Beginning in January 2017, primary care physicians and their practices (PCPs)  will be able to participate in a multi-payer payment reform and care delivery transformation aimed at strengthening primary care. Dubbed the Comprehensive Primary Care Plus (CPC+) initiative, the recently unveiled primary care medical home model is CMS’s latest effort to encourage value-based payment methodology, with an aim towards promoting health and reducing overall health care costs.

In an effort to encourage PCP participation in the voluntary initiative, the two-track CPC+ model revises existing Medicare payment structures and introduces the concept of a Medicare Care Management Fee (MCMF). In track one, PCPs will receive traditional Medicare fee-for-service payments for services rendered, as well as an MCMF of $15 per Medicare beneficiary per month. Additionally, track one participants will be eligible for a performance-based incentive payment of up to $2.50 per beneficiary per month, which is tied to clinical quality/patient experience and utilization measures that drive total cost of care.

In track two, PCPs will be reimbursed under a hybrid model that combines the traditional Medicare fee-for-service with a percentage of the PCP’s expected evaluation and management reimbursements, which will be paid upfront in the form of a Comprehensive Primary Care Payment (CPCP). In addition to payment under this hybrid model, track two PCPs will receive an MCMF of $28 per Medicare beneficiary per month, including an additional $100 for each beneficiary with certain “complex needs.” Like track one participants, track two participants are eligible for a performance-based incentive payment, but at the slightly higher rate of $4.00 per beneficiary per month.  More details on the two tracks can be located here.

CMS believes that the new model makes a “persuasive business case[] for practices to participate in the CPC+ model and choose the track that best meets their needs.” To support this contention, CMS calculates the average payments that a PCP participating in CPC+ can expect to receive (assuming a practice beneficiary pool of 700 people, which CMS explains was the average size of participating practices in a previous version of the CPC model).

With respect to track one, CMS’s calculations reveal that a participating PCP will receive $10,500 monthly ($126,000 annually) in MCMF fees. CMS predicts that PCPs will be “guided by the care delivery expectations to invest these funds into practice transformation” efforts. These practice transformation efforts will “support the sort of care and management that will increase [the] likelihood of practice eligibility for incentives that could reach $21,000 annually.”

With respect to track two, again assuming a practice size of 700 beneficiaries, CMS’s calculations reveal that a participating PCP will receive $19,600 monthly ($235,200 annually) in MCMF fees and performance-based incentives that could reach $33,600 annually. Also, because of the partially capitated, partially fee-for-service nature of the track two model, CMS anticipates that PCPs will be more willing to furnish services “in a way that best meets the needs of the patient, whether that be by email, phone, patient portal, etc.,” since the cost of such services is essentially built into the capitated quarterly payment. CMS indicates that it will test several different percentage breakdowns in order to determine the best mix of capitated and fee-for-service payments.

Whether the CPC+ initiative will draw widespread interest from PCPs remains to be seen. In a statement on its website, the American Academy of Family Physicians (AAFP) sounded at least open to considering the initiative, referencing CMS’s claim that the new model was “designed to provide physicians the freedom to care for their patients in a way they think will deliver the best outcomes and to pay them for achieving results and improving care.” Nonetheless, the AAFP stopped short of endorsing the measure, writing that it is “working now to understand this new CPC+ model and will share more information soon.” In any event, CMS’s business case for the CPC+ initiative is likely to draw interest from at least some PCPs, particularly those with sophisticated telemedicine and electronic health record (EHR) platforms.

While CMS’s development of the CPC+ initiative would be noteworthy on its own, the participation of private payors should draw the attention of providers interested in maximizing reimbursement for services rendered to patients. On April 15, 2016 CMS began accepting applications for private payors to join the CPC+ initiative, and the geographic mix of chosen private payors will help inform the 20 regions ultimately selected to participate in the CPC+ model. Applications for interested PCPs will be accepted beginning July 15, 2016, with CMS encouraging PCPs that are further along in the delivery of value-based care to apply for participation under track two.

The CPC+ initiative is simply the latest example of the federal government’s efforts to drive quality, cost-effective health care by utilizing value-based payment methodologies. As with all reimbursement models, physicians should assess whether their practice organizations are in a position to avail themselves of the benefits of—and navigate the challenges associated with—the CPC+ reimbursement model for PCPs.