Will CMS’ Primary Cares Initiative Impact the DPC Movement?

On April 22, 2019, the Centers for Medicare and Medicaid Services (CMS) announced a new set of payment models under the Primary Cares Initiative. The initiative, which is set to begin in January of 2020, is designed to promote primary care among beneficiaries of Medicare, with the goal of preemptively addressing health concerns and reducing hospitalizations. The Primary Cares Initiative includes two specific areas of opportunity: Primary Care First and Direct Contracting. The Primary Care First model works to improve the health of the general Medicare population, while the Direct Contracting model focuses on high-need beneficiaries who do not currently have a primary care physician.

The Primary Cares Initiative is intended to improve the quality of primary care and decrease costs in our health system by tapping into value-based care. The initiative proposes an alternative payment structure to the traditional “fee for service” (FFS) model that currently dominates the primary care payment landscape. The initiative will specifically compensate doctors through a monthly membership fee of $24 to $175 per patient per month, depending on the patient’s initial level of illness when joining the practice, as determined by CMS. Physicians will also be reimbursed $50 per patient per office visit. Practices will be eligible to receive additional monthly funding if they improve their “clinical quality and patient experience,” according to the standards set by CMS1.

As CMS describes, “Primary Care First prioritizes patients by emphasizing the doctor-patient relationship. The model aims to improve the experience for beneficiaries by reducing administrative burdens so practitioners can spend more time with patients”1. Overall, the Primary Cares Initiative was designed to give practices the freedom to provide care in ways that fit individual patient needs, instead of adhering to a strict billing format.

So what do Direct Primary Care physicians think?

At first glance, this legislation appears to be exciting for primary care physicians nationwide, especially among those within the Direct Primary Care (DPC) movement who are no strangers to innovative payment models and value-based care. However, there are some potential sticking points that have made many DPC physicians skeptical about opting in.

Primary Cares First Initiative

DPC physician Dr. Landon Roussel was excited upon hearing about the Primary Cares Initiative. His practice, Communitas Primary Care, is set up as a hybrid of patients who partake in the DPC membership payment model and Medicare beneficiaries who operate under the current FFS payment model. This setup makes Dr. Roussel a perfect candidate to opt into CMS’ initiative. He explains, “I have hope that Medicare can prioritize primary care and pay [PCPs] for the value they provide.” But Dr. Roussel isn’t sure that he will make the switch. “I want to make the program work, but there are way too many question marks.” 

In fact, many DPC physicians are skeptical of the initiative because of the unknown factors that have yet to be outlined. For example, Dr. Roussel wants to know more about the risk adjustment factor that determines how much providers are paid per patient per month. Dr. Roussel is concerned by the lack of healthcare data that exists for many Medicare beneficiaries, since the initiative is set up so that physicians are paid according to the health status of their patients before they join the practice. Further, as Medicare beneficiaries age, they require significantly more care, especially in their last few years of life. It is quite possible that Medicare would determine that the monthly pay rate is significantly less than the value of the care, because it would be based on outdated information. Dr. Roussel explains, “I don’t want to be left in a situation where my patient population is sicker than what Medicare determines it to be, so they pay less than the current FFS system.”

Dr. Roussel plans to make a decision once more objective information surrounding the specifics of the initiative are released. “I’d feel more comfortable if there was something written in law about pricing for value-based payment and how to mitigate disputes between physicians and Medicare if I’m going to restructure the business model of my practice.”

While Dr. Roussel is still on the fence about the Primary Cares Initiative, he is significantly more enthusiastic than many of his peers in the DPC community who are not considering opting in.

Dr. J.D. Steed, founder of Walden DPC, explains that he will not participate in the initiative because of the administrative burden that it would place on his practice if he were to opt into Medicare. Dr. Steed purposefully left the world of medical coding and data entry to join the DPC movement, as he found that the previous FFS system was often illogical, burdensome, and clinically irrelevant. Walden DPC does not currently accept payment from Medicare because “it is impossible to measure or put a price on the patient-provider relationship that is unique to DPC.”


