Officials at the federal Centers for Medicare and Medicaid Services (CMS) on Oct. 23 released results from the 2022 performance year for provider organizations participating in what last year as called the Global and Professional Direct Contracting (GPDC) Model, which has now been reintroduced as the ACO REACH (Accountable Care Organization Realizing Equity, Access, and Community Health) model.
Officials have not yet posted the results to the agency’s website, but Healthcare Innovation has obtained the communication of those results from one of the ACO REACH participating organizations.
The communication is as follows:
“CMS is releasing the Performance Year (PY) 2022 financial and quality performance results for the 99 Direct Contracting Entities (DCEs) that participated in the Global and Professional Direct Contracting (GPDC) Model in calendar year 2022, the second year of the model. DCEs in PY2022 generated approximately $870 million in gross savings, representing an approximately 3.7 gross savings rate relative to the retrospective adjusted PY benchmarks.
Net savings generated for Medicare based on the financial benchmark totaled approximately $371.5 million in PY2022 once the benchmark discount and shared savings arrangements were taken into consideration. Approximately 93% of savings were generated from the benchmark discount and the remaining 7 percent of savings were generated from shared savings arrangements. Net payments to DCEs for Shared Savings/Losses totaled approximately $484.1 million relative to the PY2022 financial benchmark. This is an approximately 2.08 percent net savings rate for DCEs on average. Net payments recouped by sequestration was approximately $13.6 million.
Of the 99 DCEs participating in PY2022, 75 DCEs (76 percent) earned shared savings, while 23 DCEs (23 percent) incurred losses. 79 percent of DCEs in the Global risk option and 67 percent of DCEs in the Professional risk option earned shared savings.
Standard, New Entrant, and High Needs Population DCEs achieved 3.37 percent, 7.78 percent, and 15.31 percent gross savings rates on average, respectively; these DCE types achieved 1.84 percent, 5.04 percent, and 12.55 percent net savings rates on average, respectively.
Gross savings increased more than seven-fold between PY2021 and PY2022. The net savings for both CMS and for DCEs also increased significantly. The growth in the number of participants and beneficiary-months in the model largely drove the increased total savings. Net savings to CMS in PY2022 largely stems from the discount for DCEs choosing the Global risk option; 93 percent of savings to CMS comes from the discount.
Improved performance by DCEs that started in PY2021 also drove the increase in savings. The PY2021 Cohort drove 67 percent higher net savings in total, on average, despite the PY2022 Cohort managing approximately 50 percent more spend in total. PY2021 Cohort improved their aggregate net savings rate from 1.30 percent in PY2021 to 3.25 percent in PY2022. The average Total Quality Score (TQS) was 99.4 percent across the 91 Standard and New Entrant DCEs, and 99.0 percent across the 8 High Needs Population DCEs.
80 percent of the DCE quality score in PY2022 was assessed on a pay-for-reporting basis; all DCEs received the full 80 percent.
The remaining 20% of a DCE’s quality score was assessed on a pay-for-performance basis. For PY2022, points were awarded if the DCE performed above the 30th percentile nationally on at least one of the two pay-for-performance quality measures. 81 of 91 (89.0 percent) Standard and New Entrant DCEs and 7 of 8 High Needs DCEs (87.5 percent) met or exceeded the 30th percentile benchmark on one of the two claims-based measures - Risk-Standardized All-Condition Readmission (ACR) or the All-Cause Unplanned Admissions for Patients with Multiple Chronic Conditions (UAMCC).
For comparison, 86.1 percent of similar Standard or New Entrant non-ACO/DCE entities and 86.0 percent of similar High Needs Population non-ACO/DCE entities met or exceeded the 30th percentile for at least one of the two quality measures.
Starting in PY2023, 100 percent of a model participant’s quality score is assessed on a pay-for-performance basis, and the performance percentile achieved will result in more variable total quality scores (vs. receiving full points for meeting or exceeding the 30th percentile). Starting in PY2023, the quality withhold accounts for 2% of benchmark.
These results reflect performance against benchmarks calculated using observed national and regional spending trends and retrospective adjustments based on experience through the Performance Year. The Innovation Center also conducts a separate, independent evaluation of the GPDC Model. The financial results above reflect performance against a forecast informed by a historically aligned population, whereas the evaluation measures what happened in the GPDC population relative to a similar comparison group local to a DCE’s own aligned population whose care was not subject to the Model’s incentives. The evaluation results for PY2022 are expected to become available in mid-2024.
The embargo on the release of the PY2022 financial and quality results is now lifted. DCEs are required to publicly post their quality and finance results.”
NAACOS reacts to positive results
In the wake of the release to the participating organizations, the Washington, D.C.-based NAACOS (National Association of ACOs) released a statement on Monday afternoon, attributed to Clif Gaus, Sc.D., the association’s president and CEO. Here is that statement:
“The Center for Medicare and Medicaid Innovation today released 2022 results for the Direct Contracting Model, which has since been transformed into the ACO REACH Model. NAACOS congratulates the Direct Contracting Entities (DCEs) who earned savings, which was more than three-quarters of those who participated. Collectively, they generated $870 million in gross savings and $484 million in net savings after accounting for shared savings and losses and discounts paid. This represents a nearly 3 percent savings rate for the 99 model participants. Importantly, gross savings increased more than seven times between 2021 and 2022, driven by growth in participation.”
Further, Gaus stated, “These data reaffirm the need to invest in alternative payment models that hold providers accountable for patients’ total cost of care and quality. Direct Contracting offers many innovative flexibilities and waivers to allow providers to effectively manage their patients to deliver the right care, in the right setting, at the right time. For example, the model tests hybrid payment that allows for practices to receive population-based payments rather than fee-for-service payments. Notably, Direct Contracting maintains patients’ freedom of choice and does not impose prior authorization. NAACOS was pleased to see many positive changes to Direct Contracting in ACO REACH, and we are excited to see what results that model delivers. We look forward to working with CMS to bring these learnings to other ACO models, including the Shared Savings Program and future models out of the Innovation Center.”
