CMS unveils new multi-payer, primary care initiative to reinforce move away from fee-for-service reimbursement model

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Posted by Anne Phelps, Principal, US Health Care Regulatory Leader and Daniel Esquibel, Senior Manager, Deloitte & Touche LLP on April 20, 2016.

The Centers for Medicare and Medicaid Services (CMS) on Monday, April 11, 2016, announced the Comprehensive Primary Care Plus (CPC+) initiative, marking the next wave in payment and delivery system reform efforts through its Center for Medicare and Medicaid Innovation (the Innovation Center). Notably, CPC+ is designed to bring together commercial health care payers and state Medicaid programs alongside Medicare to provide care management fees to help steer primary care practices away from the fee-for-service (FFS) reimbursement system.

CPC+ builds off of the Comprehensive Primary Care initiative, which the Innovation Center launched in 2012 and is scheduled to sunset at the end of 2016. In addition, CPC+ incorporates feedback from the 2015 Request for Information on Advanced Primary Care Concepts.

CPC+ is scheduled to launch in January 2017 and run for five years. Eligible primary care practices in as many as 20 regions may elect to participate in one of the two tracks of CPC+. Track 1 and Track 2 of CPC+ will each accommodate up to 2,500 practices, representing as many as 20,000 clinicians and 25 million patients overall. The Innovation Center says the two tracks are intended to reflect different levels of preparedness for participation in advanced payment and delivery models.

It remains unclear how the CPC+ initiative will interact with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and whether a primary care practice participating in such a payment and delivery model would be considered an eligible alternative payment model (APM) entity under the law. MACRA provides temporary financial incentive payments beginning in 2019 and higher payment updates beginning in 2026 for health care professionals who achieve certain revenue thresholds through eligible APM entities. A FAQ released with the initiative announcement stated that the criteria for alternative payment models under MACRA “will be developed in forthcoming notice and comment rulemaking.” However, CMS’s emphasis on the multi-payer foundation of the initiative is notable given the incentives in MACRA and other Innovation Center efforts to foster alignment across payers and drive changes to care delivery for all patient populations.

Model details

CPC+ is a regionally-based, multi-payer payment and care delivery model that includes two separate tracks. The initiative is intended to help primary care practices offer more flexible, patient-centered care through non-visit-based care management fees paid by Medicare and other CPC+ payers on a per member per month basis. Practices in both tracks will be required to make changes in care delivery with a focus on five Comprehensive Primary Care Functions:

  1. Access and continuity of care
  2. Care management
  3. Comprehensiveness and coordination of care
  4. Patient and caregiver engagement
  5. Planned care and population health

For practices that participate in CPC+, there will be limitations for which other CMS or Innovation Center models are open to them. Notably, CPC+ practices may not participate in Medicare accountable care organizations (ACOs), including the Medicare Shared Savings Program (MSSP) and Next Generation ACO. Conversely, CPC+ practices may participate in Model 2 and Model 3 of the Bundled Payments for Primary Care Initiative and the Oncology Care Model. CPC+ practices also may engage in sharing arrangements with participant hospitals in the Comprehensive Care for Joint Replacement (CCJR) Initiative, which began on April 1, 2016.

In order to participate in CPC+, practices must have a minimum of 150 attributed Medicare beneficiaries. A majority of a practice’s patients should be covered by CPC+ through a combination of participating CPC+ payers. Medicare FFS beneficiaries will be attributed to practices based on a retrospective lookback of primary care visits over the previous two years. Importantly, incentive payments will be made prospectively.

Practices that participate in CPC+ will need to carefully track which patients are attributed to the initiative. For example, practices may not bill Medicare for chronic care management (CCM) for patients attributed to CPC+.

In the CPC+ Initiative, the Innovation Center intentionally shifted away from incentives based on shared savings measured at the regional level to incentive payments focused on quality and utilization measures that are calculated at the practice level and are actionable for primary care practices. The initiative aims to make available cost and utilization data at the practice and member levels to all participating practices at regular intervals. This is consistent with MACRA, which calls for quality and utilization to be measured for each clinician participating in MIPS.

Both tracks of CPC+ will require use of certified electronic health record technology (CEHRT), reflecting the Administration’s ongoing emphasis on EHR usage as a tool to advance payment and delivery system reform efforts. In addition, practices in both tracks of CPC+ will be required to annually report electronic clinical quality measures (eCQMs) and patient experience of care measures (Consumer Assessment of Healthcare Providers and Systems, or CAHPS). In future years, practices in Track 2 may also use a patient-reported outcome measure survey.

Basics of Track 1

Practices participating in Track 1 will continue to receive fee-for-service payments, as well as a performance-based incentive payment from Medicare of $2.50 per beneficiary per month (PBPM) based on practice performance on utilization metrics and quality, measured at the practice level. Incentive payments will be paid at the beginning of the year, but CMS will claw back all or part of the incentive payments if practices do not meet thresholds for quality and utilization performance.

