Payment Model Demonstration Project (2024-2025)

The Payment Model Demonstration Project will test a common value-based payment model with approximately 30 independent practices in California to strengthen primary care delivery. The overarching goal of the demonstration project is to provide additional resources for primary care providers, equipping them to deliver high-quality patient care and achieve better outcomes. These resources include helping to boost revenue, providing technical assistance and delivering data exchange and insights. Due to the variety of payers that practices contract with, implementing payment changes collectively has the potential to yield greater positive impact compared to individual plan-driven efforts.

As the next phase of the California Advanced Primary Care Initiative, the demonstration project is a collaboration of PBGH’s California Quality Collaborative (CQC) and the Integrated Healthcare Association (IHA), as well as four participating health plans – Aetna, Anthem, Blue Shield of California and Health Net – beginning July 1, 2024 and ending December 31, 2025.

Barriers for Primary Care Practices

Primary care is the backbone of any high-performing health care delivery system, but it has been chronically underfunded, receiving approximately 4-7% of health care dollars while about 55% of health care visits take place in primary care settings.

The many barriers to the delivery of advanced primary care were underscored by pandemic burnout experienced by primary care providers. Small independent primary care practices, the primary focus of this demonstration project, are particularly affected by these barriers, which include misaligned payer incentives, minimal integration with other elements of care and the lack of necessary infrastructure, technology and workforce.

Common Value-Based Payment Model

Through the payment demonstration project, health plans will offer two similar versions of a value-based payment model. Practices may be paid under one or both depending on which health plans they contract with. Both value-based payment models invest more revenue into the practice and reward improvement and strong performance on the Advanced Primary Care Measure Set.

Hybrid Model:

• Monthly per member per month (capitated) payment
• Volume-based payment for specific pre-defined services (focusing on preventive care)
• Population health management payment to support practice improvements that will deliver better outcomes
• Incentives for strong performance on a common set of outcomes measures.

Fee-for-Service “Plus”:

• Volume-based payment for all services
• Population health management payment to support practice improvements that will deliver better outcomes
• Incentives for strong performance on a common set of outcomes measures.

Participating Practices

Practices that meet the following conditions will be considered for the demonstration:

• Independent practices with between two and 10 providers
• Serve adult, pediatric or mixed populations
• Located in Southern California and the Central Valley
• Contract with all, some or one of the participating health plans with sufficient membership

If your practice is interested in learning more, please contact Lindsay Petersen.

Support for Practices on How Best to Use the New Revenue

Focused support will be available to participating practices through a technical assistance program. The support will include regular one-on-one coaching to advise care teams on how to optimize their additional revenue for practice transformation.

Practices will have access to a common reporting platform to assess measure performance and progress across all participating health plans to reduce administrative burden. Plans will be trained on the platform as will the technical assistance coaches to manage troubleshooting and potential issues.

How Success Will Be Measured

Quantitative success will include return on investment for plans based on relative improvement on several key clinical and utilization measures, overall improvement on the Advanced Primary Care Measure Set for each practice and comparisons across practices, including the proportion of patients paid under each version of the value-based payment model and other variables.

Qualitative information on practice experience, engagement and impact is collected by technical assistance coaches to assess trends and make adjustments for future scaling of this multi-payer work. Information on the health plans’ experiences with multi-payer partnership is also collected with an eye toward learnings, improvement and future scaling.