While the Patient Protection and Affordable Care Act (PPACA) is best known for the health mandate, the coming exchange marketplaces, and other major commercial changes, its other major focus is reform of the ever-growing Medicare system for the elderly and disabled.
In one reform effort aimed at Medicare, the Center for Medicare and Medicaid Innovation was set up to attempt to get the nation’s arms around the antiquated fee-for-service (FFS) systems in both safety net programs. And in a second reform effort earlier this year, CMS announced its Accountable Care Organizations (ASOs) initiative for Medicare, where providers and hospitals will team up as plan-like entities operating in the FFS system to save money and improve quality. One major criticism of the CMS approach on ACOs thus far is that the federal government is putting too many mandates on these organizations. Consequently, many forward-thinking provider organizations have passed on participating because the upside revenue is limited and downside risk is high due to the myriad of quality and other dictates. (On Thursday, the final ACO regulations were issued and CMS has backed off on some of the mandates in an attempt to entice providers to reconsider. We will address this development in the coming weeks.)
CMS and the new Innovation Center are now turning their attention to more limited experiments to shave costs and boost quality in the FFS system. Recently it announced its Comprehensive Primary Care Initiative (CPCI). CPCI is most analogous to a Patient Centered Medical Home (PCMH) program. CMS wants to start the CPCI as a demonstration project available in 5 to 7 markets. CMS is seeking to collaborate with approximately 75 practices in each market and serve up to 330,750 beneficiaries over the course of the four-year initiative. Enrollment would be voluntary. PCPs in Medicare would receive an average PMPM of $20 (risk adjusted) initially and $15 later to participate. In later years, shared savings would also be introduced.
The focus is on Medicare, but CMS hopes to team up with state Medicaid agencies to test the concept in Medicaid. It also wants to team up with payers in various lines of business to test similar approaches.
CPCI’s main goals are to:
- Have primary care practices proactively assess their patients to determine their chronic care and preventative health needs and provide appropriate and timely care
- Have primary care practices identify high-risk individuals through risk stratification and have providers intervene through case, care and disease management
- Encourage 24/7 access/availability and access to relevant patient information at all times
- Enhance patient and caregiver engagement
- Coordinate care between PCPs with other providers for each patient undergoing care
The CPCI looks more flexible and less administratively burdensome than the ACO requirements. While CMS alludes to using up to 25 quality and other measures to assess outcomes of the program, it does say that the measures are likely to be a subset of the ACO measures. There also is no downside risk to dissuade participation. CMS believes calculating savings at the practice level will be unreliable, so savings will be determined at the market level. To prevent practices from gaming the system, actual payouts will be based on quality indicators at the practice level. This seems reasonable, although it will have to be closely monitored.
In the end, if the right practices with the right technology are picked, the CPCI may be a better test of innovation than the ACO approach. If the FFS system is to remain, it seems to us that focusing in on incentives for primary care providers to case manage and provide comprehensive care is the best way to root out waste and inefficiency and promote better outcomes