Dr. Ryan Neuhofel, president of the DPC Alliance, also hoped to be optimistic when first hearing about the Primary Cares First initiative’s impact on the DPC community. However, he is relatively confident that it will be a “non-factor for most DPC doctors” given the history of CMS value-based care initiatives, such as the Comprehensive Primary Care Plus Model, that have failed to bridge the gap between DPC and Medicare. “It’s not going to convince us to participate in Medicare again,” he explained3.

Dr. Neuhofel won’t opt into the initiative for his DPC practice, NeuCare. Like Dr. Steed, he switched to DPC to avoid the administrative burden that accompanies third party payers. Plus, he explains, “DPC isn’t just about the fixed monthly membership fee. While that’s part of it, it’s more about the direct relationship between patient and provider.” He feels strongly that this direct relationship shouldn’t be determined by a Medicare payment schedule, even if it is in the form of monthly fees instead of fee for service. He continues, “For me, it’s always been about demonstrating to the average person that primary care is amazing. That it’s transformational. The rest of it [i.e. third party payments] is just a negotiation with influential entities.”

The list of reservations from other members of the DPC community continues beyond the ones described above. For example, the $50 office-visit reimbursement fee proposed in the Primary Cares First Initiative is about half of what the average primary care physician currently receives for an office visit4. Therefore, physicians may lose significant revenue if they opt in, regardless of patient utilization rate. Providers have come out against the initiative by saying that not only is the pay too little, but it is also unreliable. Like Dr. Roussel, many claim that it will be impossible to preemptively calculate their revenue from Medicare if they opt in because of the lack of information regarding risk calculation and previous health data6. Other providers are doubtful because the economic goals of this initiative (i.e. less hospital spend) will not be realized for many years6.

Is there a place for Medicare in Direct Primary Care?

Dr. Neuhofel’s principle reason for not opting into the Primary Cares First Initiative is that his practice does not accept Medicare and does not plan to do so, regardless of the type of initiatives they propose. This raises the question of whether or not there is a place for beneficiaries of Medicare to receive the type of care that is treasured by the DPC movement.


Many DPC providers, such as Dr. Neuhofel and Dr. Steed, believe that payments from third party payers, such as Medicare, literally go against the model of direct care, where money is only exchanged between provider and patient. Dr. Neuhofel says, “Fundamentally, what most DPC doctors want to see is the patients truly back in control of their healthcare dollars and decisions. Anything that doesn’t do that, as long as the structure of third party payment is involved, isn’t really DPC.”

The DPC alliance, of which Dr. Neuhofel is the president, has commented on the ways in which Medicare beneficiaries could receive Direct Primary Care-level services without going through a FFS payment model or any type of direct Medicare payment7. One of their proposed solutions involves creating Medical Saving Accounts (MSAs) that give patients the power to choose their own practices and pay for them with government funds. Dr. Neuhofel also explains that, contrary to popular belief, Medicare is not free, and often the additional payment plans that fall under Medicare cost more than a DPC membership. In fact, Dr. Neuhofel currently has many patients who are Medicare-eligible but choose to participate in his membership-based payment instead of or in addition to Medicare.

Dr. Neuhofel describes his thoughts on his relationship with Medicare succinctly: “We are growing and we’re successful — why would we opt back into the system we’re fleeing?” Dr. Steed agrees. In the realm of third party payers, “it gets complicated so fast, and we like to keep it simple.” When it comes to coordinating with external parties, Dr. Steed explains, “DPC doctors are rebellious.”

Dr. Roussel, however, falls into a different camp. Regardless of whether he will opt into the specific Primary Cares Initiative or not, he has no plans to opt out of Medicare in his practice. Dr. Roussel explains:

“I want to make my practice work for people who are in their older years. There are DPC practices that ‘make it work’ by opting out of Medicare. If you really want to care for older people who are homebound and in their last years of life, and you opt out of Medicare, you’re going to end up self-selecting for high-income earners. Opting out of Medicare makes it somewhat cost-prohibitive for the elderly. And that’s not the kind of practice I want to run.”

