Tricia McGinnis, Center for Health Care Strategies and Laurie Zephyrin, The Commonwealth Fund

November 17, 2020


Even before the COVID-19 crisis hit, the U.S. had historically underinvested in primary care, spending only five to seven cents of every health care dollar on primary care services. The pandemic exacerbated the situation by decreasing provider revenue, particularly for safety-net practices and clinics serving low-income people covered by Medicaid. At the same time, Medicaid directors navigating pandemic-driven budget cuts are seeking to ensure that people continue to receive care for chronic conditions, behavioral health, and related social needs.

Supporting advanced primary care is one strategy that states can use to meet these challenges. Components of advanced primary care include: deploying community health workers and team-based care; integrating behavioral health services, including depression and substance use screening and treatment; identifying and addressing social care needs; and using telehealth to deliver services. There is evidence that these features can improve health outcomes and help address underlying health disparities related to chronic conditions. But promoting advanced primary care will require primary care practices to take on new responsibilities.

How States Can Use Medicaid Managed Care to Promote Advanced Primary Care

Nearly 70 percent of Medicaid enrollees receive primary care as a managed care benefit. Thus, managed care is a key lever that states can use to target investments to deliver advanced primary care. With support from The Commonwealth Fund, the Center for Health Care Strategies (CHCS) is assisting 10 states in promoting advanced primary care models. Based on this work, CHCS released an update to its 2019 Advancing Primary Care Innovation in Medicaid Managed Care: A Toolkit for States, which introduces a new section to the toolkit, Using State Levers to Drive Uptake and Spread, that provides in-depth guidance for designing and using these levers as well as actionable state examples.

States are using a range of promising strategies to encourage adoption and scale of advanced primary care models within managed care.

1. Use Medicaid Managed Care Contracts to Drive Adoption

States can use contracts to encourage Medicaid managed care organizations (MCOs) to invest in advanced primary care. For example, Pennsylvania requires MCOs to: support a patient-centered medical home (PCMH) program that serves at least one-third of members with the highest medical costs; implement social needs screening; and maintain a community-based care management program to address social needs and behavioral health. States can also put incentives and requirements in MCO contracts to adopt value-based payment models and hold MCOs accountable for adopting prospective payments and other approaches.

 2. Define Advanced Primary Care Delivery

It is important to be clear in provider guidance or MCO contracts about what advanced primary care looks like. New York, Ohio, Oregon, Pennsylvania, and Rhode Island use existing programs like PCMHs or accountable care organizations to move toward advanced primary care. Ohio, for example, requires its PCMH practices to use population health management approaches, including risk stratification; integrate behavioral health into care management; and identify patients who need community support and connect them to services. States can also set expectations for reducing health disparities. Michigan requires MCOs to collaborate with high-volume primary care practices to develop and implement evidence-based interventions to reduce health disparities in areas such as diabetes, women’s health, and immunization rates. Oregon is updating its PCMH standards to add an explicit focus on health equity.

3. Use Prospective Payment Models

Health systems can build payment for advanced primary care into fee-for-service. Alternatively, using prospective payments can offer stability and flexibility by providing predictable monthly payments that do not depend on the number of in-person visits. Washington State recently released a proposed Multi-payer Primary Care Transformation Model, under which provider payment may include a combination of transformation of care fees, comprehensive per-member per-month payments, and performance-based incentive payments. Rocky Mountain Health Plan in Colorado pays primary care providers a single, risk-adjusted, per-member per-month payment to cover primary care services.

4. Set Targets for State-Level Primary Care Spending

Even as states enact severe budget cuts, they can rebalance health spending toward primary care using Medicaid managed care contracting or legislation. Colorado, Delaware, Maine, Oregon, Rhode Island, Vermont, and West Virginia have legislation to measure and promote higher levels of health care spending devoted to primary care in Medicaid. Similarly, Washington State used its Medicaid managed care contracts to set primary care spending measurement requirements.

Supporting a Robust Foundation for Primary Care

State leaders who are serious about bolstering primary care can adopt a strategy deploying all of the above approaches. Medicaid can gain traction with practices ready to innovate by aligning payment methods and program requirements with primary care payment models established by the Center for Medicare and Medicaid Innovation, such as Comprehensive Primary Care Plus and Primary Care First. Despite the fiscal challenges, COVID-19 presents a rare window for Medicaid and other payers to accelerate adoption of approaches that strengthen primary care for high-quality care, equitable outcomes, and greater value. That requires bold, but feasible, investments in the nation’s primary care foundation.

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