Medicare Initiatives

by Paul Katz (Adira Technology).

Innovation in the Medicare Program from the Centers for Medicare & Medicaid Services (CMS) is good.  As the largest payor of healthcare services in the United States, their initiatives to help providers and payers to become more effective impacts everyone. 

Two of the newest proposals for the Fee for Service Medicare program are Primary Care First and Direct Contracting.  Neither program has been defined in detail by CMS and their Center for Medicare & Medicaid Innovation (CMMI) but there are conclusions that can be drawn from what we know so far.

Primary Care First is the next iteration of the Comprehensive Primary Care Plus (CPC+) program.  CPC+ was structured to provide primary care physicians with a monthly case management fee (in addition to the per visit fees) educational programs, and better information to help them become more effective at managing their patients.  This is a great goal and necessary given that Medicare Fee-For-Service beneficiaries are among a shrinking number of insured that can still go see any physician in almost any specialty at any time they want.  This freedom to wonder among physicians and other healthcare providers at-will can result in higher costs, poor quality, overmedication, and unnecessary care.

The Medicare Shared Savings Program (MSSP) and the Pioneer Accountable Care Program were the first initiatives within CMS and CMMI to attempt to improve care management in fee-for-service Medicare.  Intelligent Healthcare (my health care analytics company) compared early utilization and cost results of MSSP Medicare fee-for-service patients and Medicare Advantage capitated/delegated patients cared for by the same network of primary care physicians in Southern California.  The comparison found that patients in Medicare Fee-For-Service despite having similar risk profiles have higher emergency room utilization, higher hospital utilization, higher readmission rates, and see many more physicians and other providers then those patients in Medicare Advantage. 

Primary Care First is adding some downside risk to participating physicians for what CMS calls the actual-to-expected hospital utilization, and the possibility of earning incentive payments when compared to the same results for their peers.  Both the downside risk and additional incentive payments draw on calculations made exclusively by CMS and their contractors, including how they determine physician peers. These determinations are also risk adjusted using the Health & Human Services (HHS) Hierarchical Category Codes (HCCs).

Downside risk and upside incentive payments in MSSP and the Next Generation ACO Program (NextGen) are based on benchmarks set by CMS.  CMS and CMMI’s processes to set benchmarks used to determine incentive payments and downside risk seem intentionally opaque, and experts that have looked at them have concluded that the benchmark methodology is not truly reflective of the actual savings and losses to the Medicare Program (see Chernew ME, Barbey C, McWilliams JM. Savings Reported by CMS Do Not Measure True ACO Savings.  Health Affairs Blog. June 19, 2017).  CMS is proposing to apply a similar benchmark methodology to Primary Care First.

CMMI has published results for CPC+ showing that appropriate follow up care after hospital discharge is improving for CPC+ patients.  However, they have not yet shown that hospital utilization rates have improved among the Medicare patients tracked under CPC+. Maybe CMS will clarify this soon, since they intend to start Primary Care First in 2020. 

CMMI will provide updates for the program on their website at (

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