May 10, 2019

Initial Insights into the New CMS Payment Models

The Partners Population Health Perspectives blog aims to share the opinions and ideas of our leadership team on health care topics related to population health management. In this post, Sree Chaguturu, MD, Chief Population Health Officer, shares his thoughts on the new CMS payment models

I was recently invited by the Centers for Medicare and Medicaid Services (CMS) to Washington, DC to participate in the unveiling of new care models for Medicare populations across the U.S. The “Primary Cares” initiative introduced five new voluntary alternative payment models, all centered on two important themes: 1. Ongoing commitment to a transition to value-based care; 2. Expanding access to alternate payments models to providers and patients alike.

During the meeting, Health and Human Services Secretary Alex Azar, CMS Administrator Seema Verma, and Innovation Center Director and Advisor to the Secretary Adam Boehler addressed the group of invitees, along with speakers from the American Medical Association, the American Academy of Family Physicians, and the Physician Focused Payment Models Technical Advisory Committee (PTAC). The Administration speakers emphasized their commitment to transforming the health care system from one that pays for volume to one that pays for value. They also highlighted new initiatives such as “Patients over Paperwork” that are intended to work with these new models to reduce burden on clinicians.

In my view, the most exciting component of “Primary Cares” is the recognition of primary care providers (PCPs) as the epicenter of care delivery transformation. These new payment models reward PCPs for providing convenient access to care and keeping patients healthy at home.

Partners HealthCare has a longstanding commitment to primary care transformation. We established Partners Population Health when we first embarked on this new journey towards value-based cared in 2012. The very first priority of our system was to transform our primary care practices to nationally recognized patient-centered medical homes that employ a team-based care model. We completed that work in 2018 which laid the groundwork for the deployment of 50+ population health initiatives through our primary care practices to meet the diverse clinical needs of our patients.

The new CMS Primary Cares initiative offers two tracks to participating health care organizations – Primary Care First and Direct Contracting- and builds on the Innovation Center’s existing models, Comprehensive Primary Care Plus (CPC+) and the Next Generation Accountable Care Organizations (Next Gen ACOs). These new models appear to be designed to encourage participation by non-traditional players including technology companies, human services organizations, and health insurance plans.

All three Direct Contracting Models include some form of capitation, either for primary care services or for the full set of services provided by an Accountable Care Organization (ACO). This movement away from the traditional “fee-for-service” reimbursement model in which providers are paid a fee for each medical service they provide, to a capitation model in which providers are given a monthly lump sum to manage the health of their population, will allow providers greater flexibility to invest in non-medical interventions like care managers and transportation that can better help patients live healthier lives.

The new Primary Cares models reflect the administration’s commitment to overhauling the current healthcare system to begin paying for value over volume. When Secretary Azar outlined his vision for Health and Human Services last year, he listed accelerating the path to value-based payment systems and reducing healthcare costs through increasing competition, empowering patients, and reducing regulatory burden as top priorities. These new models look to evolve the accountable care organization (ACO) model to more closely resemble Medicare Advantage. The new models incent ACOs to compete for patients much like Medicare Advantage plans do today. To increase competition, CMS is relaxing some regulatory restrictions on patient incentives.

The administration believes that these new models will be transformative for the American healthcare delivery system and represent a first step in dismantling the fee for service system. Secretary Azar expects that a quarter of both U.S physicians and Medicare beneficiaries will participate in one of the new models. Perhaps even more significantly, Administrator Verma signaled that we should expect that at least one of these new models will be mandatory in the future during a recent address to the National Association of Accountable Care Organizations.

A lot of work lies ahead to understand the details of these new models and whether one of them may be a good option for a large, complex integrated delivery system like ours. However, this recent announcement drove home two key messages: The American healthcare system continues to march toward value-based care; and Partners HealthCare’s commitment to care delivery transformation is helping to lead the way.


Sree Chaguturu, MD is the Chief Population Health Officer at Partners HealthCare and is part of the leadership team focused on insuring that Partners meets its aspirations of improving quality and reducing costs for the populations it serves. Dr. Chaguturu is responsible for oversight and implementation of Partners Healthcare’s Accountable Care Organization which manages the health of over a half million patients.  

Prior to joining Partners, Dr. Chaguturu was a health care consultant at McKinsey and Company, and Vice President of the McKinsey Hospital Institute.  He is a practicing internal medicine physician at Massachusetts General Hospital and an Assistant in Medicine at Harvard Medical School.  Dr. Chaguturu received his internal medicine and primary care training at Massachusetts General Hospital and received his undergraduate and medical degree from Brown University.

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