News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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The trend toward alternative payment systems continues as CMS announces the Comprehensive Primary Care Plus (CPC+) model

Efforts by Medicare officials to move providers away from fee-for-service payments and onto other models of reimbursement continue to move forward. This is one of several goals for a new primary care program that Medicare is about to launch in coming months.

Medical laboratories and pathology groups might feel an impact from this new program the Centers for Medicare and Medicaid Services (CMS) is testing. Announced in April, 2016, the program is called Comprehensive Primary Care Plus (CPC+). The CPC+ program is a five-year model that is designed to strengthen primary care, through establishing what are called “medical homes,” where patients experience more coordinated care.

CMS accepted applications for CPC+ through September 1, 2016. Fourteen regions were selected nationwide to participate. They include:

• Arkansas: Statewide

• Colorado: Statewide

• Hawaii: Statewide

• Kansas and Missouri: Greater Kansas City Region

• Michigan: Statewide

• Montana: Statewide

• New Jersey: Statewide

• New York: North Hudson-Capital Region

• Ohio: Statewide and Northern Kentucky Region

• Oklahoma: Statewide

• Oregon: Statewide

• Pennsylvania: Greater Philadelphia Region

• Tennessee: Statewide

“As a key part of CPC+, CMS and partner payers are committed to supporting primary care practices of all sizes, including small, independent, and rural practices,” said Patrick Conway, MD, MSc, CMS Deputy Administrator and Chief Medical Officer, in a CMS statement. “We see CPC+ as the future of primary care in the US and are pleased to partner with payers across the country that are aligned in this mission to transform our healthcare system. This model allows primary care practices to focus on what they care about most—serving their patients’ needs when and how they choose.”

Two Tracks from which to Choose

The program will offer participating practices a choice of two tracks:

• Track 1 includes a monthly payment, called a care management fee, as well as fee-for-service payments for activities listed in the Medicare Physician Fee Schedule.

• Track 2 supports practices that are working to deliver more nontraditional care (such as telemedicine) outside of face-to-face office visits by offering a hybrid payment. Practices will receive the monthly care-management fee, along with reduced Medicare fee-for-service payments and up-front payments for those services.

In addition, practices on both tracks will receive incentive payments up-front. However, those incentives may have to be paid back—depending on performance—according to metrics designed to measure quality and utilization. According to another CMS announcement, “The payments under this model encourage doctors to focus on health outcomes rather than the volume of visits or tests.”

In order for this primary care model to work, there will need to be interest and participation from payers, such as commercial and state insurance plans. CMS selected specific regions to roll out the model, chosen in part because of interest from payers. The payer partners entered a Memorandum of Understanding (MOU) with CMS, “to document a shared commitment to align on payment, data sharing, and quality metrics in CPC+,” according to the CMS announcement.

Primary Care Business Practice and Clinical Laboratories

Ready or not, the change in payment structure is coming, and more quickly than many imagined. On March 3, 2016, the US Department of Health and Human Services (HHS) announced, “an estimated 30 percent of Medicare payments are now tied to alternative payment models that reward the quality of care over quantity of services provided to beneficiaries,” adding that it has “achieved that goal well ahead of schedule.”

The push towards alternative payment models is a result of the Affordable Care Act (ACA) and the formation of Accountable Care Organizations (ACOs). In the HHS news release Conway stated, “We reached this goal in partnership with the thousands of providers who collaborated with us in innovation.” The alternative payment model is not confined to Medicare, either. Many other organizations, including commercial insurance companies, health systems, and employers are looking to alternative payment models to save costs and provide more individualized care.

CPC+ Follows Earlier CPC Effort

The CPC+ model is a follow up to the Comprehensive Primary Care (CPC) initiative, which was launched in 2012. CMS described it as “a four-year multi-payer initiative designed to strengthen primary care.” CPC was rolled out in seven regions, and offered “population-based care management fees and shared savings opportunities to participating primary care practices.”

Marci Nielsen, PhD, MPH

In an announcement, Marci Nielsen, PhD, MPH (above), CEO of the Patient-Centered Primary Care Collaborative (PCPCC), noted, “Today, the US Centers for Medicare and Medicaid Services announced the 14 regions that will participate in the Comprehensive Primary Care Plus (CPC+) Initiative, the largest-ever initiative to transform and improve how primary care is delivered and paid for in America.” (Photo and caption copyright: Patient-Centered Primary Care Collaborative.)

While CMS touts the savings and improved care brought about through the CPC initiative, others are less sure it was a successful model. A January 2015 report by Mathematica Policy Research that examined how the program was functioning elicited mixed reviews from experts. For example, David Nash, MD, MBA, Dean of Thomas Jefferson University’s School of Population Health, questioned the program in an article published by Kaiser Health News, asking, “As a taxpayer—are we really making a difference? I can’t tell from this report.”

However, others were more supportive. In the same article, Marci Nielsen, PhD, MPH, CEO of the Patient-Centered Primary Care Collaborative (PCPCC), said, “The numbers don’t take your breath away, but the fact that the early results look as good as they do we take to be very good news.”

Clinical Laboratories Face Change, Find Opportunities

Because primary care doctors order a great many tests for their patients, the way in which they do business can impact medical laboratories as well. The shift from a fee-for-service system for treating Medicare patients toward alternative payment models, such as CPC+, represents a sea-change in the way primary care physicians get reimbursed. It can be expected that clinical laboratories serving patient-centered medical homes could eventually be paid differently than fee-for-service for tests originated by medical homes.

A CMS fact sheet states, “CPC+ integrates many lessons learned from CPC, including insights on practice readiness, the progression of care delivery redesign, actionable performance-based incentives, necessary health information technology, and claims data sharing with practices.” Thus, clinical labs, like all other stakeholders in the healthcare industry, face a period of upheaval and change, but perhaps the end result will be improved patient care and a more coordinated business model.

Partnerships with device manufacturers, and the possibility of finding ways to help doctors monitor and assess the health of patients outside of the traditional office visit, are just two opportunities that could be important as medical lab executives respond to both new models of primary care and new payment methods. The CPC+ initiative is designed to encourage collaboration among clinicians, and the medical laboratory has an important role within the care team.

—Dava Stewart

Related Information:

CMS Launches Largest-Ever Multi-Payer Initiative to Improve Primary Care in America

CMS Announces Next Phase in Largest-Ever Initiative to Improve Primary Care in America

CMS Announces Additional Opportunities for Clinicians to Join Innovative Care Approaches Under the Quality Payment Program

HHS Reaches Goal of Tying 30 Percent of Medicare Payments to Quality Ahead of Schedule

Comprehensive Primary Care Initiative

Evaluation of the Comprehensive Primary Care Initiative: First Annual Report

Mixed Results for Obamacare Tests in Primary-Care Innovation

PCPCC Pleased by Federal Announcement of 14 Regions Selected to Participate in Comprehensive Primary Care Plus Initiative

Medicare Moves Forward with Bundled Payment Reimbursement as Part of a Trend That Has Major Ramifications for Clinical Pathology Laboratories

New Medicare Program Bases Reimbursement for Hip and Knee Replacements on Value-Based Criteria, Now in 67 Regional Markets

Nearly One-Third of Traditional Medicare Payments Now Based on Value-Based Reimbursement and Alternative Payment Models