Mitigating Leakage Under Primary Care First

All practices that participate in CMS’ Primary Care First (PCF) model have financial penalties assessed each quarter by CMS. These leakage penalties (CMS now calls them “Payment Accuracy Adjustments”,  but we think “leakage” is more accurate) can result in significant reductions to the capitation payments practices receive, and most practices aren’t equipped to track, forecast, or mitigate these penalties on their own. CMS hasn’t done a great deal to help PCF practices in this area, but armed with the right knowledge and technology, practices can take control of their own destiny and improve their financial performance in the model. 

Each quarter, CMS calculates the percentage of primary care visits a PCF practice’s patients receive from providers outside of the practice. That percentage is then deducted from the PCF practices capitation payment that quarter. A typical practice with 1,000 PCF patients that has a 30% leakage rate (the average for PCF practices) loses over $100,000 each year to this penalty. 

Before a practice can take steps to reduce this penalty (thereby growing their revenue in the model), they need to understand what’s driving the problem. The only way to do this is by making use of the claims data (called CCLF files) that CMS provides each month. These files contain raw data on all adjudicated claims for a practice’s aligned PCF patients. These files can easily contain millions of rows of data so practices will need to be able to load them into a database for further analysis, or work with a technology vendor who can do the work for them. 

Once a practice has access to the data, they (or their vendor) will need to apply the same logic CMS does to identify encounters that are considered leakage. Practices can summarize these visits by patient or rendering provider as a first step in identifying primary sources of leakage. There are a handful of common types or causes of leakage, and by grouping the data into those categories, a practice can start to develop a plan on where they will focus. Practices can also segment the data is by categorizing the causes of leakage by the degree to which the practice can impact/reduce the leakage. For example, it is probably much easier to correct the taxonomy of a specialist who is listed in the NPPES database as a primary care provider than to reduce your patients’ utilization of urgent care facilities due to access problems in your practice. Both of these events cause leakage, but focusing on the low-hanging fruit first will create the best returns the fastest. 

PCF practices aiming to reduce their leakage penalties should start small by focusing on a small number of impactful areas, then move on to other areas once there’s been improvement. Practices should also understand that there will always be some leakage (so the goal shouldn’t be 0%), but even a modest reduction in leakage visits can generate tens of thousands of dollars (or more) of additional revenue each quarter. 

Visit the Acclivity PCF page, or download our PCF Leakage Module sheet for more information.

Author:

John Dickey | COO, Acclivity Health Solutions