Fact Sheet: Medicare-Medicaid Advanced Primary Care Demonstration Initiative

Today, Secretary Sebelius, along with Director of White House Office of Health Reform Nancy-Ann DeParle and Vermont Governor Jim Douglas, announced that the Centers for Medicare and Medicaid Services (CMS) will establish a demonstration program that will enable Medicare to join Medicaid and private insurers in innovative state-based advanced primary care initiatives.

Advanced Primary Care Model

The Advanced Primary Care model (APC), also known as the patient-centered medical home, is emerging as a leading model for efficient management and delivery of quality care. An APC practice links multiple points of health delivery by utilizing a team approach with the patient at the center. The care model emphasizes prevention, health information technology, care coordination and shared decision making among patients and their providers.

An APC doctor’s office is a re-designed practice that has shifted from focusing on episodic treatment of disease to the holistic care of a patient. Practices are paid a per member per month fee for intensive primary care interventions such as coaching chronically ill patients on effective self-care, working with patients to develop an individual care plan, coordinating with a patient’s other doctors and specialists, using technology to track and coordinate patient care, managing hospital transitions and utilizing resources outside the physician office to help patients navigate the health care system and stay healthy.

Following is an example of how an APC model can improve patient care:

• Rita, who was diagnosed with diabetes 3 years ago at age 54, was told by her doctor to lose weight, exercise and come back in 3 months, advice she promptly ignored. When her condition suddenly worsened this year, she was referred to an APC Practice where she worked with a multidisciplinary team to develop a care plan. The team includes her doctor, a nurse, dietician and a diabetes educator, all of whom meet with her regularly about her care plan, her medications and keeping her blood sugar under control. The team not only meets with Rita, but they meet with each other to discuss Rita’s care and coordinate next steps. Since January, Rita has lost 24 pounds, walks three miles per day and has her blood sugar under control.

Investing in intensive primary care interventions and care coordination for patients like Rita may prevent hospitalizations, reduce emergency room visits, and control drug costs in many of the states currently investing in APC models, so Medicaid and insurers may save money and improve care.

The APC model was developed by the four leading primary care physician specialty societies—the American Academy of Pediatrics, the American Academy of Family Physicians, the American College of Physicians, and the American Osteopathic Association. It has been endorsed by other health care provider groups, private healthcare purchasers, labor unions and consumer organizations, including IBM, Merck and Company, the ERISA Industry Committee, and AARP.

It is being tested in practice demonstrations by public and private insurers, including at least 30 state Medicaid programs, Blue Cross and Blue Shield, United Healthcare, CIGNA, and Aetna as well as systems like Geisinger, Kaiser, and Group Health.

State-Based Initiatives

States have initiated APC projects of differing scale to improve the delivery of services in Medicaid. Given the resources required to become an effective APC -- improved technology, additional staff, and changes in practices -- a subset of states have brought private payers together with Medicaid to align incentives and increase the benefit to providers who become APC models.

States currently engaged in multi-payer APC initiatives have invited Medicare to participate given that Medicare’s involvement will create a truly all-payer system.

New Medicare Demonstration

Under the new demonstration program, CMS will solicit applications from states, which would be the only entities that could apply. To participate, states would have to certify that they:

• Have established effective Advance Primary Care models in all or parts of their states that include their Medicaid program as well as private payers.
• Can demonstrate that a majority of the primary care physicians in the demonstration areas would participate.
• Have stringent requirements for designating Advance Primary Care providers, including independent accreditation and requirements for the use of health information technology.
• Have integrated public health services to emphasize wellness and prevention.
• Have secured the participation of a sufficient number of private payers.

CMS will move forward with a separate Medical Home Demonstration required under the Medicare Improvements for Patients and Providers Act (MIPPA) and the Tax Relief & Health Care Act of 2006 (TRHCA).

Research Design

This Medicare demonstration would test whether these projects:

• Reduce unjustified variations in utilization & expenditure across delivery systems;
• Improve the safety, effectiveness, timeliness, and efficiency of healthcare;
• Increase the ability of beneficiaries to participate in decisions concerning their care;
• Increase availability and delivery of care that is consistent with evidence-based guidelines in historically underserved areas; and
• Reduce overall utilization and expenditures under the Medicare program.

Timeline and Budget Requirements

CMS will begin soliciting applications this fall with an aim to begin implementing the program early in 2010. The demonstration will take place over three years.

The APC demonstration must generate savings for the Medicare trust funds and the federal government overall. The demonstration’s design will include mechanisms to assure this. The Medicare trust funds will never be at risk.