New CMMI Direct-Contracting Pay Models Will Overhaul Fee-for-Service Models

The Centers for Medicare and Medicaid Innovation (CMMI) is introducing new pay models that will shift primary care from fee-for-service payments to a global fee model under which clinicians and hospitals could assume varying amounts of risk. The first model offers small primary care practices two options that come with a flat monthly fee per patient. Bonuses and penalties will depend on the practices’ ability to keep their patients healthy and home. Larger practices and health systems will have additional choices that could result in higher payments but pose steeper risks. These include the professional option, under which providers assume 50 percent of the risk, including savings and losses, and the global option, under which providers take on full risk. There will also be a geographic option under which health systems and insurance plans could assume the risk for the total cost of primary care for communities within a particular region. All of the models, which are voluntary, will launch in January 2020 except the geographic option that is projected to begin in mid-2020.

According to Health and Human Services Secretary Alex Azar, the model will have providers competing for beneficiaries, thus motivating physicians and clinicians to keep patients happy enough to remain under their care. In addition, quality measures within Medicare will deter physicians or hospitals from preventing necessary hospitalizations.