Blue Cross and Blue Shield of North Carolina on Wednesday said it plans to shore up independent primary care practices in the state and help them move into value-based payment arrangements.
The Blues insurer said it would make lump sum payments to participating primary care practices in 2020 and 2021 to help them weather the COVID-19 pandemic, which has drained many providers of income and prompted some to close their doors. Those payments would be based on 2019 revenue and begin by September.
There are a few strings attached: the primary care practices must attest to stay open, remain independent and commit to joining Blue Cross NC’s value-based care program by 2021, the insurer said. Starting in 2022, the practices could choose to receive capitated payments, or fixed monthly payments per patient, to care for their patients instead of being paid for each service they deliver.
“The way we designed this program is to use this moment to provide relief to primary care providers, but also accelerate their movement into new payment models,” Dr. Rahul Rajkumar, Blue Cross NC’s chief medical officer, said in an interview.
In the past several months, healthcare providers of all types have lost money as they deferred non-urgent procedures and patients canceled routine doctor’s visits amid the COVID pandemic. Primary care practices, many of which operate on thin margins and lack large reserves, have been especially vulnerable.
A May survey of about 500 clinicians by the Larry A. Green Center and the primary care collaborative found 74% of primary care practices were operating under severe or near severe stress, 14% were temporarily closed and 1% had permanently closed. Despite receiving federal funds to help, about half of practices had furloughed employees.
Rajkumar said about half of North Carolina’s primary care practices are independently owned and operated. Experts worry that the closure of primary care practices will worsen physician shortages and limit access to care. Some independent practices in danger of closing may opt to join a healthcare system, which may increase the prices that insurers and patients pay for primary care.
A growing number of insurers are helping providers stay open during the COVID crisis. Buffalo, N.Y.-based Independent Health increased its payments to primary care practices to help them maintain a monthly cash flow similar to pre-pandemic levels. California insurer Inland Empire Health Plan also moved to fill gaps in hospitals’ and specialists’ revenue. Other insurers have offered providers loans or advanced payments or sped up the claims payment process.
But Blue Cross NC’s initiative, dubbed Accelerate to Value, focuses not just on keeping primary care practices whole in the near term, but speeding their transition to alternative payment models in the future. To keep them afloat, Rajkumar said Blue Cross NC will compare primary care practices’ spending in 2020 with their average spending in 2019 and make a lump sum payment to fill the gap. It will do the same thing in 2021. It will not recoup any excess payments that may occur.
Participating practices would be required to join an existing accountable care organization in the insurer’s value-based care program, Blue Premier, or join one run by Aledade, a company that helps primary care practices form commercial and Medicare ACOs. Blue Cross NC’s value-based program holds physicians accountable for the total cost and quality of care through upside and downside risk.
“Independent primary care practices are fighting COVID on the front lines every day. Declining visits have left many in jeopardy, adding to their emotional and financial strain,” Aledade CEO Farzad Mostashari said in an email. “These practices will be vital to helping the nation recover from COVID-19, and by stepping up to protect them, Blue Cross Blue Shield North Carolina continues to lead the nation in the transition to value based care.”
Blue Cross NC hopes that primary care practices will eventually opt to accept capitated payments, which Rajkumar said would allow “primary care practices to serve their patients in the best way possible, to give the right care at the right time, right place.”
“It just gives you flexibility to structure you practice in the way that makes most sense,” he said.”
Anecdotal evidence suggests that providers participating in value-based arrangements, and especially those that provide a predictable source of income like capitation, were having an easier time staying afloat during the pandemic than physicians relying on fee-for-service income. Adoption of these alternative payment models has moved at a glacial pace, however, in part because providers are reluctant to have their income staked on lowering costs and meeting quality targets.
Dr. Mark McClellan, a former CMS administrator and FDA commissioner who is the director of the Duke-Margolis Center for Health Policy at Duke University, said in an email that “we’d have a stronger primary care system that is better supported in managing public health challenges like COVID-19” if more primary care practices were already involved in such value-based payment models.
He noted that the Blue Cross initiative is consistent with recommendations he and other bipartisan healthcare experts made to Congressional leaders this month to support clinicians financially during the pandemic while helping them adopt alternative payment models in the coming years.