Issue Brief May 2020 Milbank Memorial Fund Using evidence to improve population health. How Payment Reform Could Enable Primary Care to Respond to COVID-19 By Stephanie B. Gold, MD, Larry A. Green, MD, and John M. Westfall, MD, MPH Update: This brief was revised on April 30, 2020 to incorporate additional information. Policy Points > Prospectively paid, risk- ABSTRACT adjusted per member per Primary care practices across the country are transforming the way they provide care— month payments allow in some cases literally overnight—in response to the COVID-19 pandemic. Practices are clinicians on the front devising new protocols to isolate patients with possible COVID-19, navigating shortag- lines of care to adapt to es of personal protective equipment, providing behavioral health support to patients challenges fluidly and meet with emotional distress from social isolation, and managing as much care as possible the needs of their patients through telehealth. To better equip practices for such changes, primary care payment and communities as they reform is needed, both to provide sufficient funds for transformation and to uncouple arise. payment from the delivery of specific services. > The urgent need for primary THE NEED FOR PRIMARY CARE PAYMENT REFORM care payment reform On March 6, the Centers for Medicare and Medicaid Services (CMS) expanded Medi- demands wide-scale care’s coverage of telehealth, allowing for continued delivery of care while protecting change now. patients from potential exposures.1 That such a ruling was needed at all highlights the deficiencies in the way that primary care is currently paid for. Despite efforts over the last several years to advance payment reform, the majority of primary care is still paid for on a fee-for-service (FFS) basis.2 FFS is frequently criticized for incentivizing vol- ume over value, but not enough attention is paid to another severe flaw: payment that is retroactive and tied to delivery of specific covered services does not allow health care providers to flexibly design and deliver care. In advanced primary care models, an interprofessional team provides more accessible, comprehensive, and coordinated physical and behavioral health services longitudinally. Increased access includes non-face-to-face care such as video and telephone visits. 1 A system based in fee-for-service where codes for service delivery must be added piecemeal to allow primary care to do all that it needs to do will always put us behind. While crucial during a pandemic, virtual visits are also on an individual patient’s diagnoses and demographic appropriate and beneficial for many needs year-round. factors. In 2017, the median care management fee was Yet primary care practices have been struggling to imple- $11.25 PMPM averaged across payers. Medicare provid- ment such advanced care models for years because busi- ed the largest care management fee at $28 PMPM. The ness models and payment policies have not kept pace. majority of Track 2 practices elected to have the CPCP cover only 10% of total Medicare payments for selected Non-face-to-face visits are just one example of evaluation and management services, though they will countless primary care approaches and tasks that are be required to select increasingly higher proportions not covered under current FFS codes. Other unreim- in subsequent years.4 Most other payers had not yet bursed care may include quality improvement meet- developed their own CPCP-equivalent in the first year of ings,asynchronous communication with patients, and the program. These amounts have been insufficient to employing non-billable care team members such as cover the myriad primary care activities not reimbursed community health workers. through FFS codes-only 51% of Track 2 practices report- ed the Medicare payments were adequate to transform First Steps care and only 33% reported other payers’ payments were Prospectively paid, risk-adjusted per member per month adequate.5 (PMPM) amounts, independent of the specific services delivered, allow clinicians on the front lines of care to Primary Care First, another CMMI demonstration project adapt to challenges fluidly and meet the needs of their slated to start in 2021, builds on the CPC+ Track 2 model.6 patients and communities as they arise. Customization In this model, the majority of primary care payments take and application of the best solutions for each patient— the form of a PMPM for all practices, with an additional personalized, relationship-based care—can be imple- reduced flat rate for visits and potential for upside and mented without regard to what fees are paid for what downside performance-based adjustments. Primary service by what provider. Care First has calculated an estimated Medicare PMPM amount ranging from $28 to $175 depending on the The Comprehensive Primary Care Plus (CPC+) Track 2 practice’s average HCC score. These PMPM amounts are model, a demonstration project of the Center for Medi- calibrated to represent about 60% of the total primary care and Medicaid Innovation (CMMI), began work in this care payment.7 Previous studies have estimated at least direction for participating practices by decreasing FFS 63% of practice payment would need to be prospective reimbursement while providing a prospective payment to enable practice-wide transformation.8 However, the called a Comprehensive Primary Care Payment (CPCP) total practice payment is designed to be budget neutral in addition to a care management PMPM that is risk-ad- for CMS, so while it shifts from retrospective to prospec- justed based on Hierarchical Condition Category (HCC) tive payment, this does not provide increased support scores.3 The HCC score is used to