On June 8, 2023, the Centers for Medicare and Medicaid Services (CMS) announced the Making Care Primary (MCP) Model, a new voluntary 10½-year value-based care (VBC) innovation model that seeks to make advanced primary care available and sustainable by creating a pathway for eligible primary care providers to transition from fee-for-service (FFS) to a prospective, population-based payment. Nonbinding applications for the MCP Model were due to CMS on December 14, 2023. Selected applicants who choose to participate in MCP will be required to sign a participation agreement with CMS before beginning participation on July 1, 2024.

Who should consider participating in MCP?

MCP is designed to provide primary care organizations new to VBC an opportunity to enter into an Alternative Payment Model (APM) arrangement with CMS. Each organization considering participation will need to evaluate the opportunities inherent in the MCP program, as well as the additional administrative burdens and program requirements, to determine whether the model is a good long-term fit for its organization. While many different provider organizations may be interested in the MCP Model, it is most compelling for the following three situations:

1. Organizations new to VBC

MCP may be a great way for primary care organizations with limited or no experience in VBC models to enter an alternative payment arrangement. With a low minimum beneficiary threshold, and relatively low downside financial risk, primary care providers that are too small or new for the Medicare Shared Savings Program (MSSP) or the Accountable Care Organization (ACO) Realizing Equity, Access, and Community Health (REACH) Model may find MCP more palatable. Additionally, prospective payments and investment payments, such as Enhanced Services Payments (ESP) and Up-front Infrastructure Payment (UIP), can help organizations build infrastructure such as care coordination and data-sharing systems. These investments may enable favorable outcomes for beneficiaries and improve an organization’s performance not only in MCP, but also in other lines of business (e.g., Medicare Advantage).

2. Organizations with minimal success in other APMs

Groups that were not successful in other VBC programs such as MSSP or REACH may consider entering MCP’s Track 2 or 3. These tracks have limited downside risk with upside potential and they provide the ESP to help fund care management efforts. These tracks may also be appealing to VBC-established organizations that are more risk-averse and looking to avoid the downside financial risk exposure in other models.

Additionally, the MCP Request for Application (RFA) does not indicate that organizations participating in MCP will be subject to governing body requirements like those required of MSSP and ACO REACH participants. This may indicate at least some administrative simplicity for MCP relative to these other models.

3. Organizations serving underserved populations including through state Medicaid programs

Program features—including organizations qualified to participate, such as Federally Qualified Health Centers (FQHCs) and Indian healthcare services, the basis of ESP and health equity strategy plan requirements—highlight the intent of gearing the program toward organizations serving the underserved population.

Organizations with experience working with state Medicaid programs may benefit from participating in MCP because CMS plans to partner with multiple payers for this program, including state Medicaid agencies. CMS has stated that the objective of MCP is to encourage alignment of incentives across populations served by the different partner payers.

What are the downsides of MCP?

Less upside potential than other CMS VBC programs

Organizations that are already performing well in other VBC programs may not find as much financial success in MCP. While MCP has minimal downside risk, it also has limited upside potential relative to other models. MCP is likely not a good fit for ACOs already observing success in MSSP or REACH. Primary care organizations not yet participating in an APM may want to consider participation in MSSP or REACH individually or by joining an existing participating ACO. Joining an existing ACO may allow an organization new to VBC to take advantage of existing program infrastructure and access a higher upside potential with lower commitment. However, it also subjects the organization to more strictly managed and competitive programs.

Strict reporting requirements

MCP participants will need to report on all performance measures to receive a Performance Incentive Payment (PIP) adjustment for Track 1 and exceed the national 30th percentile on cost for Tracks 2 and 3. MCP participants will need to refine existing or develop new data structures to report on all the performance metrics. The administrative burden and costs associated with data reporting infrastructure can be significant. As an MCP participant progresses through the tracks, it is also measured against its own historical experience. This may also hinder continuous accumulation of a PIP adjustment over the 10½ years.

