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At Your Neighborhood Doctor’s Office, an Alternative to Fee-For-Service

The Center for Medicare and Medicaid Innovation has unveiled a new payment model for primary care aimed at transforming care delivery and improving outcomes.

Image of medical professional giving care to patient.

The Center for Medicare and Medicaid Innovation (CMMI) recently announced the launch of Making Care Primary (MCP), a new payment model that focuses on strengthening primary care delivery. CMMI will launch the 10.5‑year model in eight states (Colorado, Massachusetts, Minnesota, New Jersey, New Mexico, New York, North Carolina, and Washington), where they will partner with Medicaid, Medicare, and commercial payers to align strategies to improve primary care across patients.

Why focus on primary care?

Primary care is the foundation of a high-performing health care system and is associated with better population health, more efficient use of services, and more equitable outcomes. A robust primary care system can also help reduce wasteful health care spending by ensuring patients receive timely access to preventive care, improved management of chronic conditions, and care coordination across settings.

However, a key challenge with our current primary care system is that the predominant payment model, fee-for-service (FFS), fails to give providers the flexibility they need to deliver high-quality, patient-centered primary care. Beyond encouraging providers to focus on the number of services they provide rather than the value of those services to patients, FFS also limits reimbursement to a narrow set of billable services rather than giving providers the flexibility to address patient needs comprehensively.

Changing how providers deliver and are paid for primary care can strengthen our health care system, improve patient outcomes, and reduce unnecessary spending. Unlike FFS, prospective, population-based payment models give providers an upfront payment to manage patients’ care and enable them to deliver more personalized, high-quality care. Experts agree that moving to population-based payments is critical for strengthening primary care.

What are the specifics of the MCP model?

MCP aims to ensure patients receive coordinated and patient-centered care, with the goal of improving quality and health outcomes while also lowering costs. The model has three tracks for providers, with full payment details expected later this year:

  • In Track 1, providers without prior experience with payment reform will focus on building the infrastructure to change how they deliver care with the help of additional financial support.
  • In Track 2, providers with some experience with payment reform will focus on partnering with social service providers and specialists, providing care management to patients, and screening for behavioral health needs. Providers in this track will receive half of their payments through FFS and half through prospective, population-based payments, which give them enhanced flexibility to deliver coordinated, patient-centered care.
  • In Track 3, providers with the most experience with payment reform will focus on using team-based approaches to improve care, developing partnerships with social services and specialty providers, and deepening connections to community resources. These providers will not receive FFS payments. Instead, they will receive a fully prospective, population-based payment, giving them the greatest flexibility to deliver coordinated, patient-centered care.

Ensuring No Providers or Patients Are Left Behind

While population-based payments are a promising alternative to FFS, provider uptake has been sluggish. Fewer than half of primary care practices are participating in alternative payment models, and providers serving low-income and disadvantaged populations – known as safety net providers – have even lower participation rates due to infrastructure constraints and financial barriers. As a result, low-income and disadvantaged patients have been less able to experience the benefits of payment reforms including improved quality and more coordinated and person-centered care. 

With its progressive tracks targeting providers new to payment reform, MCP will help safety net providers develop the capacity to partake in payment reforms that could improve care for their patients.

A Step in the Right Direction

There is growing consensus among experts that population-based payments are necessary to establish a more robust primary care system. Transitioning providers away from FFS and into population-based payment models will ensure that they can dedicate more time and resources to providing high-quality, individualized care.

Although the technical details of the MCP model have yet to be released, the MCP marks a step towards advancing high-quality, patient-centered primary care. With a focus on aligning payment approaches across payers – including commercial payers, Medicare and Medicaid – MCP will help to harmonize providers’ approach to patient care across the patients they serve and bring a greater share of patients under this promising payment model.

A Call to Take Additional Steps

The evidence is clear that some population-based payment models can improve care and lower costs. These models include accountable care organizations (ACOs) in which providers come together to coordinate care and are held responsible for the total cost and quality of care. ACOs with more primary care providers and a greater focus on delivering primary care services have tended to be more successful than ACOs with more specialists, highlighting primary care’s foundational role in improving population health and constraining costs.

CMMI’s launch of the MCP model signals the Biden administration’s interest in moving more primary care providers, particularly those new to payment reform, out of FFS and into population-based payment models. However, MCP excludes primary care providers participating in ACOs. Incorporating population-based payments for primary care providers within ACOs would further align incentives for providers to improve patient care. A diverse group of stakeholders including primary care providers and ACOs have called for CMS to introduce prospective, population-based payments for primary care providers within the Medicare ACO program. A parallel effort to MCP that would provide population-based payments to primary care providers in ACOs is needed to create even stronger incentives for providers to improve population health and lower costs. Looking beyond CMMI’s new MCP model, there are additional opportunities that Congress could act on to improve physician payments and further strengthen primary care including reassessing Medicare payments to better reflect the value of primary care. 

For more on AV’s work on payment reform, check out AV’s Payment Reform Fact Sheet.