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Changes in the Medicare Model

The Changing Medicare Model – CMS Primary Cares Initiative

On April 22, 2019, the U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, along with the Centers for Medicare & Medicaid Services (CMS) Administrator, Seema Verma, announced a new set of payment models known as the CMS Primary Cares Initiative. This initiative intends to transform primary care by delivering better value-based treatments to patients. By allowing primary care providers more time to spend on caring for patients, instead of adhering to antiquated administrative burdens, it can free up time for providers to perform a more individualized, preventative approach towards their patients.

The Future of U.S. Healthcare and Health Insurance

The initiative aims to deliver better care at a lower cost while allowing primary care clinicians different options in the treatment of their patients. Since primary care doctors are often the first point-of-contact many Americans experience within the American healthcare system, new methods are being tested to improve the care that these providers deliver.

One method of change is through the revenue cycle.  A new payment model called The Primary Care First (PCF) payment model aims to reward primary care practitioners for easily understood, actionable outcomes which will ultimately reduce national Medicare expenditures, as well as improve patient health outcomes and enhance the quality of care. PCF does this by providing medical practices with a basic monthly payment that simplifies the payment process and takes the focus away from the revenue cycle. Basically, this is a step away from the fee-for-service model. Instead of payment based on the number of visits or procedures doctors perform, the Centers for Medicare and Medicaid services will pay doctors on a per member per month basis in the care of individuals enrolled in Medicare.

A focus on preventative measures, such as managing high blood pressure, screening for certain types of cancers, and managing diabetes is encouraged to help reduce the frequency of hospitalizations and total cost of care. Since payment will no longer be solely-based on the number of procedures that doctors perform, it discourages unnecessary hospital treatments and services. This frees up doctors time by reducing the total number of patients and allows these providers to focus on coaching sessions, follow-up work, and other services that will ultimately keep patients out of the hospital.

Changes in Medicare 2019

This marks a very profound change in the world of American healthcare: “for years, policymakers have talked about building an American healthcare system that focuses on primary care, pays for value, and places the patient at the center. These new models represent the biggest step ever taken towards that vision,” stated HHS Secretary Alex Azar. The overall goal of these initiatives is to pay for favorable health outcomes, rather than medical procedures. More and more evidence points to the fact that a stronger primary care doctor is linked to better health outcomes, lower total costs, and higher quality of care across multiple populations and subgroups.

The U.S. Primary Care Transformation

All the payment models under this initiative will financially reward primary care practitioners based on performance-based care. The thinking goes, if overall health and quality of life is improved in patients before hospitalization occurs, there will be less of a financial impact on the American health system as a whole. The doctor’s office of the future will charge a monthly fee to insurers and this type of healthcare payment plan has been getting big endorsements from the Trump administration.

A payment plan based on a per-patient, per-month basis, instead of a payment plan based on how much care is given will help keep patients out of the hospital. Many companies – such as Iora Health – already have implemented contracts with private health insurers that mirror these initiatives and build on previous CMS programs. Companies like Iora typically work with employers or private Medicare plans in the Medicare Advantage program. The new initiative is voluntary for primary care practitioners and is set to begin in 2020. Companies that follow this model are expected to get more business from those in traditional Medicare plans, with CMS stating Monday that it’s expecting to include almost a quarter of Medicare participants in the new model (which is around 11 million people).

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