Implementing High-Quality Primary Care Rebuilding the Foundation of Health Care (2021) / Chapter Skim
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9 Payment to Support High-Quality Primary Care
9 Payment to Support High-Quality Primary Care
Pages 281-332
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From page 281... ...
. Payment should be adequate to support high-quality, independent primary care practices and flexible enough to support an emerging array of new delivery models.
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However, how primary care payments flow through organizations to reach and influence primary care delivery, and whether they are aligned with overall intent, remains a critical issue. For the purposes of this chapter and the committee's report, the committee assumes that the current multi-payer, largely employment-based system will implement its recommendations.
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. One result is that retaining seasoned primary care clinicians has become challenging.
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On the other hand, concerns about overtreatment dominate when the financial risk is on payers, such as in FFS, where the insurer pays a given fee for each service. Most research shows empirical results in parallel with theory: FFS encourages use, and capitation -- a payment model that provides a fixed amount of money per patient per unit of time paid in advance to the physician for the delivery of health care services, whether or not that patient seeks care and how much it costs -- discourages resource consumption; productivity-based pay encourages and capitated payments undermine productivity (Berenson et al., 2020; Hellinger, 1996; Kralewski et al., 2000)
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In the late 1980s, rising and varied physician-set prices and the widening gap between generalist and specialist incomes led Congress to establish the resource-based relative value scale to set prices for physician services, which account for about 20 percent of Medicare spending (CMS, 2019b)
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for 5 years and (b) raising the Medicaid primary care payment rates up to at least 100 percent of the Medicare rate for 2 years (Davis et al., 2011; Mulcahy et al., 2018)
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. PRIMARY CARE PAYMENT TODAY Financing health care in the United States is complex, with health care organizations receiving revenue from multiple sources: public payers (directly and also indirectly through contracted insurers)
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Individual clinicians are not at financial risk; they continue to be paid on an FFS basis for providing covered services. In some cases, financial incentives for both primary care teams and the care management entity are added.
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• FFS is the dominant payment mechanism for primary care clinicians. • Compared to Medicare, Medicaid pays substantially less for pri mary care services and commercial insurers slightly more.
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Option 1: The Medicare Physician Fee Schedule and the Relative Value Scale Update Committee While Medicare accounts for 20 percent of national health spending (KFF, 2019) , the relative prices set by the PFS have a profound effect on professional prices beyond Medicare beneficiaries.
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As a result, primary care services generally, and evaluation and management codes specifically, have become passively devalued in the PFS as their relative prices fall as a result of other service prices (including new technologies) increasing.
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. Thus, because the fee schedule is budget neutral and the phenomena described above are routine, primary care services have become passively devalued.
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The Protecting Access to Medicare Act of 20143 and Medicare Access and CHIP (Children's Health Insurance Program) Reauthorization Act of 20154 provided CMS with new powers to change misvalued codes and collect data to evaluate the PFS.
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However, by having an additional resource to evaluate and compare its own estimates with that of the RUC and others, CMS would be able to more adequately and fairly price primary care services in a way that accounts for their complexity and value to patients and society. Altering the Fee Schedule to Accomplish Policy Objectives Direct changes to relative prices could include a payment increase for ambulatory evaluation and management services, such as the change implemented in January 2021, or freezing rates for these services while reducing others.
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The RUC exerts significant influence on the relative prices assigned by CMS. • The RUC, together with the structure of the PFS, have resulted in systematically devaluing primary care services relative to other services and its population health benefit, reflected in large and widening gaps between primary care and specialty compensation.
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CPC provided population-based care management fees and shared savings opportunities, on top of standard FFS, to nearly 500 participating primary care practices in seven regions as a means of supporting the provision of a core set of five "comprehensive" primary
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CPC+ is a national multi-payer advanced primary care model that aims to strengthen primary care through regionally based, multi-payer payment reform and care delivery transformation (Burton et al., 2017)
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. Challenges to Implementing Hybrid Reimbursement Models Most PCMH-like primary care transformation efforts implemented by individual payers have used hybrid payment methods largely based on FFS and struggled to provide the financial resources to cover transformation costs or the ongoing cost of maintaining integrated team-based care.
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Without a substantial source of new, predictable, and sustainable revenue from multiple payers to maintain and expand new services, practices find it difficult to maintain focus on overlapping practice transformation aims, including quality improvement, team formation, chronic care coordination, and patient engagement. Thus, minimal investments, initiative overlap, and an underlying focus on visit volume impede the ability to focus on reducing total spending, which is difficult when primary care practices drive small fractions of spending themselves and have incomplete control over where and when their patients utilize care.
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• The redesign of care can take time to yield impact. Layering care management fees and shared savings on a largely unchanged chassis of FFS does not drive robust and focused practice change to reduce expensive specialty and hospital-based use; practices largely continue to operate within the confines of FFS, visit-based mentality (Bitton et al., 2012)
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CMS manages several ACO programs7 that have implications for primary care payment, and many commercial payers have ACO programs as well (Peiris et al., 2016)
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. Primary Care Contracting In response to the piecemeal efforts and heterogeneous results of hybrid payment models, recent Medicare payment reform efforts focus less on streamlining primary care transformation and more on total cost-of-care reductions.
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. Finally, other primary care payment models have been proposed but not broadly tested, such as the Comprehensive Primary Care Payment Calculator (George et al., 2019)
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. One way to measure primary care orientation is simple: the portion of total health care expenses spent on primary care services.
