Pathways to Successful Value-Based Transformation: A Focus on Value-Based Primary Care

Last Updated: Oct 30, 2019

By Sharon A. DeSantis, PAMED Practice Support Specialist

physician-eldery-woman-examIn April 2019, the Centers for Medicare and Medicaid Services (CMS) announced a set of alternative approaches designed to reward primary care practices for patients’ health outcomes rather than procedures.

The CMS Primary Cares Initiative, which has a five-year performance period, is voluntary and offers providers five new value-based payment model options under two paths:

  1. Primary Care First (PCF)
  2. Direct Contracting (DC)

The two payment models offered under the PCF track are aimed at individual primary care practices, while the DC model options are aimed at larger practices, health systems, and other organizations that have experience with risk-based contracts. All of the new model options link performance to payments of varying degrees.

In response to input from primary care clinician stakeholders, PCF is based on the underlying principles of the existing Comprehensive Primary Care Plus (CPC+) model design: prioritizing the doctor-patient relationship; enhancing care for patients with complex chronic needs and high-need, seriously ill patients; reducing administrative burden; and focusing financial rewards on improved health outcomes.

When will the models begin and who will be affected?

The start date for PCF models was originally scheduled for 2020. However, the start date has been delayed until January 2021. CMS said that the reason for the delay was to give stakeholders more time to consider participation and to help practices prepare by giving them additional time to move away from fee-for-service.

PCF models are offered in 26 regions across the country. In Pennsylvania, the model is only offered in the Greater Philadelphia region: Bucks, Chester, Delaware, Montgomery, and Philadelphia counties. Each practice applicant must identify eligible practitioners by their National Provider Identifier (NPI) on its application. Eligible practitioners are those in internal medicine, general medicine, geriatric medicine, family medicine, and/or hospice and palliative medicine. CMS may reject an application based on the results of a program integrity screening.

CMS has posted a PCF request for information online here. Practice applications are currently open and close on Jan. 22, 2020. Eligible practices, including those in the Greater Philadelphia region, can apply via this application portal.

Payer solicitations for PCF will be conducted from Dec. 9 2019 through March 13, 2020.

The payment model options available under DC will start in January 2020 with an initial alignment year for organizations that want to align beneficiaries to meet the minimum beneficiary requirements. Performance periods for DC will begin January 2021 and will be five years.

Although the models are voluntary, CMS expects more than 25 percent of all Medicare fee-for-service beneficiaries will be included, which translates to nearly 11 million people.


physician-patient-conversationPCF will provide payment to practices through a simplified total monthly payment. This will allow clinicians to focus on caring for patients rather than their revenue cycle through population-based payments and flat primary care visit fees, or capitation. PCF also includes a payment model option that provides the opportunity for higher payments to practices that specialize in care for high-need patients, including those with complex, chronic needs and seriously ill populations (SIP), through performance-based adjustments based on key performance measures.

Two models under PCF

The PCF models include:

  1. PCF General — Introducing new, higher payments for practices caring for complex, chronically ill beneficiaries
  2. PCF High-Need Populations — Encouraging practices to take responsibility for seriously ill beneficiaries who currently lack a primary care practitioner and/or effective care coordination

Both models under PCF incentivize providers to reduce hospital utilization and total cost of care by potentially significantly rewarding them through payment adjustments based on their performance. These models seek to improve quality of care, specifically patients’ experiences of care and key outcome-based clinical quality measures, which may include controlling high blood pressure, managing diabetes mellitus, and screening for colorectal cancer.

Who can participate in the PCF General payment model option?

  • Primary care practitioners (MD, DO, CNS, NP, PA) in good standing with CMS and located in one of the PCF regions
  • Those providing health services to a minimum of 125 attributed Medicare beneficiaries*
  • Those providing primary care services which account for the predominant share (i.e., 70 to 80 percent) of the practices’ collective billing based on revenue*
  • Must have experience with value-based payment arrangements or payments based on cost, quality, and/or utilization performance such as shared savings, performance-based incentive payments, and episode-based payments, and/or alternative fee-for-service payments such as full or partial capitation
  • Use 2015 Edition Certified Electronic Health Record Technology (CEHRT), support data exchange with other providers and health systems via Application Programming Interface (API), and connect to their regional health information exchange (HIE)
  • Attest via questions in the Practice Application to a limited set of advanced primary care delivery capabilities, including 24/7 access to a practitioner or nurse call line, and empanelment of patients to a primary care practitioner or care team
  • Can meet the requirements of the PCF Participation Agreement

*Note: Practices participating only in the SIP option are not subject to the specific requirements noted via asterisk above.

