News: New model shows success in allocating payment to PCPs caring for medically complex patients

A new primary care activity level (PCAL) payment model would outperform the Massachusetts Medicaid and Children’s Health Insurance Program (MassHealth) in allocating capitated payments among primary care practices, a new JAMA Network Open study suggests.

The study was commissioned by a research team at UMass Chan Medical School to “develop a payment model to address differences in patient risk, including equity concerns such as potential underservice in low-income neighborhoods and the greater resources needed to care for people without secure housing.”

According to the researchers, there are two type of accountable care organizations (ACO) as far as the MassHealth system is concerned: “(1) primary care ACOs that directly contract with MassHealth and (2) accountable care partnership plans where MassHealth pays a managed care organization using capitation.”

Prior to 2023, primary care ACOs paid their clinicians via fee-for-service; however, in April 2023, MassHealth “increased its focus on primary care” and required that ACOs:

(1) increase the total dollars paid to primary care practices, (2) pay practices to care for their enrolled patient panels via prospectively determined monthly payments unlinked from the specific services they provide, (3) increase baseline expectations for the clinical criteria all practices must meet, and (4) make larger payments for practices that provide expanded access and services, especially for behavioral health.

The driving motivation behind the commissioned PCAL model, therefore, was that patients who tend to use “substantial non-primary care services” (i.e., medically/socially complex patients) should “benefit from more primary care services, both to coordinate and manage that care and to avoid exacerbations of chronic diseases that generate acute service use.”

According to the study, the PCAL model was constructed between February 2022 and November 2024—all participants included all 2019 Massachusetts Medicaid managed care eligible members who were enrolled for 183 days or longer.

The two main conclusions of the study were as follows:

• The model achieved estimates within 10% of observed PCAL spending for high-risk populations (mental health disorders, substance use disorders, complex chronic conditions, and disabilities) and across racial and ethnic groups.
• The PCAL model would match payment for age-adjusted and sex-adjusted patients almost exactly in the lowest decile and underpay by just 6% in the highest decile.

Editor’s note: To read the JAMA Network Open study, click here.