All three physicians emphasize that the payment model they use in their practice comes second to the provider-patient relationship that is their core value proposition. DPC highlights access to patients, longer office visits, and more personalized relationships built on trust. However, payment models are quite an important aspect of the equation that allows for these benefits, and it’s essential to think creatively about the ways that value-based care can integrate with government healthcare payment options. Dr. Roussel asserts, “Value-based care is going to be the future. The question is not if but when. And if value-based care is appropriately incentivized, the model could work out beautifully.”

Initiative Specifics:

Primary care physicians are welcome to opt into the Primary Cares First Initiative if they fit the following criteria:

  • Practice in one of the 26 states/regions where it is offered
  • Are licensed as a primary care practitioner, including those certified in internal medicine, general medicine, geriatric medicine, family medicine, and hospice and palliative medicine
  • Generate at least 70% of their revenue from primary care services
  • Care for at least 125 Medicare beneficiaries
  • Have experience with value-based care
  • Use a certified Electronic Health Record (EHR)
  • Allow for certain capabilities set by CMS, such as “24/7 access to a practitioner or nurse call line and enable patients to a practitioner or care team.”1

CMS has yet to release applications for the Primary Cares Initiative but is planning to begin the program next January. We are curious to see what role this initiative will play in the future of primary care and whether it will be able to give primary care physicians the tools necessary to keep patients healthy and out of the hospital. If you are interested in learning more about this initiative, visit the CMS Website.

The Spruce Angle: The Primary Cares Initiative specifically emphasizes that providers must be able to communicate with their patients at all times. Regardless of whether physicians opt into the initiative or not, the need for a communication platform and phone system is apparent among primary care. Such a system must be both reliable and flexible to meet the demands of diverse practices. Many practices currently use Spruce as a tool to increase and improve communication between patients and providers by reducing administrative overhead and improving practice efficiency. Visit Spruce to learn more.  


  1. CMS.gov. “Primary Care First Model Options.” Primary Care First Model Options | Center for Medicare & Medicaid Innovation, 29 July 2019, innovation.cms.gov/initiatives/primary-care-first-model-options/.
  2. CMS.gov. “Primary Care First: Foster Independence, Reward Outcomes.” CMS, Centers for Medicare & Medicaid Services, 22 Apr. 2019, www.cms.gov/newsroom/fact-sheets/primary-care-first-foster-independence-reward-outcomes.
  3. CMS.gov. “Comprehensive Primary Care Plus.” Comprehensive Primary Care Plus | Center for Medicare & Medicaid Innovation, 24 July 2019, innovation.cms.gov/initiatives/comprehensive-primary-care-plus.
  4. Azar II, Alex M. “Remarks on Primary Care to the American Medical Association.” HHS.gov, U.S. Department of Health & Human Services, 22 April 2019, www.hhs.gov/about/leadership/secretary/speeches/2019-speeches/remarks-primary-care-american-medical-association.html.
  5. Miller, Harold. “The Problems with the CMS ‘Primary Care First’ Payment Model and How to Fix Them.” Center for Healthcare Quality and Payment Reform, CHQPR, May 2019, www.chqpr.org/.
  6. Frieden, Joyce. “Medicare’s ‘Primary Care First’ Program Has Its Skeptics.” Medpage Today, MedpageToday, 29 May 2019, www.medpagetoday.com/practicemanagement/reimbursement/80131.
  7. Roussel, Landon. “The Direct Primary Care Podcast Show.” Stitcher, 18 June 2019, www.stitcher.com/podcast/landon-roussel/the-direct-primary-care-podcast.
  8. Neuhofel, Ryan. “DPC Alliance Comments on CMS RFI on DPC.” DPC Alliance, DPC Alliance, 25 May 2018, dpcalliance.org/blog/2018/5/25/dpc-alliance-comments-on-cms-rfi-on-dpc.
  9. Cohen, Julia, and Ryan Neuhofel. “Primary Cares First.” 24 July 2019.
  10. Cohen, Julia, and J.D. Steed & Mike Mills. “Primary Cares First.” 24 July 2019.
  11. Cohen, Julia, and Landon Roussel. “Primary Cares First.” 25 July 2019.

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