predict costs based Milbank Memorial Fund • www.milbank.org 2 to most practices. Notably, CMS is soliciting proposals comparisons, breaking down these models into their from other payers to offer alternative payments similar underlying component parts supports understanding to Medicare in this model, but practices apply to Primary of broad conceptual similarities and differences (see Care First before this is established, unlike the process Table 1). for CPC+, where multipayer participation was assured in advance. Primary Care Payment Reform for All CMS should set the course for the nation’s primary While there are many details in design and implemen- care practices by universally instituting risk-adjusted, tation of alternative payment models that complicate prospective PMPMs for the majority of primary care Table 1. Pros and Cons of Different Payment Models and Payment Model Features for Primary Care Payment Who Bears model or Description Pros Cons Operational Issues Financial Risk feature Fee-for-ser- Retrospective reim- •C an be used to • Encourages greater • Insurers • Current fee schedule vice (FFS) bursement based on encourage underuti- volume favors procedural over • Patients via certain billing codes lized services cognitive care, leading • Redesigned services cost-sharing for specific services to to overall inadequate have to be added to bill- mechanisms patients amounts of primary care ing codes piecemeal (deductibles, reimbursement coinsurance) Capitation Prospective payment •E nables greater flexi- • Potential for insuffi- • Practices/ • Without risk adjust- Base payment model for the full range of bility and innovation in cient funds for higher providers ment, amounts inade- health care services of care delivery needs patients quate for patients with a specific population greater needs •E ncourages cost for a fixed period of control • Overall amounts inade- time quate if rates based on •S implifies billing historic FFS reimburse- ment Blended FFS FFS plus prospective •B alances pros of FFS • Balances cons of FFS • Blend of • Predominance of FFS and Capita- payment; prospective and capitation, favor- and capitation, favoring insurers and over capitation may not tion component may be ing whichever model whichever model is the practices/ reach a tipping point specific to certain is the predominant predominant portion of providers that enables restructur- care elements (e.g. portion of practice practice payment ing practice care coordination). payment Pay-for-per- Payment for achieving •E ncourages improved • Increases administra- • Underlying • Measures used often formance or improving upon quality and/or reduced tive burden model plus focus on single diseases (P4P) defined metrics. costs additional risk and processes rather and/or reward than whole person to practices/ outcomes or key com- providers ponents of high-quality primary care Payment model feature Shared Bonus payment for •E ncourages cost • May lead to inappropri- • Underlying • Basing benchmarks on Savings keeping costs below a control ate underutilization of model plus historic expenditures benchmark if set quali- • L inks ability to receive services additional risk can perversely reward ty targets are meet. and/or reward prior inefficiency savings to meeting If two-sided model, to practices/ quality targets • Conflicting messages if at risk of penalty if providers providers are paid FFS benchmark is exceed- ed. Risk adjust- Adjustment based •M akes payments more • May encourage • Underlying • Most models of risk ad- ment on patient and/or com- commensurate with upcoding model with justment do not account munity characteristics costs decreased risk for community-level to reflect anticipated to practices/ risk, which improves costs providers predictive ability Milbank Memorial Fund • www.milbank.org 3 payments in Medicare now and providing similar be insufficient to enable significant practice change guidance for state Medicaid agencies. Commercial pay- and practices will experience increased administrative ers and self-insured employer-based health plans should burden. If, for example, a practice receives a PMPM tied follow suit. Congress should enact legislation to enable to particular requirements from a payer that covers 20% this change and drive progress. While piloting CPC+ and of their patient population, can they afford to implement Primary Care First as demonstration projects moves the and systematize a practice-wide change? If not, are they needle in the right direction, all practices need more to provide tiered care based on each patient’s payer flexible payment, and waiting for results before scaling source? such payment reform means five more years of most Fourth, if risk adjustment methodologies are inadequate, practices continuing to be unable to optimally meet practices may have insufficient funds to care for sicker their patients’ needs. The urgent need for primary care patients. Methods such as averaging an HCC score for payment reform demands wide-scale change now. The the practice will likely not sufficiently account for with- COVID-19 pandemic has made this all the more urgent. in-practice variation of needs. Accounting for commu- The loss of revenues from face-to-face visits is placing nity-level risk based on social factors may improve risk some practices in danger of closing their doors.9 prediction.11,12 Elements of CPC+ and Primary Care First highlight Finally, performance measures have the potential to several key issues in scaling comprehensive primary detract from patient-centered care. The evidence from care payment reform. pay-for-performance programs to date suggests they First, current primary care payment is inadequate both have