CMS Building In the past, CMSpayment reforms have led to similar changes among payers andinsurers in the private sector, and many industry groups praisedthe new initiative as a positive step.

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The federal government took a major step in promoting value-based care (VBC) this week as U.S. Healthand Human Services Secretary Alex Azar announced the Primary Care Initiative, which will giveproviders more flexibility and financial incentives to coordinatecare for patients.

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The April 22 announcement took place at the offices of theAmerican Medical Association (AMA), which had gathered more than200 medical society representatives to discuss primary care issues.Azar, whose department runs the Centers for Medicare and Medicaidservices (CMS), was joined at the announcement by CMS AdministratorSeema Verma and Adam Boehler, director of the Center for Medicareand Medicaid Innovation (CMMI).

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Related: More patients seeing NPs and PAs for primary careneeds

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“For years, policymakers have talked about building an Americanhealth care system that focuses on primary care, pays for value,and places the patient at the center. These new models representthe biggest step ever taken toward that vision,” Azar said.“Building on the experience of previous models and ideas of pastadministrations, these models will test out paying for health andoutcomes rather than procedures on a much larger scale than everbefore. These models can serve as an inflection point forvalue-based transformation of our health care system, and Americanpatients and providers will be the first ones to benefit.”

Rewarding good outcomes

Promoters of VBC have been calling for payment reform as acrucial step in moving away from the old fee-for-service model. Thenew CMS initiative has multiple models to reward providers foremphasizing quality over quantity when it comes to health caredelivery.

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The first two models are called Primary Care First and aredesigned for smaller practices. This approach will featureperformance-based payment and will seek to reduce hospitalizationsand manage patients with chronic conditions through their primarycare providers. Providers will take on more risk with patientsunder these models, but will be eligible for additional payments iftheir patients stay healthy. These models will be tested for fiveyears beginning in January 2020.

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In addition, the initiative will feature three Direct Contracting (DC) models, which aredesigned for larger health systems, and will also feature risksharing between CMS and providers. “The payment model optionsavailable under DC create opportunities for a broad range oforganizations to participate with CMS in testing the next evolutionof risk-sharing arrangements to produce value and high qualityhealth care,” a CMS release said.

Blazing a trail

In the past, CMS payment reforms have led to similar changesamong payers and insurers in the private sector, and many industrygroups praised the new initiative as a positive step.

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“One of the most encouraging aspects of the announcement todayis the emphasis on the patients who account for the greatestproportion of healthcare costs, those with serious illnesses andmultiple chronic conditions,” said Mary Grealy, president of theHealthcare Leadership Council. “We stronglysupport the continued movement toward coordinated care for thispatient population and the new payment models' incentives forproviders to treat these high-need patients.”

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Gerald Harmon, MD, immediate past chair of the board of trusteesfor the AMA, said the CMS program would give much-needed support tothe nation's primary care physicians. “Many primary carephysicians have been struggling to deliver the care their patientsneed and to financially sustain their practices under currentMedicare payments,” he said. “The new primary care payment modelsannounced today will provide practices with more resources and moreflexibility to deliver the highest-quality care to theirpatients.”

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