Provisions in Health Care Reform Law Lay Out Role of Primary Care, Family Physicians

Recent passage of the Patient Protection and Affordable Care Act was only a starting point in reforming the health care system in the United States. As guidelines and regulations are developed, many health policy experts note that actual implementation of the law will not work without the ability to bend the health care cost curve. And that cannot be accomplished without a greater emphasis on prevention and primary care, making these two components essential to the ultimate success of health care reform.

The new law (906-page PDF; About PDFs) contains a number of measures designed to boost the provision of and payment for primary care services. According to analysts interviewed by AAFP News Now, implementation of these measures should lead to a greater role for primary care and family physicians in the U.S. health care system.

"We are going to need every arrow in the quiver, and primary care and prevention are two of the strongest," said Len Nichols, Ph.D., director of the Center for Health Policy Research and Ethics and professor of health policy for the College of Health and Human Services at George Mason University in Fairfax, Va. "They are the foundations on which we have to build."

The health care reform law attempts to enhance the role of primary care via a variety of mechanisms, including through higher Medicare and Medicaid payments for primary care, innovative payment models to reward value instead of volume, and a substantial investment in the primary care workforce. In January, for example, Medicare will start paying certain primary care physicians -- those for whom primary care services comprise at least 60 percent of their total Medicare services -- a 10 percent bonus for the primary care services they provide.

The Medicare bonus, which will be in effect from January 2011 to December 2015, will affect primary care physicians differently depending on the percentage of Medicare patients they see. A primary care physician who meets eligibility requirements and receives 25 percent of practice payments from Medicare could experience an increase of $2,000 a year for the next five years as a result of the bonus, said Robert Phillips, M.D., M.S.P.H., director of the AAFP's Robert Graham Center, the health policy research arm of the Academy.

The health care reform law also will increase Medicaid payments for primary care services, bringing them up to the same level as Medicare payments in 2013 and 2014. That provision will affect primary care physicians differently depending on the state in which they live, said Phillips. In North Carolina, for example, the state currently pays physicians in the Medicaid program 95 percent of the Medicare rate, meaning the Medicaid enhancement in the health care reform bill law will have only a minimal impact on the states' physicians. In contrast, California only pays Medicaid physicians about half of the Medicare rate, so the Medicaid enhancement will have a much greater effect in that state, said Phillips.

In a larger sense, the health care reform law attempts to move the country toward a more primary care-based system by supporting the value of prevention and care coordination. For example, as of Sept. 23, individual and new group health plans must cover certain preventive services and immunizations without patient cost-sharing measures, such as copays and deductibles. The specific preventive services and immunizations involved are expected to be identified by federal regulations.

Although the insurance industry says physicians will not have to pick up the cost-sharing amounts for these services, it is not altogether clear whether that will be the case, said Kavita Patel, M.D., director of the health policy program for the New America Foundation, a nonprofit, nonpartisan public policy institute based in Washington.

"I think it is going to be our job to make sure that doesn't happen," said Patel, a former director of policy in the Obama White House's Office of Intergovernmental Affairs and Public Engagement.

In 2011, Medicare also will eliminate copays and deductibles for most preventive services and recommended immunizations, costs that will be picked up by the Medicare program, according to Patel.

"I know in talking with the leadership at Medicare about this, that the intention was to make sure physicians were not on the hook for this," said Patel. "That this was going to come out of CMS dollars."

The health care reform legislation also seeks to change the way health care is financed and delivered by moving away from the current fee-for-service or volume-based system to one based on value and a pay-for-performance approach. For example, the law creates a CMS Innovation Center in 2011 to develop innovative health care and delivery models that slow cost growth in the Medicare and Medicaid programs, as well as in the Children's Health Insurance Program.

In this capacity, the innovation center will test variants of accountable care organizations, patient-centered medical homes and the bundling of payments, said Nichols.

"There is a lot of what I would call open-ended experimentation with realigning incentives so that clinicians will be rewarded not for volume as they are now, but for value as defined by the market place and the government," Nichols said.

This realignment, in turn, will lead to a much greater emphasis on quality as measured by outcomes and processes; cost efficiency and resource use relative to benchmarks and standards; and patient experience, he explained.

"All three dimensions -- technical quality, resource use and patient experience -- will be part of the value that is rewarded," Nichols said.

He acknowledged that the innovation center will test the models on a pilot basis, but, as he pointed out, "we need to walk before we can run."

"We can't change the whole country overnight on a theory," he said.

The law also establishes a 15-member Independent Payment Advisory Board, or IPAB, in 2014 to make annual recommendations to Congress and the president on altering Medicare payment if Medicare spending is projected to exceed certain targets. By law, the board cannot submit proposals that would ration care or change benefits, and its recommendations would become law if Congress failed to find ways to achieve equal savings. In the process, the IPAB could become a catalyst for making fundamental changes throughout the Medicare program in a relatively short time frame, Nichols said.

"IPAB makes it possible to take a good idea and spread it fast," he noted.

In the meantime, the new law makes several references to medical homes and health care homes, sending a message that "this is an important and promising model and one that deserves further testing," said Melinda Abrams, M.S., assistant vice president at The Commonwealth Fund and director of the organization's patient-centered coordinated care program.

In 2011, the law creates a new Medicaid state plan option to allow Medicaid beneficiaries with at least two chronic conditions, one condition and the risk of developing another, or at least one serious and persistent mental health condition to designate a provider as a "health home." Under the law, the federal government would provide an enhanced federal match for two years to help states pay for the services associated with the health home.

By adding millions of patients to the health care rolls, the new law also will place a greater demand on primary care physicians, thus creating a need for a more robust primary care workforce. Consequently, the law provides $11 billion more in dedicated funding for community health centers and $1.5 billion in dedicated funding for the National Health Service Corps from 2011 to 2015. It also reauthorizes Section 747 of Title VII of the Public Health Service Act, the only federal program that provides funds to academic departments of family medicine and family medicine residency programs to increase training of family physicians.

"We are hoping that these investments will start to shift the curve back to primary care over time," said Patel. "If we can't get a really robust primary care workforce, reform will not be successful.

"That's going to be a theme you are going to hear over the next several years."