Washington -- Medicare will partner with private insurers to offer physicians patient management fees and the opportunity to share savings under a primary care payment initiative led by the Centers for Medicare & Medicaid Services.

The Comprehensive Primary Care Initiative is a new collaboration between public and private payers to strengthen primary care, CMS officials said during a Sept. 28 news conference. The Center for Medicare & Medicaid Innovation is inviting insurers to join government health plans in trying a new approach to paying for primary care starting in 2012.

"We believe that if we can give primary care clinicians the time and resources to take care of their patients and coordinate their care across the spectrum, in the end we'll get happier and healthier patients," said Richard Gilfillan, MD, acting director of the innovation center. "We know we'll get providers who feel more fulfilled. And we know over time we'll improve overall costs of the system and make the system more sustainable."

The initiative is designed to enhance the work being done by payers who have developed innovative models to pay for coordinated care and higher quality services, such as the patient-centered medical home. The Medicare agency wants to pay more for outpatient services that keep patients healthier and prevent costlier inpatient care. For instance, care coordination in the Community Care of North Carolina program, which initially launched as a Medicaid medical home project, has been able to lower preventable hospitalizations significantly for patients with chronic conditions, according to CMS.

Once the participating private payers are selected, interested physician practices will be asked to apply through CMS to participate. CMS will require practices to provide comprehensive primary care services to Medicare patients and to those with coverage from a participating payer. Preference will be given to practices that have achieved meaningful use of an electronic medical record system, according to the application materials.

Practices will receive patient management fees to pay for the new health care delivery methods, said Richard Baron, MD, director of the Seamless Care Models Group at the innovation center. This fee is expected to average about $20 per month for each patient covered by one of the participating payers. CMS also will provide practices with patient and resource use data so patients have more information on the quality of their care and their physicians' performance. Any savings that might be generated for the Medicare program would be shared with the practices.

Federal antitrust laws still will apply, so payers will be prevented from coordinating with one another on what they pay for management fees.

Trying to transform primary care

CMS plans to select up to seven areas of the U.S. to participate in the demonstration, which will launch in the summer of 2012. Each market will include about 75 practices caring for roughly 300,000 Medicare or Medicaid patients over four years. Those participating in the initiative can't participate in other shared savings initiatives, such as the forthcoming Medicare accountable care organization program.

The American Medical Association was pleased to see that the announcement includes a physician-led model of care, upfront financial resources and participation by private health insurers, said AMA President Peter W. Carmel, MD. He said the initiative represents an exciting opportunity for physicians that will transform care at the local level.

"Physicians want to deliver coordinated, cost-effective care that improves patient outcomes, but the current payment system often penalizes the valuable services that make these improvements possible," Dr. Carmel said. "By providing a monthly care management fee for Medicare patients, [the innovation center] is recognizing the full scope of work done by physician practices to improve the health of their patients."

Until recently, the Medicare program had been absent from patient-centered medical home payment models, said Yul Ejnes, MD, chair of the American College of Physicians Board of Regents. Dr. Ejnes has had only one payer support the medical home at his practice, Coastal Medical Inc., in Rhode Island.

Dr. Ejnes said if his area of the country is selected to participate in the Medicare-led demo, it would mean that more payers would start supporting medical homes and more practices would be encouraged to adopt the patient-centered model, he said.

Some physicians have been waiting for payers to fund high-value primary care models rather than take the risk of transforming their practices without support for different payment models, said Glen Stream, MD, president of the American Academy of Family Physicians. Dr. Stream sees the point of the new program as bringing the funding to the practice so it can make the enhancements necessary to become a patient-centered medical home.

"We're confident this initiative will further demonstrate that patient outcomes improve and costs are saved when the health care system values primary care by paying for all the services family physicians provide to their patients," he said.

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