In addition, CMS and other CPC+ payers will provide prospective monthly care management fees (CMFs) to practices based on beneficiary risk tiers. For practices in Track 1, the CMF will average $15 PBPM across 4 risk tiers.

Care delivery activities under Track 1 must include:

  • Assignment of patients to a provider panel
  • 24/7 access for patients
  • Support of quality improvement activities

Basics of Track 2

For practices participating in Track 2, CMS is introducing the Comprehensive Primary Care Payment (CPCP). Track 2 practices will receive a percentage of expected Evaluation & Management (E&M) claims payments for attributed beneficiaries prospectively in the form of a CPCP and reduced Medicare reimbursement for E&M claims. Non-E&M claims will be reimbursed on a FFS basis. The CPCP is intended to help give practices greater flexibility for care that is traditionally provided face-to-face, while also requiring practices to increase the breadth and depth of primary care services they offer. Practices will have the option of collecting a greater percentage of their expected E&M charges in the form of a CPCP over the five-year duration of the initiative.

Performance-based incentive payments from Medicare for Track 2 practices will be $4 PBPM. As with Track 1 practices, incentive payments will be:

  • Based on practice performance on utilization metrics and quality, measured at the practice level
  • Prospectively paid at the beginning of the year
  • Subject to recoup if practices do not meet thresholds for quality and utilization performance

The CMF for Track 2 practices will average $28 PBPM across five risk tiers.

In addition to care delivery activities required under Track 1 (assignment of patients to a provider panel, 24/7 access for patients, and support of quality improvement activities), practices in Track 2 must:

  • Develop and record care plans
  • Follow up with patients after discharge from an emergency department or hospital
  • Implement a process to connect patients to community-based resources

In addition, practices participating in Track 2 must have a letter of support from health IT vendors that outlines the vendor’s commitment to support the practice in optimizing health IT. Vendors will be required to document this commitment in a Memorandum of Understanding with CMS.

Prominent role for health care payers

Health care payers will play a critical role in the CPC+ initiative in hopes of driving payment and delivery system reform across all patient groups. In addition to Medicare FFS, other payers eligible to participate in CPC+ include commercial insurance plans, Medicare Advantage plans, Medicaid/CHIP managed care plans, Medicaid/CHIP state agencies, public employee plans, self-insured businesses and administrators of self-insured groups.

Payers’ interest in participating will determine in which regions the program will be piloted. The Innovation Center will review applications from payers and determine which regions of the country have a sufficient density of interest from payers to pilot CPC+. To participate, non-Medicare payers must commit to:

  1. Support primary care practices in Track 1 and Track 2
  2. Provide enhanced, non-visit based financial support for both Track 1 and Track 2 practices to help them provide care management, care coordination and other similar “wraparound services” to patients, regardless of payer
  3. Offer the opportunity for Track 1 and Track 2 practices to qualify for performance-based incentive payments
  4. Change the payment mechanism from fee-for-service to at least a partial alternative payment methodology for Track 2 practices
  5. Provide participating practices with practice- and member-level data on costs and utilization at regular intervals
  6. Align quality and patient experience measures with those used by CMS and other payers in the region.

Payers will have until the end of Year 1 of CPC+ to align payment, data and quality measures with CPC+ through Medicare. Non-Medicare payers are not required to use identical payment, data and quality measures as those used through Medicare, but non-Medicare payers must move away from an FFS reimbursement model.

CMS will not provide funding to non-Medicare payers who participate in CPC+. Participation in the initiative could be another tool available to non-Medicare payers to manage the risk of their enrollee populations, as well as a potential incentive for primary care practices in their networks. In addition, CMS encourages non-Medicare payers to participate because the agency says focusing on the five Comprehensive Primary Care Functions (access and continuity of care, care management, comprehensiveness and coordination of care, patient and caregiver engagement, and planned care and population health) could be a sustainable business model.


The Innovation Center on Friday, April 15, 2016, began accepting applications from payers interested in participating in CPC+; applications are due by June 1, 2016. The Innovation Center will designate regions for CPC+ based on the geographic density of interest from payers.

Practices in the identified regions may submit applications from July 15, 2016, through September 1, 2016. Practices will apply directly to the CPC+ track they are interested in joining, but CMS reserves the right to ask a practice that applied to Track 2 to instead participate in Track 1 if CMS believes the practice does not meet the requirements for Track 2. Selected practices will remain in Track 1 or Track 2 throughout the five-year initiative. In the event that more than 2,500 qualifying practices apply to each track, the Innovation Center said it would select practices based on a lottery. Both Track 1 and Track 2 will be available in all regions.

The CPC+ initiative will begin on January 1, 2017.

Anne Phelps
US Health Care Regulatory Leader
Latest conversations from Anne Phelps on Twitter

Daniel Esquibel
Senior Manager | Deloitte Advisory
Deloitte & Touche LLP

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