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Addressing primary care payment

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While many hospitals are overwhelmed caring for COVID-19 patients, many primary care practices are reducing services as well as staff during the pandemic. Some are even having to close due to the lack of funds to keep their practice going through the outbreak. Industry experts are urging healthcare payers, including government entities, to take significant steps toward addressing primary care payment now and for the longer term.

In an April 2020 letter to House and Senate leaders, AAFP Board Chair John Cullen, M.D., of Valdez, Alaska, wrote that “This public health crisis has identified significant cracks in our country’s primary care infrastructure. Population health will only be achieved when we identify and remove the barriers that exist.” The letter added that Congress now has “the opportunity to address systemic issues that have been plaguing primary care and the health care system more broadly.”

AAFP emphasizes that “as primary care goes, so goes the health of Americans, including millions with chronic health conditions.” When primary care practices face financial difficulties, it sends “a disruptive ripple across the entire US health care system, affecting countless patients.” In fact, AAFP says, “if Congress fails to address the sudden financial stress on primary care, the closure of more practices will disrupt the entire health care system.”

Elation Health is committed to help primary care practices throughout the COVID-19 pandemic. Please check out our COVID-19 Financial Guide, designed to help you succeed in dealing with the economic effects of COVID-19.

Joshua M. Liao, MD, MSc, medical director of payment strategy at UW Medicine in Seattle and an assistant professor in the Department of Medicine at the University of Washington School of Medicine, writes recently in MedPage Today that “Primary care is central to all phases of our pandemic response.” He notes that “in the longer term, the COVID-19 battlefront may shift almost entirely to primary care.”

Dr. Liao goes on to emphasize that:

COVID-19 provides an urgent rationale for leaders to prioritize policies that increase primary care reimbursement. These efforts were already underway many months ago, with public payers such as Medicare setting policy in motion to increase reimbursement for office visits. Such changes should go into effect as planned in January 2021, and ideally alongside newer accommodations such as reimbursement for telehealth visits.

The challenge with this timeline, Dr. Liao clarifies, is that the primary care practices that are currently struggling will have to survive through the end of the fiscal year. He adds that, because of this, “policymakers should also provide primary care providers more immediate financial support.”

He writes also that “solving the primary healthcare crisis will require more than payment changes.” The definition of primary care that currently differs among various stakeholders should be consistent and the issue of coordination must be resolved, as “payment changes enacted by insurers will be useful only if practices implement processes that improve outcomes.”

An article published by the Center for Health Care Strategies, Inc., highlights the fact that federally qualified health centers (FQHCs), “the first line of defense in underserved communities, serving primarily Medicaid patients and the uninsured” are also facing dire financial situations. In fact, many FQHCs may also be forced to close because of the coronavirus outbreak, either temporarily or permanently.

The solution for primary care may lie in prospective payment models, such as capitation or global payments, which “pay providers, teams, or organizations a predictable, upfront per-member-per-month (PMPM) payment to take care of a patient. Providers receive these payments whether they perform services for the patient or not. They are intended to:

  • Incentivize the provider to keep the patient well
  • Only give the patient the services they need to be healthy
  • Give providers greater flexibility to deliver services in a variety of ways.”

The writers suggest that “such models could be deployed quickly – with health plans or government payers providing PMPMs based on last year’s utilization, offering a short-term solution for provider cash flow problems.”