increased administrative burden and negatively because it is retroactive and tied to specific services impacted continuity of care while only leading to small and because the overall amount is insufficient; both the improvements in quality.13,14,15 Newer patient-oriented “how” and “how much” are crucial. Simply shifting historic primary care measures16 and measures designed to FFS amounts to equivalent prospective payments does assess the pillars of primary care (comprehensive- not address the issue of systematic underinvestment in ness,17 continuity,18 coordination, access) are promising primary care. developments to consider. Additionally, the potential for downside performance adjustments of up to 10% in Second, implementation may be more difficult for prac- Primary Care First may introduce too much financial risk tices with limited prior experience in practice trans- for practices. formation. This may be an issue particularly in smaller independent practices that lack the resources of a larger These challenges, however, do not necessitate waiting system. For such practices, beginning with an initial step before implementing comprehensive payment reform of providing an intermediate PMPM alongside decreased broadly; the potential benefits of enacting wide-scale FFS reimbursements similar to CPC+ Track 2 may allow prospective payment outweigh the potential risks. If for a successful transition. To ensure that practices are we let perfect be the enemy of the good, primary care prepared to use proactive funds to advance models of practices and their patients will suffer. Instead, CMS care, practice transformation support from CMS will should plan for rapid-cycle improvements. Features of also be necessary. This support should include assis- comprehensive payment reform—risk adjustment meth- tance with practice finance management for alternative odology, selection of performance measures—should be payments. In CPC+, payers noted that some practices continuously reassessed and adjustments made accord- were not ready to accept alternative payments or were ingly. More important than the specific model chosen is encountering barriers in needing to switch their claims that we move toward the majority of practice payment processing systems to accommodate these payments.10 as a risk-adjusted, prospective amount; multipayer align- ment; and limited adjustments for performance based on Third, without multipayer participation and alignment, primary care appropriate, patient-centered measures. the overall prospective funds at the practice level will Milbank Memorial Fund • www.milbank.org 4 Creating a Flexible System of Payment for the Future While the COVID-19 pandemic is unprecedented, there are always new challenges to face or changes to adapt to in primary care. The need for flexibility in care delivery is not new, and it will not disappear after COVID-19 cases begin to decrease. A system based in FFS where codes for service delivery must be added piecemeal to allow for primary care to do all that it needs to do now and in the future will always put us behind. Managing the immedi- ate needs of patients during this crisis should not mean pressing pause on crucial improvements to our systems of care that are needed concurrently. Let us implement risk-adjusted, prospective primary care payments now for all practices and enable the largest platform of health care delivery to adapt to meet people’s needs—for the current COVID-19 crisis, for routine care, and for future crises yet unknown. Milbank Memorial Fund • www.milbank.org 5 NOTES Telehealth. Medicare.gov: The Official U.S. Government Site for Medicare. https://www.medicare.gov/coverage/tele- 1 health. Accessed April 10, 2020. 2 Rama A. Payment and delivery in 2016: the prevalence of medical homes, accountable care organizations, and payment methods reported by physicians. American Medical Association Policy Research Perspectives. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/public/health-policy/prp-medical-home- aco-payment.pdf. Published 2017. Accessed April 10, 2020. 3 Comprehensive Primary Care Plus. Centers for Medicare & Medicaid Services website. https://innovation.cms.gov/ initiatives/comprehensive-primary-care-plus. Updated April 8, 2020. Accessed April 10, 2020. 4 Peikes D, Anglin G, Harrington M, et al. Independent evaluation of Comprehensive Primary Care Plus (CPC+): first annual report. Mathematica. https://www.mathematica.org/our-publications-and-findings/publications/indepen- dent-evaluation-of-comprehensive-primary-care-plus-cpc-first-annual-report. Published April 2019. Accessed April 10, 2020. 5 5Ibid. 6 Primary Care First Model Options. Centers for Medicare & Medicaid Services website. https://innovation.cms.gov/ innovation-models/primary-care-first-model-options. Updated April 8, 2020. Accessed April 10, 2020. 7 Webinar: Primary Care First Model Options-Payment. Centers for Medicare & Medicaid Services website. https:// innovation.cms.gov/webinars-and-forums/pcf-payment-webinar. Updated November 22, 2019. Accessed April 10, 2020. 8 Basu S, Phillips RS, Song Z, Bitton A, Landon BE. High levels of capitation payments needed to shift primary care toward proactive team and nonvisit care. Health Affairs. 2017;36(9):1599-1605. 9 Quick COVID-19 primary care survey. The Larry A. Green Center and the Primary Care Collaborative. https://www. green-center.org/s/C19-Series-3-National-Sample-Executive-Summary-7zjf.pdf. Accessed April 10, 2020. 10 Peikes D, Anglin G, Harrington M et al. Independent evaluation of Comprehensive Primary Care Plus (CPC+): first annual report. Mathematica. https://www.mathematica.org/our-publications-and-findings/publications/indepen- dent-evaluation-of-comprehensive-primary-care-plus-cpc-first-annual-report. Published April 2019. Accessed April 10, 2020. 