Initiative Will Use Blended Payment Model to Drive Health Care Transformation

AAFP Supports Increased Focus on Family Physician Patient Care

September 28, 2011 06:35 pm News Staff

The AAFP has long urged public and private payers to adopt a blended payment model that rewards primary care physicians for coordinating and managing patient care. Now, CMS and its Center for Medicare and Medicaid Innovation, or CMMI, have joined the movement with the launch of a new initiative -- the Comprehensive Primary Care initiative( The initiative will allow CMS to work with commercial and state health insurance plans to support primary care practices that deliver coordinated and seamless care based on the tenets of the patient-centered medical home, or PCMH.

"The AAFP applauds the Comprehensive Primary Care initiative announced by the Center for Medicare and Medicaid Innovation," said AAFP President Glen Stream, M.D., of Spokane, Wash., in a prepared statement. "This program is an important breakthrough in reforming our health care policy -- focusing our system on patients' needs, ensuring their access to primary care and helping control the cost of health services."

The voluntary initiative will begin as a demonstration project in five to seven health care markets across the country with about 75 primary care medical home practices participating in each market. In the selected markets, CMS and its partners will enroll participating practices in the initiative. The agency will pay these practices based on a blended payment model that combines fee-for-service with a per-patient, per-month care coordination fee ranging from $8 to $40. Participating practices also have an opportunity to participate in shared savings from the project.

To qualify to participate, practices have to meet several criteria, including the use of an electronic health record system or an electronic registry. In addition, they must serve as the first point of contact for patients while also providing ongoing care. Participating practices also are required to have at least 60 percent of their revenues generated by payers participating in the initiative.

"Too often today, we penalize primary care professionals for spending time with patients, for going over test results on the phone, or sitting down to create a plan to help a patient lose weight or manage their cholesterol," said HHS Secretary Kathleen Sebelius during a Sept. 28 press call announcing the new initiative. "Under the new program, that will change."

Story Highlights

  • CMS is launching a new initiative that will support primary care practices that deliver coordinated and seamless care by enlisting public and private payers to initiate a blended payment system.
  • The AAFP, which has long called for such a blended payment model, is praising the Comprehensive Primary Care Initiative as an important breakthrough in reforming the nation's health care policy.
  • The new initiative "will further demonstrate that patient outcomes improve and costs are saved when the health care system values primary care," said AAFP President Glen Stream, M.D., M.B.I.

Richard Baron, M.D., director of the seamless care models group in the CMMI, said during the call that CMS will request a letter of intent from insurers on Nov. 15 and will require a formal application by Jan. 17. "We will then convene community-level conversations with aligned payers, representatives of practices and consumer representatives to describe specifics of community strategy and alignment around quality measures," said Baron. CMS also will discuss implementation measures and the strategy for soliciting participating practices during these meetings.

CMS plans to launch the initiative with participating practices next summer.

According to Baron, one of the major goals of the initiative is to drive practice transformation. "What we are hoping for in launching this initiative is for the private sector to join CMS in designing new models that are aligned in a way that will accelerate and powerfully drive practice transformation."

He also called for a payment model that supports primary care in a way that promotes practice transformation. "The way CMS does payment now, and the way many insurers do it in the country now, is to pay for primary care in a fee-for-service payment system where the only thing that is paid for are (physician) visits," said Baron.

Stream noted that the PCMH can meet practice transformation goals because it "coordinates all the health services a patient may need -- be it preventive care; diagnosis and treatment of acute illness; or management of a complex, chronic condition." However, he added, "This way of providing care requires large investments in electronic health records; redesigned medical offices; and committed time for communication with subspecialists, pharmacists, hospitals, home care agencies and therapists.

"These services are vital to ensuring that patients get the right care from the right professional at the right time," said Stream. "But they have never been acknowledged in the way we pay for medical services. The blended payment approach in this initiative will correct this misaligned system."

Stream also said the new initiative "will further demonstrate that patient outcomes improve and costs are saved when a health care system values primary care by paying for all the services family physicians provide to their patients."