Offsetting Patient-Centered Medical Homes Investment Costs Through Per-Member-Per-Month or Medicare Merit-based Incentive Payment System Incentive Payments

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Abstract

Primary care practices become patient-centered medical homes (PCMHs) to improve care. However, investment costs and opportunities to offset those costs are critical to the decision. We examined potential offsets through commercial payer per-member-per-month (PMPM) payments and the Medicare Merit-based Incentive Payment System (MIPS) for a network that spent $4 818 260 over 4 years obtaining and renewing PCMH recognition for 57 practices. With PMPM payments of $3.37 to $8.98, “breakeven” requires that 2.4% to 6.4% of the network's 1645 commercially insured patients per physician be covered, while applying MIPS incentive payments of half the maximum available each year to the network's average 2016 Medicare reimbursement of $196 812 per physician showed they would exceed PCMH costs by 2022.

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