Did CMS Just Undercut Arguments for Direct Primary Care? - Annals of Internal Medicine: Fresh Look Blog


Wednesday, May 22, 2019

Did CMS Just Undercut Arguments for Direct Primary Care?

We all know health care delivery could use a makeover, especially those of us in internal medicine, where patients face long waits for short appointments, physicians dedicate hours to menial tasks, and trainees spend more time in front of computers than many software developers. But making change is difficult—particularly given present reimbursement models that tie physician payment to a series of boxes that must be checked.

In the face of these byzantine billing requirements, some entrepreneurs hoping to innovate in the primary care setting have embraced a model of “disintermediating” insurers. By cutting out the middleman, moving from a patient-pays-insurer-pays-clinician model to patient-pays-clinician model, companies get more latitude to experiment.

These no-insurance practices—known collectively as direct primary care—have become increasingly popular. Some have employed innovative new strategies for reaching patients: changing staffing, space design, appointment length, and access to clinicians and introducing slick apps. The problem? By removing the insurance company and engaging in a patient-pays-clinician model, these practices become financially out of reach for many patients.

Recognizing their potential to worsen health disparities, the American College of Physicians released a policy statement on “direct patient contracting practices” (DPCP), published in Annals in 2015 (1). This term—intentionally broader than direct primary care—encompasses cash-only, boutique, concierge, and other models in which patients pay directly for some or all care.

The statement cautions that many of the methods that DPCPs use to streamline their practices have unintended consequences. For example, by reducing patient panels (to an average of 900 rather than 2300 patients [2]), DPCPs can limit access to physicians. Disadvantaged communities and persons of color shoulder most of these losses. Indeed, a nationwide study found that DPCPs served fewer African American and Hispanic patients (2). This discrimination, whether intentional or not, violates principles espoused by many physicians and articulated in the ACP Ethics Manual (3).

This all begs the question: If insurance payment models limit innovation in health care, and if circumventing insurance is problematic because it worsens health disparities, where do we go from here?

Fortunately, a just-announced program from the Centers for Medicare & Medicaid Services (CMS) suggests a way forward.

In April 2019, CMS introduced a new set of experimental reimbursement models (4) that will go into effect in 2020. This 5-year program will facilitate innovation by reducing administrative burdens on practices that care for patients with Medicare and Medicaid. The goal is to reduce costs, improve outcomes, and financially reward the best primary care practices.

The reforms won’t immediately apply to all patients—just those with Medicare and Medicaid in care settings that opt into these experimental payment models. But given that private insurers often emulate Medicare, they could make similar reforms in the coming years—especially if this CMS experiment proves effective in improving value.

Even without reaching those on private markets, the new CMS payment options could soon bring innovative models of care to millions of Americans regardless of wealth or ability to pay. Perhaps most important, by providing regular and predictable payments to practices, they could undercut the oft-repeated argument that health start-ups must work outside the insurance system to innovate. Sure, contracting with CMS would reintroduce a third-party payor, but the streamlined payment models might make CMS a much more agreeable middleman to work with. In addition, by paying more to practices that care for sicker populations, these new models would address the perverse incentive that otherwise encourages DPCPs to cherry-pick healthier people.

It is high time for insurers to explore ways to reduce administrative burdens. The CMS goal of promoting innovation without restricting access is laudable. DPCPs interested in improving health care delivery and value should consider embracing these payment models and welcoming patients with Medicare and Medicaid into their practices.

  1. Doherty R; Medical Practice and Quality Committee of the American College of Physicians. Assessing the patient care implications of "Concierge" and other direct patient contracting practices: A policy position paper from the American College of Physicians. Ann Intern Med. 2015;163:949-52. [PMID: 26551655] doi:10.7326/M15-0366
  2. Alexander GC, Kurlander J, Wynia MK. Physicians in retainer ("concierge") practice. A national survey of physician, patient, and practice characteristics. J Gen Intern Med. 2005;20:1079-83. [PMID: 16423094]
  3. Sulmasy LS, Bledsoe TA; ACP Ethics, Professionalism and Human Rights Committee. American College of Physicians ethics manual: seventh edition. Ann Intern Med. 2019;170:S1-S32. [PMID: 30641552] doi:10.7326/M18-2160
  4. Centers for Medicare & Medicaid Services. Primary Care First Model Options. Updated 2019. Accessed at https://innovation.cms.gov/initiatives/primary-care-first-model-options on 8 May 2019.

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