NAACOS wants more details, changes to direct contracting payments

Members of the nation’s largest association for accountable care organizations have asked CMS to make some suggested changes to the new direct contracting payment models and release additional details. Not doing so could “derail” the new payment reform, according to the National Association of Accountable Care Organizations (NAACOS).

CMS released first details about the direct contracting payment model toward the end of 2019 and also opened up applications for the first implementation period. Direct contracting covers three voluntary payment models for Medicare fee-for-service organizations to participate in risk-sharing arrangements. Direct contracting was included in a set of new payment models­, called the Primary Care Initiative, announced in April 2019.

Just weeks after the model information was released, NAACOS assembled a taskforce to make tools and resources available and assess the impact of direct contracting.

While NAACOS is generally supportive of direct contracting, the organization expressed concerns and suggestions to Brad Smith, director of the Center for Medicare and Medicaid Innovation (CMMI). Specifically, NAACOS is concerned that not all the program details for direct contracting, which builds off the Medicare Shared Savings Program (MSSP), have been released. Participants may need more time to understand the rules and impact of the model once these details are released.

“Direct Contracting was released with great fanfare and excitement, but the provider community is still lacking key information, such as that of the financial structure on which the model is based,” Clif Gaus, ScD, NAACOS president and CEO, said in a statement. “We also hope other important aspects can be adjusted to ensure that robust early interest in the model translates to high participation.” 

In addition, NAACOS believes CMMI should minimize the levels Medicare keeps for itself to capture savings for the program and improve the chances for providers to earn savings. NAACOS also took issue with the 2% retention withhold, which is the penalty an organization would pay if they drop out of the program before the second year. NAACOS also wants participants to be able to participate in both a High Needs and Standard Direct Contracting Entity; urges CMMI to increase the shared savings rate to 75% in direct contracting to “make it an attractive option” for those not in full risk bearing arrangements; and asks CMMI to allow Primary Care First practices to terminate their participation in that model without penalty to participate in direct contracting.

“Many ACOs and provider groups will apply for MSSP as well as Direct Contracting so that they can make an educated decision once they have the necessary information. Not providing more information up front creates more administrative burden for providers and the agency,” the letter reads. “Without these details and answers to lingering questions, MSSP or non-participation in alternative payment models would be a more attractive and stable option compared to Direct Contracting.” 

NAACOS also wants additional application cycles for organizations to participate in direct contracting in 2022 and later, the association noted.

Editor's note: This article has been updated from a previous version that suggested NAACOS asked CMMI for a delay of the direct contracting models. The association did not.