51 Organizations Join New Direct Contracting Opportunity from CMS

CMS recently announced that 51 organizations will take part in a new directing contracting opportunity that will test what the agency calls the “next evolution of risk-sharing arrangements.”

The organizations, which are largely medical groups and accountable care organizations (ACOs), will participate in the implementation period of the Direct Contracting model between October 1, 2020, through March 31, 2021.

The implementation year is in place to help the participants who will be known as Direct Contracting Entities (DCE) to prepare for the first performance year that starts on April 1, 2021.

The first cohort of DCEs will serve Medicare fee-for-service beneficiaries in 39 states, as well as the District of Columbia and Puerto Rico, CMS reported in the announcement.

The Directing Contracting Model is a set of three voluntary payment model options that aim to reduce costs while maintaining or improving quality of care through groups of providers who agree to coordinate the care fee-for-service Medicare beneficiaries, including those who are high needs.

The model builds on Medicare’s ACO efforts, including the Next Generation ACO Model, which was slated to sunset at the end of the year until CMS extended the model because of COVID-19.

However, the Direct Contracting Model options are aimed at more than ACOs, CMS says. Although Direct Contracting is an opportunity for ACOs to deepen their participation in Medicare risk arrangements, the agency explains on the model’s website, the model looks to attract a wide variety of organizations, including those who have not previously participated in models run by the CMS Innovation Center (CMMI).

The model also includes the highest financial risk and reward levels compared to previous and existing CMMI models. DCEs in the professional payment track have 50 percent shared savings and losses rates, while those in the global payment track have 100 percent shared savings and losses rates.

DCEs in the professional track also receive risk-adjusted, monthly capitation payments for enhanced primary care services. Under the global tack, DCEs can earn either the primary care capitation payment or a total care capitation payment that covers all the services provided by participants and preferred providers.

The first cohort will participate in both payment tracks, CMS stated.

The list of over 50 organizations participating in the model during the implementation period is a good sign, according to the National Association of ACOs (NAACOS).

“This initial Direct Contracting cohort demonstrates strong interest in this new model,” the association said in a statement. “These initial participants should be commended for their commitment to improving the quality of care for Medicare patients while lowering spending.”

NAACOS has expressed concerns about accountable care model participation in the past. The association has pushed for an extension of the Next Generation ACO Model beyond the new 2021 performance period considering model savings.  

The Direct Contracting Model, however, is the next step for accountable care models, NAACOS acknowledges. But programmatic changes are needed to ensure legacy ACOs “have a level playing field to participate,” the association recently argued.

CMS just recently published a document of frequently asked questions (FAQs) relating to the financial details of the model. The document covers questions on benchmarking, capitation, risk-adjustment, reconciliation, and rates.

Industry groups like NAACOS have been calling on CMS to release more details on the financial specifications of the Direct Contracting Model, arguing that the lack of information would impact provider participation in the model.

But groups have also asked CMS to consider programmatic changes, such as an increased shared savings rate for professional DCEs, lower discount levels for DCE benchmarks, and a waiver for the 2 percent retention withhold.

These changes would make the Direct Contracting Model more attractive to ACOs.

To view a complete list of organizations participating in the model during the implementation period, click here. There will also be more opportunities for providers to participate in the model when it launches next year.