Practices receiving SIP-identified patients (identified based on risk score) must:

  • Include practitioners servicing seriously ill populations (MD, DO, CNS, NP, PA) in good standing with CMS
  • Meet basic competencies to manage complex patients and demonstrate relevant clinical capabilities (e.g., interdisciplinary teams, comprehensive care, person-centered care, family and caregiver engagement, 24/7 access to a practitioner or nurse call line) successfully
  • Have a network of providers in the community to meet patients’ longterm care needs for those only participating in the SIP option
  • Use 2015 Edition Certified Electronic Health Record Technology (CEHRT), support data exchange with other providers and health systems via Application Programming Interface (API), and connect to their regional health information exchange (HIE)

Practices designated as Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs), as well as those already participating in the CPC+ model, are not eligible to participate in the PCF initiative at this time.

What’s Next for the PCF Model

CMS anticipates accepting another round of PCF applications during 2020. Any practices accepted to participate in PCF during 2020 would begin participation in the model in January 2021. The SIP payment model option also will follow this timeline.

CMS will attribute SIP patients lacking a primary care practitioner or care coordination to PCF practices that specifically opt to participate in this payment model option. Practices may limit their participation in PCF to exclusively caring for SIP patients, but to do so, they must demonstrate in their applications that they have a network of relationships with other care organizations in the community to ensure that beneficiaries can access the care best suited to their longer-term needs.

Clinicians enrolled in Medicare who typically provide hospice or palliative care services can provide care for SIP patients either by participating as a practice in the PCF general payment model option or by partnering with a PCF practice participating in the general payment model option that includes these clinicians on their roster of participating practitioners.

CMS will also encourage other payers — including Medicare Advantage Organizations (MAOs), commercial health insurers, Medicaid Managed Care Organizations (MCOs), and state Medicaid agencies — to align payment, quality measurement, and data sharing with CMS in support of PCF practices.


doctor-elderly-coupleAimed at larger practices with at least 5,000 Medicare fee-for-service beneficiaries, DC is more ambitious than PCF and will allow provider organizations to have greater flexibility with how they utilize resources. The DC model options are meant to engage a wider variety of organizations with experience taking on financial risk and serving larger patient populations, such as Accountable Care Organizations (ACOs), MAOs, and MCOs.

Three models under DC include:

  • Direct Contracting – Professional to bear risk for 50 percent of shared savings/losses on the total cost of care
  • Direct Contracting – Global to bear risk for 100 percent of shared savings/losses
  • Direct Contracting – Geographic to bear risk for 100 percent of shared savings/losses for aligned beneficiaries in a target region

Depending on the DC payment model option in which an organization is participating, the model participant will receive a fixed monthly payment that can range from a portion of anticipated primary care costs to the total cost of care. Participants in the global payment option will ultimately bear full financial risk, while those in the professional payment model will share risk with CMS. This will provide prospective model participants a range of financial risk arrangements from which to choose, while providing a more predictable revenue stream and reducing health care provider burden commensurate with level of financial risk.

The Geographic Population-Based Payment (PBP) option encourages participation from innovative organizations, including health plans, health care technology companies, and other entities interested in entering into contractual relationships with providers and suppliers and taking on risk for a Medicare fee-for-service (FFS) beneficiary population in a defined geographic target region.

Who can participate in the Direct Contracting Payment model option?

The Professional and Global PBP options aim to attract a range of health care providers operating under a common governance structure, with attention given to advancing primary care as a means to managing overall health care better. The use of voluntary alignment will attract organizations that previously were ineligible because of their low volume of Medicare FFS beneficiaries, such as those who operate in the Medicare Advantage program.

Medicaid MCOs that provide Medicaid benefits for full-benefit dually eligible beneficiaries also will be able to participate as Direct Contracting Entities for their dually eligible enrollees who are in Medicare FFS.

Current Medicare ACOs interested in continuing and deepening their participation in Medicare risk arrangements will be eligible to participate in all three payment model options.

Additional Resources

CMS offers more information on the PCF and DC payment models:

Pennsylvania Medical Society members with questions can contact our Knowledge Center at 855-PAMED4U (855-726-3348) or

A version of this article appeared in the fall 2019 issue of Pennsylvania Physician Magazine, PAMED’s print magazine, and was reprinted with permission.

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