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It increases available funds, a key constraint to implementing high-quality primary care, and though the portion to be reallocated is a relatively small amount of total health care expenses, it would have large marginal effects in the primary care sector. It also addresses the failure of private health plan negotiations or Medicare to recognize the collective social value of primary care.
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. They attributed most of this effect to hospital price inflation caps rather than the primary care spend requirement but noted declines in outpatient use that are not statistically significant and could have resulted from more comprehensive primary care services.
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When coupled in Rhode Island with hospital price inflation caps to pay for increasing funds to primary care, there were attributable spend ing reductions. PAYMENT AS A FACILITATOR OF HIGH-QUALITY PRIMARY CARE In developing recommendations for payment policies to implement highquality primary care -- in addition to the evidence and experience on the effects of payment on cost, population health, and consumer experience -- design considerations must be assessed, including the models' effect on the development and deployment of interprofessional teams, the delivery of integrated care across settings, the patient's relationship with the primary care team, and equity.
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Pregnant women often benefit from in-home education by community health workers, and children and families benefit from care within a medical home with team members focused on preventive care services and care coordination for children with medical and social complexity. FFS payment is not compatible with the committee's definition of high-quality primary care, in that it discourages person-centered,
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Most attempts to develop these capacities in practices have recognized that it is insufficient to merely begin to pay practices differently; it is also necessary to invest in sustainable transformation resources, such as technical assistance and reimbursing practices for revenues forfeited as a result of staff development time. Medicare's CPC+ payment model provides these additional resources through a combination of consultant payments and care management fees.
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Primary care–based models that have undertaken these activities, such as Vermont's Blueprint for Health, Rhode Island's Community Health Teams, and various Oregon coordinated care organizations, have relied on flexible payment arrangements, including capitation, that encourage team-based care. A systematic review found reimbursement models have limited effects on socioeconomic and racial inequity in access, use, and quality of primary care.
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Multi-Payer Alignment As noted earlier in this chapter, the committee is making recommendations based on the current reality in the United States of a fragmented hybrid public–private financing system. Two large public payers -- Medicaid and Medicare -- constitute close to 50 percent of health care payments and are often represented by many contracted MCOs (CMS, 2019c)
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Anecdotally, a multi-payer forum often facilitated by the CPC payment models to address areas of common concern and improvement, such as quality measurement alignment, practice transformation and feedback, and health information exchange, has been beneficial in markets for promoting both better payer/ clinician relations and high-quality primary care. Finally, the CMMI-funded Healthcare Payment Learning and Action Network has been an attempt to facilitate national multi-payer discussions focused on speeding the adoption of alternative payment models by public and private payers.
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Most attribution rules assign patients based on the plurality of their outpatient visits, while some focus specifically on primary care services. The details are important; the specific services that qualify for attribution (only outpatient evaluation and management codes or a larger set of services)
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. An assessment of one risk adjustment approach to support this payment model found that the predicted and apparent costs of providing comprehensive primary care vary more than 100-fold across patients.
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. A study of primary care practices participating in CPC found that adding clinical intuition to clinical algorithms was associated with higher enrollment in care management within primary care practices (Reddy et al., 2017)
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Mechanisms using social risk adjustment factors are being tested and have shown promise. GOALS AND MEASURES OF SUCCESS FOR PRIMARY CARE PAYMENT The measure of whether a payment system for primary care is effective requires an understanding of the goals of payment design.
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The organization of primary care in the United States is quite diverse, and primary care payment models must match the capacity and capabilities of different organizations. Payers should continue to maintain a portfolio of primary care payment methods to accommodate different organizational structures, geographic cultural variations, and community realities, yet the hybrid reimbursement models reviewed here should constitute alternative base payment models, with an option remaining for the assumption of more financial risk.
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FINDINGS AND CONCLUSIONS Evidence shows that the dominant FFS payment mechanism, in combination with the process CMS uses to set relative prices for primary care and other services in the PFS, continues to devalue and shortchange primary care relative to its population health benefit, resulting in the large and widening gaps between primary care and specialty care compensation. In fact, using the portion of total health care expenses going to primary care as a measure of primary care orientation, the United States is at or below the proportion in other developed countries.
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With almost half of primary care clinicians employed in health systems, attention should be paid to primary care payment methods in those settings. Many ACOs, which have demonstrated modest savings in total spending alongside quality and patient satisfaction improvements, continue to pay primary care internally based on FFS, even though the larger organization itself may participate in risk-sharing models.
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2017b. Advanced primary care: A foundational alternative payment model (APC APM)
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2019. Health care spending slowed after Rhode Island applied affordability standards to commercial insur ers.
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2020. Health-care spending attributable to modifiable risk factors in the USA: An economic attribution analysis.
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2011. Solicitation for the comprehensive primary care initiative.
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2015. Effects of health care payment models on physician practice in the United States.
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2019. De velopment, value, and implications of a comprehensive primary care payment calculator for family medicine report from Family Medicine for America's Health Payment Tactic Team.
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2017. Primary care spending rate -- a lever for encouraging invest ment in primary care.
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2020. Primary care spending in the United States, 2002–2016.
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Washington, DC: Medicare Payment Advisory Commission.
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2019. Association between the implementation of a population-based primary care payment system and achievement on quality measures in Hawaii.
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2017. Payment and delivery in 2016: The prevalence of medical homes, accountable care organizations, and payment methods reported by physicians.
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2019. Will increasing primary care spending alone save money?
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2015. Development of a model for the validation of work relative value units for the Medicare physician fee schedule.
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