CMMI Proposed Change to Primary Care Payment Model – Strategic Implications for Systems of Health




Last month the focus of healthcare news reports was a new payment model for primary care visits. As part of current government efforts to advance value-based care and reimbursement transformation, the Center for Medicare and Medicaid Innovation (CMMI) is launching initiatives that base payments on quality of care. The new model will encourage the use of technologies, including digital and telehealth, and enhance the payment model for ambulance emergency services by covering transport to alternative locations, including a physician office or urgent care clinic.


CMS Deputy Administrator for Innovation and Quality and CMMI Director Adam Boehler has launched a proposal to alter the payment system for primary care, in what stakeholders are calling his “first test” to advance “value-based transformation.” This new model, anticipated to be the first of many initiatives coming from CMMI, is expected to be unveiled in the coming weeks.5

Reports indicate that primary care payment reform will encourage the use of new technologies, including telehealth services and mobile connectivity for chronically ill patients, allowing them to remain in their homes and keeping them out of hospitals. Another component of the new plan addresses physician shortages, suggesting the use of the “non-physician” healthcare workforce (including mid-level care providers, like nurse practitioners (NPs) and physician assistants (PAs), technicians, and home aides, etc.) to fill the gap in primary care delivery.6


Boehler transitioned to CMMI from Landmark Health, which utilized various technologies to provide home care services to chronically-ill patients. Landmark Health’s model is based on outcomes and assumes full financial risk for its patients. Boehler boasted the providers used a “practical” approach to care and saw a reduction in hospital admissions by 40 percent and a decrease in mortality rates. The company’s business model was not payment per visit, but rather approached care as “we did whatever made sense to do to take care of the patient.” He is applying the same practical approach to evolving the nation’s healthcare system.1,4

An example of efforts to advance value-based care:
ERDMAN-ALERT-CMMI_Value-Based-Care-Call-Out Image


CMMI’s proposed primary care payment change is part the strategy employed by the Department Health and Human Services (HHS) to accelerate value-based purchasing. The new model is built on four assumptions, as identified by Adam Boehler during a press briefing:2

Patients as consumers – “The patient is sometimes the last thought … Our question is, how do you let the consumer drive the system? Some of it is transparency and interoperability … and how do you build a market that answers consumers’ desires?”

Physicians as accountable entities – “This is a super important constituency. It’s important that physicians have only the patient’s best interest at heart, so it’s important to remove as much burden as we can so they can focus on their patients.” “There are a whole bunch of quality measures out there, but we don’t need to measure metrics that don’t measure quality.”

Payment for outcomes – “Most of the time if you see something wrong in the healthcare system, it’s because we’re paying the wrong way. So, we’re looking at a variety of different areas where we say, ‘Does this make sense or not?’ … [For example], if you call 911 today, the ambulance isn’t paid unless it takes you to the hospital. That’s a silly incentive … Let’s pay if somebody can take care of the patient in the home if that works.”

Prevention – “Right now, medical care is siloed from housing, social services, and food stamps. If you were going to design the system today from scratch, you wouldn’t silo those; you’d look at the whole person. We’re interested in preventing disease before it occurs, and social determinants of health are a part of that effort.”


After Primary Care Takes Center Stage – Implications for Health Systems

Systems of health must take a fresh look at their primary care capabilities and strategies. The role, scope, and impact of primary care services will dramatically expand as hospitals and health systems participate in alternative payment models, contract with plans and employers, and develop retail health services for consumers.

The table below illustrates the shift from traditional primary care services to a deeper and wider primary care strategy that most hospitals will be required to implement.3

ERDMAN-ALERT-CMMI_Primary-Care_Table-Update-2Source: The Keckley Report “Primary Care 3.0: The Front Door to Health System Transformation” September 24, 2018


Resources Cited

  1. Diamond, D. (Jan. 14, 2019). “Inside the Medicare innovation lab’s big plans.” Politico.
  2. Frieden, J. (Aug. 30, 2018). “Fee-for-service should go, says CMMI chief – But that doesn’t mean capitating all providers, Adam Boehler says.” MedPage Today.
  3. Keckley, P. (Sep. 24, 2018). “Primary care 3.0: The front door to health system transformation.” The Keckley Report.
  4. Meltzer, R. (Aug. 30, 2018). “CMMI director: Home visits could be focus of upcoming Medicare demos.” FierceHealthcare.
  5. Porter, Steven. (July 18, 2018). “Former Landmark Health CEO tapped to lead HHS value-based transformation” HealthLeaders.
  6. Ross, C. (Feb 26, 2019). “Medicare’s solution for saving primary care: Blow up the office visit.” Stat.
  7. U.S. Department of Health & Human Services (Feb. 14, 2019). “HHS launches innovative payment model with new treatment and transport options to more appropriately and effectively meet beneficiaries’ emergency needs [Press Release].”


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