11 Hu J, Kind AJH, Nerenz D. Area deprivation index predicts readmission risk at an urban teaching hospital. Am J Med Quality. 2018;33(5):493-501. 12 Ash AS, Mick EO, Ellis RP, Kiefe CI, Allison JJ, Clark MA. Social determinants of health in managed care payment formulas. JAMA Intern Med. 2017;177(10):1424-1430. 13 Gillam SJ, Siriwardena AN, Steel N. Pay-for-performance in the United Kingdom: impact of the Quality and Outcomes Framework—a systematic review. Ann Fam Med. 2012;10:461-468. 14 Roland M, Olesen F. Can pay for performance improve the quality of primary care? BMJ. 2016; 354:i4058. 15 Roland M, Guthrie B. Quality and Outcomes Framework: what have we learnt? BMJ. 2016;354:i4060. 16 Etz RS, Zyzanski SJ, Gonzalez MM, Reves SR, O’Neal JP, Stange KC. A new comprehensive measure of high-value aspects of primary care. Ann Fam Med. 2019;17:221-230. 17 Bazemore A, Petterson S, Peterson LE, Phillips RL. More comprehensive care among family physicians is associated with lower costs and fewer hospitalizations. Ann Fam Med. 2015;13:206-213. 18 Bazemore A, Petterson S, Peterson LE, Chung Y, Phillips RL. Higher primary care physician continuity is associated with lower costs and hospitalizations. Ann Fam Med. 2018;16:492-497. Milbank Memorial Fund • www.milbank.org 6 AUTHORS Stephanie B. Gold, MD, is a practicing family physician at a federally qualified health center in Denver, Colorado, a scholar at the Eugene S. Farley, Jr. Health Policy Center and an assistant professor in the Department of Family Medicine at the University of Colorado. Her research and policy work focuses on payment reform for primary care and integrating behavioral and social health with primary care. She serves on the executive committee of the board of the Colorado Academy of Family Physicians and is a member of the Colorado Primary Care Payment Reform Collaborative. Dr. Gold completed medical school at the University of Virginia, family medicine residency at the University of Colorado - Denver Health Track, and a health policy fellowship with the Farley Center following residency. Larry A. Green, MD, is distinguished professor of family medicine and the Epperson-Zorn Chair for Innovation in Family Medicine and Primary Care at the University of Colorado and senior advisor to the Eugene S. Farley Jr. Health Policy Center. He is an academic family physician who has served in various roles including medical practice in rural and urban settings, residency director, investigator, teacher, and department chair. He directed Prescription for Health, funded by the Robert Wood Johnson Foundation focused on addressing unhealthy behaviors in primary care practice and Advancing Care Together funded by the Colorado Health Foundation, aiming to change a broad spec- trum of practices to provide integrated care. He served as the founding director of the Robert Graham Center for Policy Studies in Family Medicine and Primary Care in Washington, DC, and is a member of the National Academy of Medicine. His current work emphasizes redesigning how clinical practice, health professions education, and clinical research are done. Dr. Green completed medical school at Baylor College of Medicine and family medicine residency at the University of Rochester. John M. Westfall, MD, MPH, is a family doctor in Washington, DC, and director of the Robert Graham Center for Policy Studies in Family Medicine and Primary Care. Dr. Westfall was on the faculty of the University of Colorado for over 20 years, including serving as associate dean for rural health, director of community engagement for the Colorado Clinical Translational Science Institute, AHEC Director, and senior scholar at the Eugene S. Farley Jr. Health Policy Center. After joining the faculty at the University of Colorado Department of Family Medicine, Dr. Westfall started the High Plains Research Network, a geographic community and practice-based research network in rural and frontier Colorado. He practiced family medicine in several rural communities including Limon, Ft. Morgan, and his hometown of Yuma, Colorado. In 2019, he completed two years as the medical director for Whole Person Care and Health Communities at the Santa Clara County Health and Hospital and Public Health Department. His research interests include rural health, linking primary care and community health, and policies aimed at assuring a robust primary care workforce for rural, urban, and vulnerable communities. He completed his MD and MPH at the University of Kansas School of Medicine, an internship in hospital medicine in Wichita, Kansas, and his family medicine residency at the University of Colorado Rose Family Medicine Program. Disclaimer: The opinions expressed in this article are the authors’ own and do not represent the positions of their affiliated organizations. Milbank Memorial Fund • www.milbank.org 7 About the Milbank Memorial Fund The Milbank Memorial Fund is an endowed operating foundation that works to improve the health of populations by connecting leaders and decision makers with the best available evidence and experience. Founded in 1905, the Fund engages in nonpartisan analysis, collaboration, and communication on significant issues in health policy. It does this work by publishing high-quality, evidence-based reports, books, and The Milbank Quarterly, a peer-reviewed journal of population health and health policy; convening state health policy decision makers on issues they identify as import- ant to population health; and building communities of health policymakers to enhance their effectiveness. 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