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Comments of the Direct Primary Care Coalition U.S. Senate Finance Committee White Paper on Development of New Models for Medicare Physician Payment to Bolster Chronic Care in Medicare.

The Direct Primary Care Coalition (DPCC) is pleased to submit comments to the Senate Finance Committee. These are formal comments from the Coalition developed collectively by physician members of the DPCC Coalition Steering Committee.DPCC is delighted to see that the Committee is exploring a payment model in Medicare that would allow for a per-beneficiary, per-month (PBPM) payment, provided in advance to the clinician. (Page 20of the White Paper). We have long been on the record supporting a replacement of fee-for-service payments with a flat fee model for primary care in Medicare. Since this is essentially our current payment model, it’s safe to say that collectively, the members of the DPC Coalition have more experience than any other physicians in the U.S. in this type of arrangement. We are excited to learnmore about the committee’s thoughts in this section, and our physician members around the countryare ready and willing to share their experiences in the model with the committee and offer any technicalassistance. As this provision of the white paper is our primary area of expertise, we will limit ourcomments to this topic.Direct primary care (DPC) is a growing value based payment model, included in Sec. 1301 (a) (3) of theAffordable Care Act – a part of the Essential Health Benefits. It was first developed in Washington statein the late 1990’s as a much more affordable alternative to then-growing “concierge” models, whichprovide for an additional annual payment to a physician for non-covered services (e.g. an executivephysical) and expedited access to care. In the DPC model, unlike concierge, fees paid to the physician arefor primary care medical services. Fees are typically paid up front, and payment for primary care servicesare outside of fee-for-service insurance reimbursement, significantly reducing administrative costs.Since there is no need to be paid for a “visit” in FFS, care is delivered in any setting convenient to thepatient and appropriate for the service being provided. Care in DPC can be virtual, but in-office visits andtelehealth are included. Since the passage of the ACA, thirty-three states have passed legislation andseveral more have promulgated regulations that define DPC as a medical service outside of insurancereimbursement that is regulated by state medical boards, not by insurance regulators— harmonizingstate insurance laws with ACA definitions for DPC as a medical service, not an insurance product.DPC is very popular among employers and individuals in every state in the country. In this model,primary care (and other specialties e.g. pediatrics, gynecology, and behavioral health) is paid for in a permember per month form (PMPM) fee. We think that with some careful adjustments, this can serve as amodel for the PBPM payment proposed by the Committee for Medicare. DPC payments are usuallymade in advance. Payments can be made by an individual, an employer or union health benefit onbehalf of the patient and his or her family members. There are also a few cases in Medicare Advantagewhere this payment model is deployed in a slightly different manner.Employers account for a significant amount of the recent growth in DPC. A 2020 Milliman studyconducted for the Society of Actuaries reported that employers who offer DPC as benefit alongside anemployer-sponsored health plan have shown a reduction in the demand for, and the cost of health careservices outside primary care. Employers who offered DPC in addition to a PPO-style plan had 19.90%lower claims costs; 40% fewer ER visits than those in traditional plans; 53.6% reduction in ER claims costand 25.54% lower hospital admissions on an unadjusted basis. The study showed that 99% of all DPCpractices surveyed were doing virtual consults via text/phone, and that 57% of DPC practices dispensemedications at significantly reduced prices, often below the cost of a PBM copay.The DPC Coalition has previously proposed such a payment model to the Centers for Medicare andMedicaid Services (CMS). The last of these occasions was during the development of the DirectContracting demonstrations, now known as ACO REACH. During that timeframe (2017-2018) we alsoprovided technical assistance to CMS, and their contractor, assisting with the development of surveyresearch and focus groups of physicians both in the DPC model and outside to inform the developmentof these demonstrations. While we do have some large-scale DPC practices participating in the ACOREACH program, it’s important to know that most smaller to mid-size DPC programs do not have thefinancial resources to bear full risk for the total cost of care for a beneficiary population. Additionally,the program still has many attributes of FFS, and a significantly higher data reporting burden than mostpractices are willing to bear. Finally, as we will discuss, there is a significant regulatory hurdle forpractices to participate in any of the current Medicare APMs. Most physicians in the DPC model arecurrently opted out of the Medicare program so that they do not run afoul of requirements to follow theMedicare Physician Fee Schedule for Medicare patients. These patients have voluntarily agreed to join aDPC practice at an affordable price and at no cost to Medicare. Please understand that the only reason aDPC physician would “opt out” of Medicare is to deliver care to existing Medicare patients in theirpractice at zero cost to the Medicare program—not because they do not want to treat beneficiaries ordon’t approve of the Medicare program. CMS, through the Center for Medicare and MedicaidInnovation (CMMI) has the authority to waive existing Medicare regulations to test innovative paymentand delivery models that aim to reduce program spending while maintaining or improving quality ofcare—like DPC. But CMMI has been unwilling to use the waiver authority Congress has given them inthe authorizing statute to change the opt out provision to permit DPC practices to be able to participatein any APM.Importantly, there are two pieces of pending legislation in Congress that should be passed as acompanion to the committee’s efforts that will help build physician capacity in this model forMedicare. First, S. 628, the Primary Care Enhancement Act, sponsored by Sen. Bill Cassidy, MD, andSen. Mark Kelly (D-AZ) would update the dated IRS definition of DPC in the tax code that treats fees paidfor DPC as insurance for the purposes of HDHP/HSA plans. The House version H.R. 3029 has passed thefull Ways and Means Committee on a bipartisan vote. The second bill pending passed the full Houseunder suspension in March; H.R. 3836, the Medicaid Primary Care Improvement Act, introduced by RepsDan Crenshaw and Kim Schrier, MD, would create a working group within CMS to allow states to offer aflat fee DPC model for Medicaid similar to the one you are proposing for Medicare. Both bills wouldcomplement the Committee’s work trying to move Medicare into a flat fee model and ensure thesoundness of the flat PBPM advance payment model in Medicare by building a strong multi-payerincentive for the model to be adopted in employer-sponsored health care and in Medicaid.As the Committee considers moving to a flat PBMP advance fee payment for primary care the DPCCoalition is pleased to present the following comments. We fully support any Medicare payment model that would provide a reasonable flat fee monthly fee for primary care services with the following attributes:

