In an announcement made Monday, April 23, 2018, the Centers for Medicare and Medicaid Services (CMS) stated it is planning to launch a new pay model that would allow Medicare beneficiaries to contract directly with physicians. The program would directly pay primary care physicians that volunteer to test the approach among Medicare fee-for-service, Medicare Advantage, and Medicaid beneficiaries.
This would be a change from current law, where physicians are paid under a fee schedule in Medicare, with limits on the amount they can bill beneficiaries for services unless they opt out of Medicare and privately contract with all of their Medicare patients.
CMS is hoping that this change would have “the potential to enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures.”
The launch of this model is in response to various comments received in 2017 to a RFI on what priorities the CMS Innovation Center should pursue. As is natural in any new ideas, there are stakeholders who support the idea and stakeholders who oppose the idea.
Ascension, the nation’s largest not-for-profit health system, supported private contracting in its comments to the agency. Officials for the system said this approach would make funds available to beneficiaries upfront and allow them to directly contract for primary care and related services through a subscription payment. “This aspect of such a model would allow both a beneficiary and provider, in partnership to define what has value and create competition for such services,” the Rev. Dennis Holtschneider, chief operations officer at Ascension, said in a comment letter.
The AARP, however, slammed the proposal, saying that private contracting opens the door for doctors to pick and choose the patients or services for which they will bill Medicare. “(Current) rules prevent doctors from choosing patients based on the severity of their illness or other characteristics or charging different patients different amounts,” the group said. “These rules also reduce the likelihood of fraudulent billing, help maintain access to care for Medicare beneficiaries, and protect patients from high out-of-pocket costs.”
“HHS has made shifting our healthcare system to one that pays for value one of our top four department priorities,” said HHS Secretary Alex Azar. “Using bold, innovative models in Medicare and Medicaid is a key piece of this effort. We value stakeholder input on the new direction for the Innovation Center, and look forward to engaging on especially promising, groundbreaking ideas such as direct provider contracting.”
“We recognize that the best ideas don’t come from Washington, so it’s important that we hear from the front lines of our healthcare system about how we can improve care,” said CMS Administrator Seema Verma. “The responses from this RFI will help inform and drive our initiatives to transform the health care delivery system with the goal of improving quality of care while reducing unnecessary cost.”
Before the new model is launched, CMS is seeking additional comments through May 25, 2018, on the structure of the program.