress to write legislation and then convince the Congressional Budget Office (CBO) that the policy leads to savings.  Just last month, CMS extended a policy related to diabetes prevention under its broad authority that was championed by members of Congress for years but failed to overcome the roadblock created by a significant CBO score.  For just such reasons, in the foreseeable future, we can continue to expect creative policy proposals to germinate from CMS rather than from Congress.