Through the Comprehensive Primary Care (CPC) and Comprehensive Primary Care Plus (CPC+) programs, the Centers for Medicare & Medicaid Services (CMS) has encouraged primary care practices to invest in "comprehensive primary care" capabilities. To help CMS design alternative payment models (APMs) that reimburse primary care practices for these capabilities, the authors developed and piloted a method for estimating related practice expenses.

Practice Expenses Associated with Comprehensive Primary Care Capabilities

Mark W. Friedberg, Grant R. Martsolf, Andrada Tomoaia-Cotisel, Peter Mendel, Ryan K. McBain, Laura Raaen, Ryan Kandrack, Nabeel Qureshi, Jason Michel Etchegaray, Brian Briscombe, et al.

ResearchPublished Nov 15, 2018

Cover: Practice Expenses Associated with Comprehensive Primary Care Capabilities
Download PDF

Does not include appendix.

Additional Downloads

Includes Appendix

Through the Comprehensive Primary Care (CPC) and Comprehensive Primary Care Plus (CPC+) programs, the Centers for Medicare & Medicaid Services (CMS) has encouraged primary care practices to invest in "comprehensive primary care" capabilities.

Empirical evidence suggests these capabilities are under-reimbursed or not reimbursed under prevailing fee-for-service payment models.

To help CMS design alternative payment models (APMs) that reimburse the costs of these capabilities, the authors developed a method for estimating related practice expenses.

Fifty practices, sampled for diversity across CPC+ participation status, geographic region, rural status, size, and parent-organization affiliation, completed the study. Researchers developed a mixed-methods strategy, beginning with interviews of practice leaders to identify their capabilities and the types of costs incurred. This was followed by researcher-assisted completion of a workbook tailored to each practice, which gathered related labor and nonlabor costs. In a final interview, practice leaders reviewed cost estimates and made any needed corrections before approval.

A main goal was to address a persistent question faced by CMS: When practices reported widely divergent costs for a given capability, was that divergence due to practices having different prices for the same capability or from their having substantially different capabilities?

The cost estimation method developed in this project collected detailed data on practice capabilities and their costs. However, the small sample did not allow quantitative estimation of the contributions of service level and pricing to the variation in overall costs. This cost estimation method, deployed on a larger scale, could generate robust data to inform new payment models aimed at incentivizing and sustaining comprehensive primary care.

Key Findings

Practices varied considerably in the comprehensive primary care capabilities they adopted

  • The most-commonly adopted capabilities were empanelment (92 percent of practices), same-day or next-day office visits (90 percent), and patient education and self-management support (88 percent).

The costs of comprehensive primary care capabilities ranged widely

  • Medication management had the highest annual median cost per full-time-equivalent primary care practitioner (FTE PCP) ($11,496 per year), and extended hours had the lowest ($0), because the majority of practices offering extended hours did so without incurring marginal costs (i.e., they paid no overtime and had no unfilled appointment slots).

Overall findings

  • The period of data collection was long (median 92 days between initial interview and practice approval of final cost estimates).
  • Practices were unable to estimate patient panel sizes consistently, due to varying definitions of patient panels.
  • Practice leaders expressed substantial uncertainty concerning startup costs.
  • In general, cost variation among practices ostensibly providing the same comprehensive primary care capability (e.g., among the multiple practice-reported services categorized as "medication management") was at least partially attributable to differences in the level of service provided.
  • However, price variation still played a role, such as when high-cost outlier practices appeared to offer the same service as lower-cost practices (e.g., because they used more expensive labor mixes).
  • With a sample of 50 practices, we were unable to estimate quantitatively the relative contributions of level-of-service variation and price variation to the variation in overall costs.

Recommendations

  • A similar mixed-methods approach to estimating the costs of comprehensive primary care capabilities, deployed on a larger scale than in the current study, could serve as a robust basis for future payment models that seek to incentivize and sustain comprehensive primary care.
  • To address the challenges of collecting data in necessary detail, future efforts could plan for longer data-collection periods, experiment with offering greater financial incentives for participation, or try to provide other types of incentives.
  • Additional methodological development might be necessary to better estimate the startup costs of comprehensive primary care capabilities, capture the costs borne by parent organizations, estimate patient-panel sizes consistently, and determine how much cost variation is attributable to differences in patient needs.

Topics

Document Details

Citation

RAND Style Manual
Friedberg, Mark W., Grant R. Martsolf, Andrada Tomoaia-Cotisel, Peter Mendel, Ryan K. McBain, Laura Raaen, Ryan Kandrack, Nabeel Qureshi, Jason Michel Etchegaray, Brian Briscombe, and Peter S. Hussey, Practice Expenses Associated with Comprehensive Primary Care Capabilities, RAND Corporation, RR-2495-CMS, 2018. As of October 11, 2024: https://www.rand.org/pubs/research_reports/RR2495.html
Chicago Manual of Style
Friedberg, Mark W., Grant R. Martsolf, Andrada Tomoaia-Cotisel, Peter Mendel, Ryan K. McBain, Laura Raaen, Ryan Kandrack, Nabeel Qureshi, Jason Michel Etchegaray, Brian Briscombe, and Peter S. Hussey, Practice Expenses Associated with Comprehensive Primary Care Capabilities. Santa Monica, CA: RAND Corporation, 2018. https://www.rand.org/pubs/research_reports/RR2495.html.
BibTeX RIS

Research conducted by

The research described in this report was sponsored by the Centers for Medicare & Medicaid Services, Department of Health and Human Services and conducted by RAND Health Care.

This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.