CMS details direct contracting models

CMS issued more details and opened up applications for its upcoming direct contracting models that draw lessons from accountable care organizations and aim to promote shared risk. The agency opened up the application period for the direct contracting options for the first implementation period on Nov. 25, 2019.

The direct contracting models were included in a set of new payment models known as the Primary Cares Initiative in April 2019, though talk of direct contracting has been ongoing for a few years, with CMS requesting comments on potential models from the industry.

Direct contracting includes three voluntary payment models for Medicare fee-for-service that allow organizations participating with CMS to test out risk-sharing arrangements. According to CMS, the three pilot models build on lessons learned in the Medicare Shared Savings Program (MSSP) and the Next Generation ACO model, as well as Medicare Advantage and risk-sharing arrangements in the private healthcare sector. The direct contracting offers a way for organizations to participate in risk-sharing arrangements outside of the MSSP or after the NGACO ends in 2020.

The National Association of ACOs (NAACOS) was on board with the details, as the Next Gen ACO model had many significant changes for participants and a lower participation result.

“NAACOS is pleased to see CMS give Next Gen ACOs the option to continue in the program until it sunsets at the end of next year,” Clif Gaus, ScD, president and CEO of NAACOS, said in a statement.

The direct contracting model as a concept has generally been applauded by industry groups looking for more value-based care arrangements, though the model has drawn a mixed or even negative review from others.

CMS is planning to test two direct contracting models:

  • Professional, which is a lower-risk option with 50% shared savings/shared losses and primary care capitation of 7% of the total cost for the care benchmark for enhanced primary care services.
  • Global, which is a full-risk model with 100% share savings and losses with wither PCC or total care capitation.
  • The capitation models will offer a payment from CMS to the participants that can be used to support population health and enable the participants to participant in value-based payment arrangements with downstream partners in the care continuum.

The agency will offer information about a third option under consideration, the geographic option, “at a later date,” CMS said.

There are three types of participants who can engage in the direct contracting models, called direct contracting entities or DCEs:

  • Standard DCEs––organizations with substantial experience serving Medicare FFS beneficiaries, with Medicare-only or dual eligibles, or as ACO participants.
  • New entrant DCES––organizations that have not traditionally provided services to Medicare FFS beneficiaries and will primarily rely on voluntary alignment within the first few performance years of the model.
  • High needs population DCEs––those that serve Medicare FFS beneficiaries with complex needs, including dual eligibles. These participants will be expected to use care coordination models, such as the Programs of All-Inclusive Care for the Elderly (PACE).

CMS is testing the models through its Innovation Center under the section 1115A waivers. CMS will open a second application period in Spring 2020 for the first performance year.