Overview
Primary care sub-capitation rates are risk adjusted using the Primary Care Effort Model (PCEM) so that TIN-level funding better reflects differences in the expected primary care needs of attributed members. This adjustment does not change total funding for primary care. Instead, it redistributes funding within a practice type and population category so that TINs with higher expected primary care-related effort receive, on average, higher payments, while TINs with lower expected effort receive, on average, lower payments.
The PCEM was first applied beginning in 2025 to the practice’s payment without the enhanced tier amount. The enhanced tier per-member per-month payment is not risk adjusted.
How the Model Was Developed
MassHealth developed the Primary Care Effort Model to estimate differences in expected primary care need across members. The model focuses on primary care, not a member’s total health care costs. To build the model, MassHealth defined the dependent variable, or the costs that the model is trying to predict, to be only the services included in the Primary Care Sub-Capitation (Sub-Cap) Program. This helped ensure that the model reflects the type of care funded through primary care sub-capitation.
The model uses member-level diagnoses and other factors to estimate expected primary care effort. The key factors that drive the model include:
- Chronic conditions: During model development, MassHealth found that primary care costs rise meaningfully as a member’s number of chronic conditions increases. To account for this relationship, PCEM uses Aggregate Condition Categories (ACCs) from its underlying diagnosis-based model (DxCG by Cotiviti). ACCs group diagnoses into 31 clinical systems and conditions, allowing the model to create variables that capture how costs increase when members have multiple chronic conditions.
- Behavioral Health conditions: Although behavioral health codes are not included in the primary care sub-capitation code set, MassHealth found that behavioral health conditions, particularly opioid use disorder, are strongly associated with greater primary care effort. This relationship was reflected in improved model prediction and significant positive coefficients for these conditions. This suggests that even when behavioral health spending occurs largely outside the Sub-Cap program, members with behavioral health conditions may still require more primary care resources. These behavioral health coefficients are separate from, and mutually exclusive with, the ACC variables.
The complete list of variables included in the model can be found in the attached white paper below.
MassHealth Primary Care Effort Model (PCEM) White Paper: PDF | Word
Application in Rates
MassHealth uses the Primary Care Effort Model to risk adjust primary care sub-capitation rates during rate setting. First, MassHealth calculates PCEM risk scores for each attributed member. Then, MassHealth combines these member-level results across all members attributed to a TIN. This produces an overall expected primary care effort score for the TIN’s member panel.
The TIN’s score is compared with the average score for other TINs in the same practice type and population category. This comparison is used to adjust the TIN’s base primary care sub-capitation rate. TINs with higher-than-average expected primary care effort receive an upward adjustment, while TINs with lower-than-average expected primary care effort receive a downward adjustment.
For more technical details on the model, see the attached white paper below.
MassHealth Primary Care Effort Model (PCEM) White Paper: PDF | Word
In addition, MassHealth published a blog post on key findings of the model on the Center for Health Care Strategies Website.