Understanding CMS’s foray into direct contracting

May 15, 2018
Wayne Lipton

Medicare as rolled out its “direct primary care prototype,” but physicians should look closer at the model as it’s not quite DPC.

Direct primary care (DPC) has been getting a lot of attention over the past few years and now CMS has taken notice. The hope is a new approach to Medicare will improve patient health and save money by placing more emphasis on comprehensive care and preventive wellness.

However, before jumping on the DPC bandwagon, there are several important issues to explore.

The main selling point of DPC is the ability for physicians to lower the cost of their overhead and the time spent on paperwork by shrugging off Medicare and other third party payers. Physicians trade fee-for-service for a fixed monthly fee that covers all patient visits. It’s a risk, but for better or worse, one that some frustrated physicians feel is worth exploring. 

The CMS pilot program may be called the “Direct Primary Care Prototype,” but it’s not quite DPC. CMS is seeking to pay physicians a fixed monthly reimbursement to cover various services, such as office visits, certain office-based procedures, and time spent managing care for a patient.  Practices could be eligible for incentive payments if they hit savings and quality goals.

While it sounds as though doctors can save time by not having to bill for each service they provide, the services must still be accounted for and reported properly in order to receive the payment incentives that might make the program worth it. Could those requirements end up being even more burdensome to the physician than the current fee for service model? Could quality measures be designed so subjectively as to be declined in the same manner some services are currently declined by Medicare?

As history shows, there are risks associated with capitated programs and direct primary care, which even CMS acknowledges. The primary risk is that the physician is accountable for all costs associated with the patient’s care. That’s a heavy burden for physicians who know that-no matter how hard they try-they simply can’t enforce compliance with treatment protocols. Realistically, creating incentives that are achievable for physicians will be expensive for CMS, and simply managing the whole process may ultimately cost CMS more than it hopes to save.

Also, because it’s not yet spelled out, advocates are concerned with the potential for balanced billing, with physicians charging patients the difference between their fees and what Medicare reimburses. And perhaps even more significant is the concern that some providers will “cherry pick” their patients, thereby limiting access to care for the sickest and those on fixed incomes and ultimately putting the burden back on the feds.

The discussion surrounding the new CMS model is creating an interesting, timely, and important debate. We need to find ways to encourage physicians to continue seeing Medicare patients; to give patients more choices; and to reduce costs while improving quality. The question, of course, is how to achieve those objectives.

Before physicians risk their revenue in another program designed by CMS to pay them less, they should remember that they still have options, even in the current Medicare world.

Concierge medicine, in all its forms, allows physicians to accept fee-for-service Medicare, and also earn money from a new stable, private revenue source from their most loyal patients. And most importantly, the only additional quality measure they are beholden to is the satisfaction of their patients. The reimbursement they receive is not a dangled carrot that’s nearly impossible to achieve-it’s something that they earn immediately and that, if they provide high quality personalized and compassionate care, they can continue to earn.

I encourage physicians to proceed with caution if they want to explore this new approach to Medicare. With all things, the devil is in the details. They should first research well-established, proven models that are known to enhance medical practices and patient relationships.

Wayne Lipton has more than 35 years of experience in healthcare and business, including the past 13 years as founder and managing partner of Concierge Choice Physicians, LLC.