Q&A: AAFP's alternative payment model focuses on primary care

In 2016, the Physician-Focused Payment Model Technical Advisory Committee (PTAC) asked for healthcare organizations to put together new proposals for alternative payment models (APMs) that could be adopted under the Medicare Access and CHIP Reauthorization Act (MACRA). Among those submissions: a model centered around primary care doctors proposed by the American Academy of Family Physicians (AAFP).

So far, the submissions have been hit-or-miss in the eyes of PTAC. Its approved limited testing of models suggested by surgeons and gastroenterologists, while rejecting a proposal based around chronic obstructive pulmonary disease (COPD).

AAFP President John Meigs Jr., MD, took a deeper dive with HealthExec into the new model, titled the Advanced Primary Care Alternative Payment Model (APC-APM), including what current MACRA-recognized APMs inspired its components and how it could help smaller primary care practices qualify for the 5 percent APM bonus.  

HealthExec: How would the APC-APM model change how a primary care or family physician delivers care?

Meigs: The APC-APM attempts to align advanced primary care delivery models with payment methodologies that support the delivery of quality care. Historically, family physicians provided care and they were then compensated for that episode of care. In addition, they provide other services to their patients that are not accounted for in current payment methodologies. Our belief is the construct of a fee-for-service payment system does not support modern primary care practice. Our proposal attempts to create a payment model that promotes and supports comprehensive, coordinated, and longitudinal care.

Using a payment methodology that uses four components, the APC-APM provides monthly, prospective, risk-adjusted primary care global payments for direct patient care and monthly prospective, population-based payments covering non-face-to-face patient services. These first two components reduce the burden on the primary care practice because they don’t require a claim to be submitted for individual visits. They also recognize the continuous, rather than episodic, work that primary care physicians provide in caring for their patients.

The prospective, performance-based incentive payments promote value-based care and further reduce the current emphasis on volume over value.

Where have some of the concepts included in APC-APM been tested and shown to be effective?

Based on our analyses and early CPC (Comprehensive Primary Care initiative) results, we think the APC-APM will improve quality of care and outcomes while reducing overall costs, especially in high-cost and acute settings (such as hospitalizations and emergency department visits). The AAFP has experience working with commercial payers on multi-payer models (such as CPC and CPC+), and meets regularly with the largest national commercial health insurers on a variety of issues, including payment reform. The APC-APM has been constructed with this expertise – and the experience of our members – in mind.

The proposal calls for the model to be done on a national scale. Why is that appropriate?

We estimate that if the APC-APM is enacted on a national scale, it would affect more than 30 million Medicare patients and address patient safety. Currently, the limited availability of CPC and CPC+ means beneficiaries do not uniformly have access to comprehensive, coordinated and longitudinal care – and that primary care physicians have limited ability to qualify for value-based payment bonuses under MACRA.

By recommending to HHS that the APC-APM be implemented nationally, the AAFP is hopeful that all patients would benefit from primary care’s positive effects on access, quality, cost, and health promotion. To the extent the APC-APM is a multi-payer model, the actual number should be substantially more than that.

What about small practices—can they handle the risk this model involves and is it enough to qualify as an Advanced APM under MACRA?

We think this is a critical issue for Medicare beneficiaries – the availability of value-based care whether they see physicians in small or large practices, and in rural and urban areas. That is why the APC-APM was designed to allow any practice to participate. To the extent that a large portion of the services provided will be capitated through the risk-adjusted global primary care payment and population-based payment, the APM entity and its eligible clinicians will bear risk only for performance related to those services. Since the APC-APM requires participants to assume only performance risk, we think the model is feasible for small practices.

There’s still a fee-for-service component in the model—why is that necessary?

Family physicians treat broken legs, deliver babies, and preform a wide variety of medical procedures and services that are not reflected in the primary care global payments for direct patient care. This is especially the case in rural areas where specialists may not be available or there may be shortages, and primary care providers must deliver a broad range of services. The remaining fee-for-service component is also a nod to the fact that many primary care practices, especially small practices, are not ready to accept a complete global payment for everything they do, and is another effort to ensure that this model is accessible to small practices.

What are the next steps for this model potentially approved and implemented, considering we’re already in the transition year to MACRA?

Since PTAC is a relatively new entity, they are only beginning their work. We expect to receive preliminary feedback from PTAC in the coming weeks and look forward to eventually presenting this model to them. PTAC then deliberates on our proposal before eventually voting on it. Ideally, PTAC promptly considers our proposal and recommends it to HHS for approval and nationwide expansion.