Former Obama Appointees Urge HHS, CMS to Continue Direct Contracting

A group of former appointees under the Obama administration are urging federal officials to preserve the Global and Professional Direct Contracting model, stating that the model helps accountable care organizations (ACOs) provide more affordable, quality care to Medicare beneficiaries.

In a letter to HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure, which RevCycleIntelligence received via email, the 14 former appointees highlighted the benefits of the Direct Contracting program and why the agencies should consider its continuation.

The letter included signatures from a handful of healthcare stakeholders, including Andy Slavitt, former interim CMS Administrator, Tim Gronniger, president and chief executive officer of Caravan Health, and Mara McDermott, executive director of Value Based Care Coalition. 

Under the Direct Contracting model, healthcare organizations—known as Direct Contracting Entities (DCEs)—can participate in alternative payment models that offer quality improvement incentives and capitated payments for care coordination in Medicare fee-for-service (FFS).

The model is the leading ACO from the CMS Innovation Center (CMMI) and builds upon the Medicare Shared Savings Program (MSSP) and the Next Generation ACO, which ended in December 2021.

The Direct Contracting program could help MSSP ACOs provide more affordable, quality care to Medicare beneficiaries, the group stressed in the letter. Under the Global and Professional risk models, beneficiaries have the freedom of choice to see any Medicare provider and are not subject to prior authorization or other utilization management techniques.

MSSP, Direct Contracting, and other ACO models have helped boost care coordination, reduce waste, and improve outcomes for Medicare beneficiaries, the groups said.

“The ACO models, including Direct Contracting, address the fragmentation and duplication of services that so many of us have witnessed and that are well-documented in FFS systems,” the letter stated. “Using waivers available from the Innovation Center, Direct Contracting Entities, and ACOs can address the social determinants of health by providing additional benefits and services beyond those available in traditional FFS Medicare.”

The group also noted that continuing the Direct Contracting program would help further the shift to value-based payment models and move the industry away from FFS payments. According to the letter, the Direct Contracting model’s payment approach will enable providers to invest in their communities and address health equity by expanding access to care for underserved populations.

The groups touched upon what they said is the apparent politicization of the payment model.

“While Global and Professional Direct Contracting have been characterized as Trump Administration models, the fact is that they build on ACO models spanning four administrations and across an array of political viewpoints,” the letter stated.

The group expressed support for CMMI and testing and developing healthcare payment models to improve care quality and low healthcare costs. The former appointees acknowledged that some adjustments to the Direct Contracting model might be necessary to continue the program.

Maintaining the models is critical for CMS to reach its goal of having 100 percent of Medicare beneficiaries in an ACO by 2030, they said.

“We also think that continuation of Global and Professional Direct Contracting is vital to the future of the Innovation Center’s value-based care agenda, one of the crowning achievements of the Affordable Care Act that we all worked so hard to pass, implement, and protect,” the letter concluded.

Recently, more than 200 healthcare organizations, including the National Association of ACOs (NAACOS), expressed their support for the Direct Contracting model and asked HHS to make changes to the program instead of terminating it. Suggested changes included limiting entity participation, adding more beneficiary protections, and changing the model’s name.

Direct Contracting opponents have argued that the model is a pathway to privatizing Medicare, as many DCEs are privately-owned networks. In January, more than 50 lawmakers urged the Biden administration to discontinue the Direct Contracting model, stating that the model offers financial benefits to DCEs but does not improve patient care.