Starting in 2020, Medicare will begin paying many physician practices and other providers a total monthly fee to cover primary care services, rather than paying for such care on a fee-for-service basis. The changes will be part of a voluntary, five-year demonstration program that the Centers for Medicare & Medicaid Services (CMS) says could see care for a quarter of Medicare beneficiaries move from fee-for-service to global payment.
The program introduces five new payment models via two separate pathways—Primary Care First and Direct Contracting. The models focus on different types of providers and offer varying degrees of financial risk.
Primary Care First
The models in this pathway are designed for use by individual primary care practices.
- Primary Care First: Practices will receive a total monthly payment for primary care in exchange for fewer administrative burdens and greater flexibility in designing their delivery approach to fit their unique set of patients.
- Primary Care First – High Need Populations: Practices caring for a seriously ill population will receive higher payment to reflect the high-need, high-risk nature of such care.
The total montly payment for both models is adjusted up or down based on on how well practices meet quality thresholds, reduce hospitalization, and reduce total costs. The bonus would be up to 50% of primary care revenue; the downside penalty would be 10%.
These models are focused on organizations that have experience with financial risk and serving larger populations, such as accountable care organizations, Medicare Advantage health plans, and Medicaid managed care organizations. The options offer both capitated and partially capitated payments that move away from traditional fee-for-service.
- Direct Contracting – Professional: Organizations will receive a fixed monthly payment for primary care and share in 50% of savings or losses.
- Direct Contracting – Global: Organizations can choose to receive a monthly fee to cover primary care only or a monthly fee to cover all the services they provide. They will bear financial risk for 100% of shared savings and losses.
- Direct Contracting – Geographic: CMS is seeking public input on this option in which potential participants would assume responsibilty for the total cost of all care for Medicare fee-for-service beneficiaries in a defined geographic region. This model would go into effect in 2021.