Ongoing and escalating care delivery requirements

Groups considering MCP should review the care delivery requirements in detail to ensure that their organization’s vision is aligned with the requirements as they advance through the tracks. The care delivery requirements focus on targeted care (high-risk beneficiaries) and chronic condition management (diabetes and hypertension), care integration (specialty care and behavioral health), and coordination (whole-person care). Potential MCP participants should consider their internal infrastructure as it relates to continuous success through the MCP program.

The care delivery requirements for Track 1 participants are focused on establishing the foundation to implement advanced primary care services through such activities as risk-stratifying their populations, developing workflows for care management and chronic condition management, and screening for behavioral health conditions and health-related social needs (HRSNs).

The care delivery requirements for Track 2 build off the requirements of Track 1; Track 2 participants are required to meet the requirements of both Track 1 and Track 2. The Track 2 requirements are focused on expanding and integrating the services available to patients. For example, once patients are risk-stratified and care management workflows have been established (Track 1 requirements), then MCP participants are required to begin implementing chronic care management for high-risk patients (Track 2 requirement).

MCP participants in Track 3 will have additional care delivery requirements beyond those for Track 1 and Track 2. The focus of the Track 3 care delivery requirements is optimizing and expanding care delivery and specialty care integration. For example, once patients are risk-stratified (Track 1 requirement) and chronic care management for high-risk patients is established (Track 2 requirement), then Track 3 MCP participants will be required to establish individualized care plans for all high-risk patients aligned to their chronic health needs.

MCP participants will also be required to develop a health equity plan and report on their progress to CMS annually. CMS’s stated intention for these health equity plans is for each MCP participant to identify outcome disparities in its populations and implement initiatives to measure and reduce those disparities.

Length of the MCP program

Potential participants should consider the long-term nature of the program, 10½ years, prior to submitting the application. While participants are allowed to terminate early, the specifications and any penalties are not yet defined. This is unlike MSSP and ACO REACH, where participants can reevaluate continuing in the program more frequently. The Center for Medicare and Medicaid Innovation (CMMI, or the CMS Innovation Center) has also indicated that the application into the MCP program will be one-time.

MIPS APM and Advanced APM (A-APM) status

MCP participants in all tracks are expected to meet the criteria under 42 C.F.R. § 414.1415 for being a Merit-based Incentive Payment System (MIPS) APM starting in the second performance year, subject to annual APM determinations. However, only Tracks 2 and 3 are expected to be classified as A-APMs, which alleviates the requirement for rigorous reporting, quality-tied payments, and financial risk standards.

What is MCP?

Background

The MCP model will be operated by the CMS Innovation Center and aligns with the National Academies of Science, Engineering, and Medicine (NASEM) vision of advanced, high-quality primary care: “whole person, integrated, accessible, and equitable health care delivered by interprofessional teams who are accountable for addressing the majority of an individual’s health and wellness needs across settings and through sustained relationships with patients, families, and communities.”¹ CMS stated the goals of MCP are to:²

1. Ensure beneficiaries receive primary care that is integrated, coordinated, person-centered, and accountable.
2. Create a pathway for primary care clinicians to adopt prospective, population-based payments.
3. Improve the quality of care and health outcomes while reducing or maintaining program expenditures.

Participation tracks

MCP will offer program participants three track options with progressive delivery and payment model architecture and the goal of supporting primary care providers as they transition from FFS to prospective, population-based payment.

Tracks 1 and 2 are progressive, with MCP participants only able to spend 2.5 years in their entry track. For organizations entering MCP in Track 1, they will subsequently only be able to spend two years in Track 2 before progressing to Track 3.

To be eligible for MCP entry into Track 1, the organization must have no experience in value-based care. Experience in value-based care as defined by CMMI in the RFA includes prior participation in Primary Care First (PCF), Comprehensive Primary Care Plus (CPC+), Next Generation ACO (NGACO), Direct Contracting, or ACO REACH programs, and/or having been part of an MSSP ACO that has not deferred its entry into a second agreement period under a two-sided model in the five most recent performance years prior to the start of the agreement.

