Alternative Payment Models Proliferate

A new alternative payment model featuring public-private payer partnerships was announced last week by CMS. The Comprehensive Primary Care Plus (CPC+) model features Medicare-commercial-state health insurance plans partnerships to support the delivery of advanced primary care.


Existing alternative payment models range from pay-for-performance, to bundled payments, to accountable care organizations, to global payments.


The first model to move from voluntary to mandatory participation is the bundled payment program for joint replacements. The Comprehensive Care for Joint Replacement (CJR) model launched April 1 and includes about 800 hospitals.


Patrick Conway, principal deputy administrator for innovation and quality and chief medical officer at CMS, said April 11 at a Capitol Hill update on the alternative payment models, noted that CMS is monitoring CJR participants to minimize or eliminate unintended consequences. Possible responses to adverse outcomes include CMS’s ability to pull people out of models. (“Public-Private Payer Partnerships to Proliferate Under CMS,” HFMA Weekly News, April 15, 2016)


“We’re trying to structure this in a step-wise progress that picks up an increasing number of states, communities, and providers across the country, including ones that historically weren’t high performers but want to be high performers in a population health construct,” Conway said. (“Public-Private Payer Partnerships to Proliferate Under CMS,” HFMA Weekly News, April 15, 2016)


The U.S. healthcare system has been steadily moving toward alternative payment models in recent years. For example, Medicare announced in March that it achieved its year-end goal of making 30 percent of provider payments through value-based alternative payment models and tying 85 percent of fee-for-service payments to quality and value.


The shift has come from a broad realization that the transition to alternative payment models is ongoing, and every organization needs to learn how to participate.


Along with progress toward alternative payment models comes concern about how much traction the new models have gained, however. For example, a recent CFO survey shows that the average revenue generated by hospital-employed physicians increased 8 percent in 2015 from two years earlier. This finding seems to contradict what was expected from value-based and capitated payment models; that is, a reduction in the overall volume of physician services and hence the revenue physicians generate, one industry source noted. (“Public-Private Payer Partnerships to Proliferate Under CMS,” HFMA Weekly News, April 15, 2016)


The CPC+ Model


CPC+ is an advanced primary care medical home model that rewards value and quality by offering an innovative payment structure to support delivery of comprehensive primary care. The model will offer two tracks with different care delivery requirements and payment methodologies to meet the diverse needs of primary care practices. The model will contribute to the goals set by the Administration of having 50 percent of all Medicare fee-for-service payments made via alternative payment models by 2018. (Comprehensive Primary Care Plus (CPC+) Fact Sheet, CMS, April 11, 2016)


The CPC+ initiative will launch in January 2017, with CMS seeking proposals starting in April to begin identifying regions with high payer interest, a fact sheet said (see below for link). Practices interested in participating can submit applications between July 15 and September 1.


The CPC+ model include five key components:

  1. Access and Continuity
  2. Care Management
  3. Comprehensiveness and Coordination
  4. Patient and Caregiver Engagement, and
  5. Planned Care and Population Health

(“CMS Looks to Take Primary Care to the Next Level,” AHLA Weekly, April 15, 2016)


For the fact sheet on CPC+, please click here.



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And watch for our upcoming course, Population Health and Alternative Payment Models, featuring Marian Jennings and Dan Grauman.


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