• Payment should come solely from a flat monthly fee of at least $150 for all primary care services.

• All existing primary care and E&M codes would be rolled into a single code for a monthly PBPM payment.

• Keeping the fee structure simple is a critical element to success. Per visit fees should beavoided– these offer a barrier to seeking appropriate care for many lower income beneficiaries.

• Bonus payment structures like shared savings in our experience are likely to drive misaligned incentives to provide unnecessary care.

• Payments could be risk-adjusted by CMS and increased with flat monthly care management fees from the $150 floor for significantly higher cost populations (e.g. dual eligibles).

• Patient panels in Medicare would be limited to 400 beneficiaries per primary care provider (PCP)to maintain appropriate levels of care for each beneficiary.

• DPC physicians opted out of Medicare may participate in this program or opt back in at any time without being limited to the full two year rolling window to participate without sanctions that would impact existing patients.

• CMS must keep physician coding burdens to a minimum to ensure success. We understand that some level of diagnostic coding will likely be needed for transitions of care in Medicare, butcoding should not be used for billing purposes. A single code for the PBPM fee should be sufficient.

• Practices would use the Person-Centered Primary Care Measure (PCPCM) to assess patient satisfaction an annual basis.

• Clinical and quality reporting measures need to be kept to a minimum. CMS would track downstream data on patient hospital admissions and specialty care as a cost measure.

• Physicians would report number of encounters with each patient and PCPCM data on annual basis.

• Beneficiaries would self-attest as having selected the participating physician as their (PCP) and would be instructed by Medicare to contact this PCP before seeking care from other providers/hospital except in an emergency.

• Patient clinical data and coverage verification from any other providers/hospitals must be shared with participating clinicians in real time so that participating physicians know when patients are seeking care from other providers.


Thank you for your consideration of these comments. The DPC Coalition is ready to work with theSenate Finance Committee on this exciting new proposal to help improve Medicare payment models,significantly increase Medicare’s commitment to primary care and improve the care available to all beneficiaries in Medicare.


Jay Keese,

Executive Director, Direct Primary Care Coalition

(202) 669-4061

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