There are no track-specific requirements for MCP applicants to enter into either Track 2 or Track 3. Organizations entering these higher-level tracks may, but are not required to, have value-based care experience. Organizations that enter into Track 3 should feel confident in their ability to implement the care delivery requirements for Track 3 by the end of 2025. If an organization is ineligible for Track 1 due to prior value-based care experience and is not confident in meeting the Track 3 delivery requirements by the end of 2025, then the organization could consider entering Track 2.

Payment structure

A key consideration for participating in an APM is the potential impact and risk the program may have on provider revenue. MCP includes six unique payment components that can be categorized as investment/care coordination, reimbursement, and performance-based payments.

Investment/care coordination payments

1. Upfront Infrastructure Payment (UIP): Provides funding for providers that are new to VBC to build infrastructure needed to enable success in prospective payment-based models of care. This $145,000 payment (paid in two increments of $72,500) is only available to Track 1 participants.
2. Enhanced Services Payments (ESP): Quarterly payment for providers to invest in care management, patient navigation, behavioral health, and other enhanced care coordination services. Payment amounts are based on beneficiary risk, social risk, and enrollment in Part D low-Income subsidy and generally reduce by half for each track progression.

Reimbursement payments

3. Prospective Primary Care Payment (PPCP): Provides a phased-in approach to transition providers from FFS reimbursement to prospective-based payment for primary care services. Track 1 will continue to reimburse on a FFS basis. Track 2 will reimburse 50% on FFS and 50% through PPCP payments, while Track 3 transitions to 100% reimbursement through PPCP payments. While PPCP provides consistent payment streams on a recurring basis, it also transfers revenue risk to providers to the extent that the payments are not sufficient for actual primary care services rendered.
4. MCP e-consult: New billing code offered to Track 2 participants intended to increase the use of e-consults with specialists. Track 3 participants are also encouraged to use this code; however, reimbursement is through the PPCP.
5. Ambulatory co-management: New billing code for Track 3 participants that allows for primary care providers and specialists to bill for co-management. This differs from historical co-management billing codes as it loosens the requirement for patients to have significant disease burden in order to bill.

Performance-based payments

6. Performance Incentive Payment (PIP): Rewards providers with a percentage adjustment to their FFS and PPCP payments based on their cost and quality performance. Maximum adjustment is 3% in Track 1, 45% in Track 2, and 60% in Track 3. Performance is benchmarked against the provider’s own historical experience, regional MCP attributed beneficiaries, and national all-payer populations. Continuous cost improvement accounts for 25% of potential PIP earned in Tracks 2 and 3 and may be difficult to sustain over a 10½-year program.

Diverse provider collaboration and care coordination

While MCP is focused on primary care clinicians, one of program’s goals is to encourage care coordination. For Track 1, CMS will provide high-level information to MCP participants related to utilization, cost, and quality, based on Medicare claims data, with the goal of encouraging referrals to high-quality specialists. Starting in Track 2, participants are required to enter into collaborative care agreements (CCAs) with “Specialty Care Partners.” The CCAs should outline protocols for communication, data sharing, and expectations for co-management of MCP-attributed beneficiaries. As such, organizations that have a diverse group of primary and specialist care physicians may have more success as they glide-path through the MCP tracks.

Payer partnership

Through MCP, CMS will partner with payers in MCP states, including Medicare Advantage organizations, commercial health insurers (including their self-insured business), and Medicaid managed care plans. It appears that CMS’ intention is to align incentives across the populations covered by the partner payers and facilitate effective practice transformation. A few examples of alignment areas identified by CMS are quality measures, data provision, and learning priorities.

The goal is to streamline local priorities across different programs and payers and realize cost savings when moving away from the traditional FFS model. The payer partnership is purely strategic, and CMS remains the sole payer within the MCP program. All payers will be eligible to partner with CMS in MCP regardless of their involvement in other CMMI models.

