$600M CMS bump to PCPs previews medical-home model

The Centers for Medicare & Medicaid Services (CMS) has adopted a transitional care payment code that places primary care at the center of its strategy to build a high quality healthcare system with reduced costs. The policy may nudge the U.S. closer to the medical home model, according to a Feb. 21 editorial in the New England Journal of Medicine.

This emphasis on the primary care medical-home model is reflected in CMS’ adoption of CPT codes that provide bundled payments to primary care physicians who manage patients’ transition back into the community after discharge from hospitals, rehabilitation facilities or skilled nursing facilities. These transitional care services feed into CMS’ ultimate goal of reducing readmissions.

In the editorial, Andrew B. Bindman, MD, from the University of California, San Francisco, and his colleagues wrote that such shifting of resources toward primary care has “opened the door to further increases in primary care payment in return for the greater accountability and efficiency that studies suggest may be attained through a medical-home model.”

CMS’ transitional care payment provides physicians with additional compensation for specified non-face-to-face care coordination services in addition to an office visit seven to 14 days following a discharge. Such transitional care services include structured hospital discharge planning, reconciliation of hospital-prescribed medications with previous medications, assessment of follow-up needs once a patient returns home and electronic discharge notifications and structured discharged summaries, among others.

While Bindman et al noted that a follow-up visit does not necessarily translate into higher quality and lower costs, physicians strongly advocated for a required visit when the payment code was proposed. Moreover, CMS has concerns that patients might be confused why they’re charged a co-payment for transitional services if no visit is involved, and also suggested the lack of a visit could increase the possibility of fraudulent billing.

Primary care physicians have much to gain from the new payment code. CMS estimates that it will pay $600 million for transitional care services, with the majority going to primary care doctors, according to the editorial. This means that physicians, on average, will receive a 7 percent increase in Medicare payments because of the code.

CMS may take its interest in transitional care services a step further. The agency stated in the rule that it plans to develop an enhanced payment for primary care services delivered by physicians in advanced primary care practices that have implemented a medical-home model.

The agency has yet to fully define these types of advanced primary care practices, but once it does it “could increase payment for primary care and permit services to be delivered in more efficient ways,” according to Bindman and colleagues.  

The transitional care payment indicates that CMS may move in the direction of the medical-home model to fulfill its goal of high quality health services with lower costs, Bindman and colleagues concluded.