On Nov. 25, the federal Centers for Medicare & Medicaid Services (CMS) published on its website a large amount of information about the direct contracting models that it will be opening up for physician participation beginning exactly a year from Monday. The entire document is available on the agency’s website.
As the agency’s press release stated:
“Direct Contracting creates a new opportunity for the Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center) to test an array of financial risk-sharing arrangements to reduce Medicare expenditures while preserving or enhancing the quality of care furnished to beneficiaries. Direct Contracting leverages lessons learned from other Medicare Accountable Care Organization (ACO) initiatives, such as the Medicare Shared Savings Program and the Next Generation ACO (NGACO) Model, as well as innovative approaches from Medicare Advantage (MA) and private sector risk-sharing arrangements. This model is part of a strategy by the CMS Innovation Center to use the redesign of primary care as a platform to drive broader health care delivery system reform.
Direct Contracting creates a variety of pathways for health care providers and suppliers to take on financial risk supported by enhanced flexibilities. Because the model reduces burden, supports a focus on complex, chronically and seriously ill patients, and aims to encourage organizations to participate that have not typically participated in Medicare fee-for-service (FFS), Innovation Center models, or both, we anticipate that this model will appeal to a broad range of physician organizations and other types of health organizations. Direct Contracting provides an opportunity to participate in a value-based care arrangement under Medicare FFS for health care providers that have not previously been eligible for the Shared Savings Program, the NGACO Model, or both due to an insufficient number of assigned or aligned Medicare FFS beneficiaries. In addition, Direct Contracting offers another model option for NGACO Model participants to consider after NGACO ends in 2020.
CMS will test two voluntary risk-sharing options in Direct Contracting: (1) Professional, a lower-risk option (50% Shared Savings/Shared Losses (SS/SL)) and Primary Care Capitation (PCC) equal to 7% of the total cost of care benchmark for enhanced primary care services; and (2) Global, a full risk option (100% SS/SL) and either PCC or Total Care Capitation (TCC). Additional information will be provided at a later date regarding a third option that CMS is considering offering, the Geographic option, which is a full risk option (100% SS/SL) for the total cost of care of all Medicare FFS beneficiaries in a defined target region.
The goals of Direct Contracting are to transform risk-sharing arrangements in Medicare FFS, broaden participation in CMS Innovation Center models, empower beneficiaries, and reduce health care clinician burden. The Model options seek to align financial incentives, provide a prospectively determined and predictable revenue stream for participants, and put a greater emphasis on beneficiary choice.”
The press release also noted this, asking the question, “Who can participate in Direct Contracting model options?”:
“A key aspect of Direct Contracting is providing new opportunities for a variety of different organizations (Direct Contracting Entities or DCEs) to participate in value-based care arrangements in Medicare FFS. In addition to organizations that have traditionally provided services to a Medicare FFS population, Direct Contracting will provide new opportunities for organizations without significant experience in FFS to enter into value-based care arrangements.
Under Direct Contracting, there will be three types of DCEs with different characteristics and operational parameters. These three types of DCEs are:
1. Standard DCEs – DCEs comprised of organizations that generally have experience serving Medicare FFS beneficiaries, including Medicare-only and also dually eligible beneficiaries, who are aligned to a DCE through voluntary alignment or claims-based alignment. These organizations may have previously participated in section 1115A models involving shared savings (e.g., Next Generation ACO Model and Pioneer ACO Model) and/or the Shared Savings Program. Alternatively, new organizations, composed of existing Medicare FFS providers and suppliers, may be created in order to participate as this DCE type. In either case, clinicians participating within these organizations would have substantial experience serving Medicare FFS beneficiaries.
2. New Entrant DCEs – DCEs comprised of organizations that have not traditionally provided services to a Medicare FFS population and that will primarily rely on voluntary alignment, at least in the first few performance years of the model. Claims-based alignment will also be utilized.
3. High Needs Population DCEs – DCEs that serve Medicare FFS beneficiaries with complex needs, including dually eligible beneficiaries, who are aligned to the DCE through voluntary alignment or claims-based alignment. These DCEs are expected to use a model of care designed to serve individuals with complex needs, such as the one employed by the Programs of All-Inclusive Care for the Elderly (PACE), to coordinate care for their aligned beneficiaries.”
