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Federal health officials on Monday unveiled a new primary care experiment that seeks to pay doctors for providing stepped-up services that keep patients healthy and out of the hospital, an effort they say will transform basic medical services for tens of millions of American patients.

The initiative, called CMS Primary Cares, includes five new payment options for small and large providers, allowing them to take varying levels of financial responsibility for improving care and lowering costs. It broadly seeks to change how primary care is delivered in the U.S. by rewarding doctors for improving management of patients with chronic illnesses such as diabetes and high blood pressure, and averting expensive trips to the hospital.

Health and Human Services Secretary Alex Azar called the program “an historic turning point in American health care” that is projected to enroll a quarter or more of the 44 million Americans served by traditional Medicare.


“This initiative will radically elevate the importance of primary care in American medicine,” Azar said, adding that it will “move [the nation] toward a system where providers are paid for outcomes rather than procedures, and free up doctors to focus on the patients in front of them, rather than the paperwork we send them.”

The effort to implement value-based care is a popular talking point in American medicine, but has yet to be fully implemented. This new initiative is the most sweeping attempt to date to change primary care, an area that accounts for about 3 percent of costs but influences the trajectory of illnesses that account for a much greater percentage of expenses.


Whether this experiment will induce large numbers of providers to participate, or result in significant changes, remains to be seen. Participation is voluntary, so officials will have to convince large numbers of primary care physicians that it will benefit them. They projected Monday that a quarter of primary practices will join. The federal Centers for Medicare and Medicaid Services will allow primary care practices to apply for the new programs this summer, with the goal of implementing them in 2020.

The initiative may spur physicians to increase the use of technology, telehealth services, and remote patient monitoring to deliver stepped-up care to patients. It does not expressly say that Medicare will pay providers for responding to weekend emails or text messages from chronically ill patients, or for doing online or in-home visit to address emergent problems as soon as they arise. But those are the kinds of measures health officials want to encourage primary care doctors to take.

“Providers will have greater flexibility to spend these resources how they want, allowing them to come up with innovative ways to care for patients — and receive significant savings if they keep patients healthier than expected,” Azar said.

The need for reforming America’s system of paying for health care was reinforced by recent CMS projections that U.S. spending on medical services will grow 5.5 percent annually over the next eight years, reaching nearly $6 trillion by 2027. That would equate to 19.4 percent of the nation’s total economic output.

But transforming to a value-based system of care is especially difficult because it requires setting a clear and universal definition of what value is, and then figuring out how to measure it. The task also requires adjusting for variability among providers’ populations of patients — some doctors take care of sicker patients, overall, than others — as well as differences in the size of their practices and the underlying social and economic needs of their patients.

Past attempts to reform primary care payments have generated widespread complaints from physicians who argued that the government failed to recognize the cost of collecting and reporting a wide array of new data on patients, which made it all but impossible for smaller practices to participate. For example, participation in Comprehensive Primary Care Plus required many practices to update their electronic health systems, but did not provide them with adequate funding to do so.

The new payment programs unveiled Monday create two basic pathways called Primary Care First and Direct Contracting. Here’s how they work:

Primary Care First

The model, designed for small practices, will include a monthly per-patient payment to providers to cover the total cost of caring for patients, eliminating the need to manage fluctuations in revenue. Providers would be paid a bonus for keeping patients healthy, but could lose a certain share of their practice’s revenue if they get sicker. It also creates a payment option that authorizes higher payments for practices that specialize in care of high-need patients with chronic conditions.

The program will be tested for five years and is scheduled to begin in January 2020.

“Providers will be eligible for significant payments if their patients stay healthy and at home,” said Adam Boehler, director of Medicare’s innovation institute. He said the model creates a risk that participants could lose 10 percent of their revenue, but gain as much as 50 percent, with performance to be measured based on “risk adjusted hospitalizations.”

Boehler added that doctors who earn $200,000 today could earn up to $300,000, depending on their ability to keep patients healthier.

Direct Contracting

This model is designed for larger provider organizations and serves as a replacement for a program known as Next Generation ACO (Accountable Care Organization). It includes three payment options with varying levels of financial risk.

One option allows for a provider to share financial risk with the government by receiving a fixed monthly payment for total costs or a portion of anticipated primary care costs, while another option allows a provider to take full risk for managing the monthly payment. If the practice keeps patients healthy and out of the hospital, they profit. If not, they lose money and must cover the extra costs of caring for their patients.

“It’s time that we put patients in the driver’s seat so that providers can compete for their loyalty through a combination of service, price, and overall experience,” Boehler said. “When you pay for quality outcomes, instead of volume, you transform a health care system that caters to special interests into a market-based system in which providers compete for the right to take care of each patient.”

A third option is designed to allow the provider to accept the full financial risk of caring for patients in a defined geographic region. The program is designed to focus on large organizations with experience in managing the needs of their local populations, as opposed to national providers that may deal with patients across many markets. Officials said they are still soliciting public feedback on details of the model and will seek to launch it in the middle of 2020.

  • Primary care is the heart of US health care with 50% of annual encounters. This is the person to person care all need, but it is being killed off by designs 1983 to the present and worse in the future.

    Time is the essence of primary care with regard to patients. But time is also most important from the perspective of those who delivery primary care – time with patients, with their team members, and with their family. Designs shrink each of these.

    Time with patients, with team members, and with family is mostly compromised by the financial design for primary care. Time/budget changes shrink the numbers of team members and their ability to interact, coordinate, integrate, and outreach. Time/budget changes kill higher primary care functions. Higher performing primary care needs real support, not more promises and a pittance of spending.

