Incentivizing Hybrid Care Can Enhance Fee-for-Service Care Delivery

A new model that incentivizes primary care providers (PCPs) to use new modes of delivery, such as remote care, can "drastically improve upon" the traditional fee-for-service structure, new research shows.

Assessed in a study published in Manufacturing & Service Operations Management, the model mixes a per-patient capitation fee paid — a monthly upfront fee — to physicians with reduced fee-for-service payments regardless of whether a patient is seen remotely or in person. The model also provides incentives for practices that meet a baseline for value based on factors like appointment wait time and chronic care management.     

The Centers for Medicare & Medicaid Services launched the Primary Care First (PCF) model in January 2021. It was piloted in three programs from 2011 to 2017. Official PCF data will only be available after the first-year wave is completed in 2026.

For this study, researchers used data from practices in 14 states to examine the link between how physicians are paid and their patient outcomes under the PCF model.

The research team analyzed how PCPs chose to deliver care —remotely, in-person, or through referrals to a specialist. They aimed to identify the optimal mix of care delivery modalities for high-quality patient care and adequate provider reimbursement.

Their assessment revealed that optimizing primary care delivery for PCPs and patients would involve using remote care capabilities for the least complex patients and referring the most complex ones to specialists.

Those in the middle of the complexity spectrum should be seen in person by PCPs, the research shows.

Researchers also found differences in care delivery modes across the states studied. For instance, in states with more complex health needs, patients required more in-person care options. Further, high capitation fees paid to providers led to more specialist referrals.

But, based on their analysis, the research team also noted the weaknesses of the current PCF model.

The model sets in-person or telehealth primary care visit fees at about $40 nationwide, which is too low for many markets. Not only that, but researchers found that the program does not lead to enough telehealth use, straining the primary care workforce and capacity.  

"PCF has the potential to be designed to achieve socially optimal outcomes," the researchers wrote in the study. "However, the fee per visit may need to be tailored to the local population's health status."

Previous research has shown that while virtual primary care is popular among patients, many prefer it as a supplement to in-person care.

Survey results released by Elevance Health last November show that 79 percent of over 5,000 US adults believed virtual primary care allowed them to take charge of their health, and 94 percent were satisfied with their experience.

But the 31 percent who had not used virtual primary care believe an in-person visit with a provider is required to fully diagnose a medical issue. Also, less than half of Americans (41 percent) with a primary healthcare provider prefer digital communication.

Regardless, provider organizations are increasingly implementing virtual primary care services.

Last month, the ChristianaCare Center for Virtual Health launched a virtual primary care practice for residents of Delaware, Pennsylvania, Maryland, and New Jersey. Available by monthly, quarterly, or yearly subscription, the service gives patients access to same-day appointments, extended hours on nights and weekends, and text messaging options.