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Medicare’s New Payment Model

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April 17, 2016


The Centers for Medicare & Medicaid Services is launching a new medical home payment model that provides physicians with up-front payments and other financial incentives to encourage more comprehensive and coordinated primary care—especially for patients with complex diseases.


Called Comprehensive Primary Care Plus, or CPC+, the program is a voluntary, five-year demonstration project that brings together Medicare, commercial health plans, and state Medicaid agencies. The project broadens use of the “medical home” payment model in which physician practices take on a robust role in coordinating all medical services a patient needs, regardless of provider or setting.


The program will be implemented in up to 20 regions and encompass more than 20,000 doctors and 25 million Medicare beneficiaries. It begins January 2017.




  • All participating physician practices will be required to make changes in the way they deliver primary care, ranging from enhanced in-person hours and 24/7 telephone/electronic access to delivering preventive care and working with hospitals and other clinicians to provide better coordinated care.
  • CPC+ offers two payment tracks:
    • Physician practices in Track 1 will receive an up-front, per-beneficiary payment per-month (PBPM) averaging $15 for greater care management and care coordination.They will also continue to receive fee-for-service payments.
    • Track 2 practices will receive an up-front PBPM payment averaging $28, which incorporates an up-front $100 payment to support care for patients with complex and behavioral health needs. Also, instead of full Medicare fee-for-service payments, Track 2 practices will receive a hybrid payment which entails reduced FFS payments and an upfront additional payment for comprehensive primary care services.
  • CMS will employ performance-based incentives, in which practices will be able to keep—or be required to pay back—a portion of their upfront funding depending on how well they score on quality and outcomes measures. 
  • CMS is now considering which regions of the country it will select for the program. It will choose those in which there is sufficient interest from multiple payers to support practices’ participation in the project. 
  • CMS says the multi-payer participation is necessary to provide the financial resources physicians need to make fundamental changes in their practices.
  • The program is built upon the Comprehensive Primary Care Initiative, started in 2012, in which Medicare and commercial insurance plans provided non-visit-based care management fees for coordinating the care of patients.


For more information, CMS offers a fact sheet, press release, and information page.

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