May 30, 2018

The Centers for Medicare and Medicaid Services (CMS) is testing the waters on a new alternative payment model (APM) through which the agency would pay participating primary care practices a monthly per-beneficiary fee for certain services, such as office visits and some office-based procedures. As with other APMs, the proposed direct provider contracting (DPC) model would offer participating clinicians performance-based incentives related to quality and cost. Features of the model would include the ability for participants to take on two-sided financial risk, as well as voluntary enrollment by beneficiaries and development of new ways to streamline claims submission and lighten physicians’ administrative burden.

“Direct provider contracting would enhance the beneficiary-physician relationship by providing a platform for physician group practices to provide flexible, accessible, and high quality care to beneficiaries that have actively chosen this type of care model,” CMS said in a request for information (RFI).

The proposal is part of an effort by CMS’s Center for Medicare & Medicaid Innovation (CMMI) to develop “innovative person-centered and market-driven approaches that empower beneficiaries as consumers, increase choices and drive competition to drive quality, reduce costs and improve outcomes,” as the RFI described it.

DPC is one of a series of potential models the agency is planning to test that would give physician groups other options to participate in an APM.  All of the DPC models would involve CMS contracting directly with Medicare providers, who would, in turn, agree to be accountable for the cost and quality of care for a defined patient population. However, according to CMS, DPC would differ from other APMs in its level of emphasis on the beneficiary’s role in choosing a primary care practice. The model would also give practices access to a variety of tools to engage patients, their families and caregivers in taking greater ownership of the patient’s health.

The response to CMS’s RFI from healthcare organizations has been mixed.  In a letter to Seema Verma, CMS administrator, Thomas P. Nickels, executive vice president of government relations and public policy for the American Hospital Association, praised the agency’s efforts to find ways to improve access to quality care for beneficiaries and to reduce administrative burden, but called for greater transparency and detail in developing the model. The organization also called for the availability of data, preferably in real time, to enable providers to identify areas of improvement for their practices.

Among other things, AHA also urged CMS to:

• Improve existing benchmark methodologies to ensure that providers do not end up competing against their own best performance, and to share comments on those methodologies in developing DPC models;
• Allow participants to enroll in DPC either as individual physicians using their National Provider Identifier (NPI) numbers or as a group using the group’s Tax Identification Number (TIN);
• Incorporate into DPC requirements periods during which beneficiaries may not disenroll from the practices they have selected, in order to give providers longitudinal access to patients and greater opportunities to positively impact the quality of care in primary care settings;
• Offer graduated levels of risk in any DPC model, while ensuring the risk level is sufficient for the model to qualify as an APM;
• Ensure that the quality measures incorporated into the model are targeted to the primary care services that would be delivered through the model.  For example, CMS could consider a measure that determines whether beneficiaries are receiving age-appropriate, high priority screenings, such as an annual screening for depression, in a timely fashion.

In a letter to Ms. Verma and Adam Boehler, CMMI director, the Association of American Physicians & Surgeons expressed concern that the proposed model puts emphasis on the contract between the agency and providers at the potential expense of “the key ingredient to the success of Direct Primary Care or Direct Patient Care arrangements,” i.e., “mutual agreement between patient and physician about what type of care is expected and what it will cost.”  In the letter, AAPS Executive Director Jane M. Orient, MD, stated that the association is “concerned that CMS is not encouraging direct arrangements between patients and physicians. . . In addition, CMS asks for feedback on countless requirements and conditions it is considering imposing on physicians seeking to contract with CMS. To us and our members, this approach by CMS looks much more like yet another third-party-controlled ACO or capitation scheme than anything resembling the agreements Direct Primary Care practices are currently offering their patients.”

Public comments on the RFI can be found here.