Appendix A provides an overview of key features of the MCP program.

How does potential payment in MCP compare to FFS and MSSP?

Figures 1 to 3 illustrate payment modeling for varying levels of provider performance in traditional FFS, MCP, and MSSP. Modeling results of each program are shown as total revenue, components of revenue, and percentage revenue change from traditional FFS.

A significant component of revenue in MCP is the Enhanced Services Payment. These funds must be invested in care coordination, patient navigation, and care management and cannot necessarily be viewed as margin. These investments, however, may result in better overall performance, which could lead to increased performance incentive payments. Additionally, the ESP is considered duplicative of historical chronic care payments. Therefore, chronic care payments are not reimbursed in MCP.

MCP offers significant upside potential relative to traditional FFS

From a financial perspective there is very little downside risk to participating in MCP. MCP returns higher revenue compared to FFS regardless of the level of provider performance. The performance incentive payment offers upside potential relative to FFS in addition to the investment payments received through the ESP. As a provider progresses to more advanced tracks in MCP, there will be some revenue risk assumed to the extent the PPCP does not adequately cover the cost of primary care services rendered.

Limited downside risk but capped upside potential compared to MSSP

A significant distinction between MCP and MSSP is the leverage risk exposure present in MSSP. In MCP, risk exposure and opportunity are relative to primary care revenue, while in MSSP risk exposure and opportunity are relative to the total cost of care. This significantly minimizes the risk exposure and potential upside of MCP compared to MSSP. As a result, MCP returns the highest revenue in low provider performance scenarios. Poor performance in MSSP’s Enhanced Track can result in a significant reduction of revenue, which is not observed in MCP. As provider performance approaches the median, MSSP begins to generate higher revenue than MCP. Revenue for high performance in MCP is significantly lower than in MSSP—which can observe revenue increases close to 300% beyond FFS.

Figure 1 illustrates payment modeling for low provider performance in each program. In a traditional FFS payment environment, provider performance has no impact on reimbursement and, therefore, revenue remains unchanged. In MCP, Track 1 continues to reimburse on a FFS basis, while Tracks 2 and 3 experience a nearly equivalent FFS reimbursement through a combination of FFS or PPCP. Across all three MCP tracks, the ESP is the largest contributor to total revenue increases relative to FFS, ranging from 15% to 41%. MSSP Basic Tracks cap losses as a percentage of revenue, which limits losses in this performance scenario. The MSSP Advanced Track shares losses at 40% with limited downside protection, resulting in a nearly 50% reduction in revenue.

Figure 2 models median provider performance across the programs. MCP continues to observe significant revenue increases due to the ESP and incremental increases through the PIP. MSSP observes the largest revenue increase as median performance results in shared savings. While MSSP basic tracks result in slightly higher revenue due to shared savings rates of 40% to 50%, the MSSP Advanced Track results in an over 90% revenue increase compared to FFS, as it receives 75% of total cost of care savings.

Figure 3 models revenue payments by program for provider performance in the 75th percentile. Each MCP track results in similar revenue amounts, as Tracks 2 and 3 earn larger PIPs, making up for the reduced ESP received compared to Track 1. This results in revenue increases between 47% and 62% compared to FFS. As performance continues to improve, MSSP observes the largest revenue increases as savings are shared based on a percentage of the total cost of care rather than a percentage of primary care revenue. This results in increased revenue of nearly 300% compared to FFS—an upside revenue potential far greater than MCP offers.

In addition to financial modeling, risk appetite, potential performance in program metrics, and other program requirements should also be considered when determining participation in an alternative payment program.

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¹ NASEM. Implementing High-Quality Primary Care. Retrieved January 29, 2024, from https://www.nationalacademies.org/our-work/implementing-high-quality-primary-care.

² CMS (August 14, 2023). Making Care Primary: Request for Application. Retrieved January 29, 2024, from https://www.cms.gov/files/document/mcp-rfa.pdf.

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