ACOs Need More Info on New Direct Contracting Model

Applications for the upcoming Direct Contracting Model are due by the end of the day, but the National Association of ACOs (NAACOS) is saying providers do not have enough information on model specifics to make a decision on participation.

Providers need more details on how the model will align with existing programs, the financial methodology, benchmarking, and other aspects of the forthcoming model, the group explained in a Feb. 20 letter to the CMS Innovation Center.

“Without these details, it’s impossible for the healthcare community to make informed decisions about program participation,” wrote Clif Gaus, ScD, NAACOS president and CEO, in the letter.

By the end of the day today, CMS is closing the application cycle for the implementation period of the Direct Contracting model, which is slated to start this year as a precursor to the first performance year in 2021, according to the federal agency’s Request for Applications. Applications for the first performance year will be due later this year.

NAACOS urged CMS to release the information as soon as possible, warning the agency that failing to provide more model details could make the Medicare Shared Savings Program (MSSP) or even non-participation in alternative payment models “more attractive and stable option compared to Direct Contracting.”

CMS announced the Direct Contracting Model last April. The five-year model is a set of three voluntary payment model options that aim to reduce spending while maintaining or improving quality of care for Medicare fee-for-service beneficiaries through risk-sharing agreements – 50 percent shared savings and losses and a global model with 100 percent risk sharing.

Both risk-sharing options include capitated payments. But NAACOS said that CMS has yet to divulge how participants will be able to use the payments, including what they will and will not be allowed to do with the money.

Potential participants are also lacking key details benchmarking and risk adjustment methodologies, including the new HCC methodology and how CMS will make adjustments to the Medicare Advantage Rate Book for benchmarking.

NAACOS also wants more information on how beneficiaries will be attributed to participants in the model, especially in relation to other alternative payment models. Direct Contracting Entities need this information as soon as possible to make participation decisions since beneficiary attribution will greatly impact benchmarks.

“Because of the lingering questions and compressed application time frame, we urge CMS to create additional application cycles for DCEs to start in 2022 and later, giving them time to analyze the program and their participation options,” NAACOS recommended in the letter.

Aligning the application cycle for the Direct Contracting Model with the MSSP cycle would also present ACOs from being forced to decide on participation in one model without having all the information they need for the other.

The ACO group also advised CMS to make key changes to the upcoming model to make it more attractive to providers deciding on it or the MSSP. The recommendations included:

• Increase shared savings rate for professional DCEs to 75 percent
• Decrease discount levels (91 percent of benchmark in 2021, 93 percent in 2022, and 90 percent in 2025 for global DCEs)
• Waive the 2 percent retention withhold
• Allow participating providers to dually participate in both a high-needs and standard DCE
• Release the algorithm used to identify high-needs patients
• Stop allowing specialists to take responsibility for attributed patients when no primary care physician is available
• Grant DCEs access to the HIPAA Eligibility Transaction System for real-time eligibility checks

The Direct Contracting Model is a logical next step for Next Generation ACOs that are facing the sunsetting of the program this year. The model will still allow the ACOs to take accountability for the quality and costs for an entire population of patients through greater levels of financial risk compared to Medicare’s flagship ACO program, the MSSP.

The Direct Contracting Model was received with fanfare and excitement, NAACOS pointed out. Providers applauded the model’s commitment to value-based care and payment through accountable care models.

However, absent more information, industry groups like NAACOS are concerned that risk-bearing providers like Next Generation ACOs will be steered to alternative payment models with less accountability.