    AAFP and Commonwealth and others who profess to be for primary care and for basic health access – support changes that make matters worse. They still focus on outcomes – which are not in the control of those who deliver health care. Four primary care entities began the medical home focus – pushed it on CMS – and the 3 Comprehensive Primary Care demos came about – and failed times 3 (Sullivan). So now we continue to have meaningless use and more abuse.

    AAFP claims that a standard set of quality measures would help across the numerous payers – but once again – outcomes are predominantly not about us. Holding us accountable adds to the burdens on us, team members, and families.

    A doubling of primary care spending is required, from about 6% of payer spending to 12%. 50% of encounters for 6% of spending has long been a great value – but decades of poor support must end.

    Also this increase in primary care spending must not increase the costs paid to consultants and corporations – costs that force us to reduce numbers and quality of team members – and result in overload.

    This does not necessarily mean increases in the salaries of team members. It does mean that practices can hire more team members to share the load (depending upon their employer decision) and it means that more primary care team members can be in more places. Sadly the direction of the nation is for lesser revenue and higher costs of delivering care. And those who control and shape the design do not want to have increased primary care spending – because it would have to come out of their pockets. On paper and in statements, they promote more primary care spending. But in meetings that shape the spending – they oppose anything that would redirect dollars away from them.

    Primary care is closing and is more compromised in the practices most needed by most Americans – where there are half enough generalists and general specialists.

    Those who promise that training (more, special, pipeline, school, program) can fix primary care are distracting from real solutions – financial.

    Those who promise that primary care can have greater value are worse. What is more value than same or similar outcomes paid 15% less (value as outcomes/costs)? Why the focus on increasing outcomes and decreasing costs for practices least supported facing the most changes?

    What is more value that moving people from no access to some or from some access to reasonable? Obviously the designers value these practices and hospitals least.

    What is more valuable than being there in counties without a hospital – one of the fastest growing populations in the US because these counties are growing faster and more counties with higher population levels are being added?

    What is more valuable than being in a county with lowest concentrations of workforce where 40% of the nation is left behind by designs impacting small practices, rural practices, pharmacies, nursing homes, and small hospitals? These counties are also growing fastest in numbers, demand, and complexity. Studies already document declines in primary care visits and in primary care where needed.

    Family medicine is small and is shrinking as are proportions of nurse practitioners and physician assistants in family practice positions.

    Family practice positions most likely to distributed but receive the least revenue because they serve where the worst public and private insurance plans (and veterans) are concentrated. They are also most likely to see the populations with inherently lower outcomes – so they take penalties for not having certified EHR and just for caring for people in most need of care.

    Family practice is by far most likely to be found in counties lowest in concentrations of MD DO NP PA generalists and general specialists with little else as 90% of local services are in these basic services – lowest paid by design. But the design sends MD DO NP and PA away from family practice.

    Financial designs must take into account new changes, rapid changes, usual disruptions, regulatory costs, and lower productivity from the above. Higher turnover is also more costly. None of these are addressed because the focus is on value or quality or measurement or micromanagement.

    These various disruptions have been poorly studied because the primary care researcher are off doing quality improvement. Federal and foundation dollars are also distracting primary care researchers from the most needed research – to illustrate what is happening to patients, patient care, team members, and practices.

    Family medicine is most likely to be in small practices – the ones hit hardest per FTE for HITECH, MACRA, and PCMH. Turnover costs and frequency are greatest where we are. Small practices are hit hardest by the changes by design and also by the usual disruptions (Mold, Annals of FM) including changes of key personnel, billing, EHR, location, and ownership.

    Because of the above, there is no way to resolve shortages of primary care and in counties lowest in concentrations of physicians – who also suffer most with fewest health care dollars, jobs, social determinants, and outcomes – by design.

    Education designs have done the same thing, shifting billions from lower to higher concentration settings.

    Health insurance expansions have done the same thing – for insurance that does not protect you from the major financial losses that you most need insurance for.

    Access is not about insurance or previous reforms or single payer or universal care or even universal primary care. This new CMess will continue to focus on cost cutting as with changes since the 1980s. Access improvements require improvements specific to the team members who deliver the care.

    We need progress not promises from various leaders that shape health care.

    My work as a rural family physician, medical educator (professor), researcher, journal editor (Rural and Remote Health), home visitor, and medical association leader (Rural Medical Educators Group, Group on Rural Health, delegate) with 100,000 plus encounters indicates total failure.

    Most Americans must rally and those who really value health access must help organize. Otherwise most will continue to be most compromised by design along with the fewer who remain to serve them in health, education, and other areas.

  • I’m a retired health care provider. Managed care is little more than complex schemes designed by opportunists to scam the system at the expense of the patient and the provider. They’ve created a shameless middleman class that gets fatter every year managing not better healthcare for the nation, but their bureaucratic labyrinths that provide their undeserved high salaries and corporate perks that greatly drive up the cost of care. Under this new proposal a provider’s survival instincts would motivate her to shun the very sick and refer out asap any healthy patient who became chronically ill. Acute costly illnesses would create a self-serving concern that should not exist in quality care. This new elaboration flies in the face of common sense and experience. Time for a single payer system, already!

  • It sounds wonderful BUT the patient has to engaged and WANT to be healthy. I have many pts with Diabetes who say they want to be healthy and then binge drink on weekends. Oh, and they don’t take their metformin or blood pressure meds because someone told them they would interact!!
    Don’t penalize the provider for the lack of compliance from the patient.
    Also I spend hours educating my patients about their chronic dises

    • I. Don’t. Believe. You. All you’ve done is present the fantasy you carry around of who you think ill people are. Here’s hoping your victims run like hell to a doctor who doesn’t hate them this much. (Hint: “good” people that you think are pretty and nice also get ill and some of them even die!)

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