Home Health Industry Reacts to CMS Value-Based Primary Care Initiative

Health care policymakers on Monday unveiled a new voluntary risk-based initiative designed to reward physicians who keep patients at home and away from hospitals.

Based upon the work of previous administrations, the new initiative marks a major inflection point for the value-based transformation of the U.S. health care system, according to Department of Health and Human Services (HHS) Secretary Alex Azar.

Announced in lockstep with the Centers for Medicare & Medicaid Services (CMS), the Primary Cares Initiative features five different payment model options that fall under two main pathways, both of which incentivize primary care providers to reduce hospital utilization and total cost of care by rewarding them through performance-based payment adjustments.


“For years, policymakers have talked about building an American health care system that focuses on primary care, pays for value and places the patient at the center,” Azar said following the initiative’s unveiling. “These new models represent the biggest step ever taken toward that vision.”

While HHS and CMS plan to release additional information in coming months, the initiative’s overarching goals closely align with those of at-home care providers, all but guaranteeing prominent roles for home health and home care agencies under the value-oriented models moving forward.

One pathway is the experimental Primary Care First (PCF) route, which has two dedicated payment models.


The second pathway is a direct-contracting option, which has three dedicated payment models.

Broadly, both pathways allow practices to move away from fee-for-service and to eliminate their revenue cycle operations, CMS Innovation Center Director Adam Boehler outlined Monday. The Innovation Center will be tasked with administering the Primary Cares Initiative.

“CMS will make monthly population-based payments along with a simple, flat primary care visit each time a provider sees a patient,” he said. “Providers will be eligible payments if their patients stay healthy and at home.”

The PCF pathway — set to begin in January 2020 and subsequently tested for a total of five years — includes a payment model option that provides higher payments to practices that specialize in care for high-needs patients, including those with complex, chronic needs and seriously ill populations.

While the PCF models are focused on individual primary care practice sites, the direct-contracting payment model options are meant to engage a broader group of health care organizations with experience taking on financial risk and serving larger patient population. Examples include Accountable Care Organizations (ACOs), Medicare Advantage (MA) plans and Medicaid managed care organizations (MCOs).

The direct-contracting option is expected to launch in January 2021.

Initial reactions

HHS and CMS believe the new Primary Cares Initiative would provide better alignment for nearly 11 million Medicare fee-for-service beneficiaries and about one-quarter of all primary care practitioners.

In particular, the initiative will likely create more coordinated care arrangements for individuals fully eligible for Medicare and Medicaid, according to HHS.

Overall, the home care community should be encouraged by the announcement that policymakers are embarking on the Primary Cares Initiative, with the central goal of the project being to get people home and keep them there as long as possible, National Association for Home Care & Hospice (NAHC) President William A. Dombi told Home Health Care News.

“It can be expected that primary care practitioners in any of the five iterations of the demonstration project would embrace home health services and hospice care as vital partners in managing their patients’ care needs in the community, as well as in transition to home from an in-patient setting,” Dombi said. “We look forward to working with CMMI and primary care practitioners to achieve the goals of the project.”

Washington, D.C.-based NAHC represents roughly 33,000 home care and hospice providers.

The American Academy of Home Care Medicine (AAHCM) — which worked with the CMS Innovation Center for the past year to help develop the new primary care payment models — is also among the health care stakeholders that have voiced support for the Primary Cares Initiative.

“The Primary Cares Initiative offers upfront payment incentives to serve Medicare populations with complex medical and social needs,” Dr. Eric De Jonge, president of AAHCM, said in a statement. “The two [pathways] … offer enhanced payment for home-based primary care and other providers to care for people with advanced illness.

Based in Chicago, AAHCM represents physicians, nurses, physician assistants, social workers and other health care professionals dedicated to working in the field of home care medicine.

National Hospice and Palliative Care Organization (NHPCO) President and CEO Edo Banach likewise applauded the move.

“While we look forward to gathering more details about HHS’s recently announced set of payment model proposals, we applaud the administration’s goal of delivering better value and care for patients,” Banach said in a statement.

Headquartered in Alexandria, Virginia, NHPCO is the largest nonprofit membership organization for hospice and palliative care programs.

The PDGM landscape

In general, home health industry executives who spoke to HHCN on background said they were excited about the new Primary Cares Initiative and its ability to shift more care into the home setting.

However, they said, for home health providers to see upside under the five payment models, they’ll need to demonstrate value and educate prospective primary care partners on the impact of their services.

Sources spoke to HHCN on background because they are still working to fully understand the updates from HHS and CMS — and how home health providers fit into the picture financially.

Encouraging primary care providers to keep their patients out of the hospital, in turn, would likely increase community-based home health referrals, the sources pointed out. It’s unclear how that outcome would fit alongside the Patient-Driven Groupings Model (PDGM), which pays home health providers more for care delivered to patients referred from institutional settings.

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