CMS converts direct contracts to ACO model

In 2023, the global and professional model of direct contracting will be replaced by a more equity-focused and provider-driven accountable care organization model, the Centers for Medicare and Medicaid Services said Thursday.

The agency will also officially retire the Geographic Direct Contracting model it ended last March.

The upgraded model, called the ACO Realizing Equity, Access and Community Health Model (or ACO REACH), includes new health equity requirements, changes in risk adjustment, and additional application evaluation criteria. As with GPDC, the model will be driven by the Medicare and Medicaid Innovation Center.

The CMS announcement came after Direct Contracting, launched by the Trump administration to create previous ACO models, was criticized by progressive lawmakers who objected to Medicare Advantage and the influence of private equity in the program and feared that profit-making motives would put jeopardize patient care. Meanwhile, health care provider associations and some Obama administration health officials have recently urged CMS to keep the GPDC and make changes. GPDC applications have been suspended since last year.

“I believe that the steps we are taking today are indeed the right ones, that we have addressed what we believe are the problems of the past model while ensuring that we rely on our principles.” – CMS Administrator Chiquita Brooks-Lasur . said in an interview with Modern Healthcare. “We are very focused on ensuring that all beneficiaries, all people who are served in traditional Medicare, retain all the rights that are given to them.”

CMS decided to rename the Direct Contracting model to ACO because “no one knows what Direct Contracting means,” Brooks-LaSour said, adding that members also wanted to be called ACOs rather than direct contracting organizations. The CMS has been in contact with lawmakers, vendors, beneficiaries and other stakeholders while creating the updated model, officials said.

The ACO National Association appreciated the decision to keep the basics of the model.

“Many of the criticisms of the direct contract were the result of a great misunderstanding of the model and a general shift towards cost-based payment. Instead, maintaining the model with an additional focus on fairness, strengthening supplier governance, improvements in risk adjustment, and other changes. better to move forward,” the organization said in a statement.

Other observers of value-based care also welcomed the decision. Gary Jacobs, executive director of VillageMD’s Center for Government Affairs and Public Policy, was particularly pleased to see health equity initiatives and called the new model a solid blueprint that would allow the organization to focus on delivering primary health care to all Americans. Kristen McGovern, partner at Sirona Strategies, said the changes bring the model in line with earlier ACO experiments while maintaining unique differences that are important to test.

But some opponents of a direct contract want further changes. Rep. Pramila Jayapal (R-Wash.) led dozens of lawmakers in letter last month urged CMS to end the program. CMS needs to do more to protect traditional Medicare, she said in a statement Thursday.

“Trump-era direct contracts are a major threat to Medicare coverage hidden in the bureaucracy,” Jayapal said. “While I am pleased to see the administration taking steps to change this erroneous program, I am disappointed that these changes will not be in place within 10 months and that there is no limit to the number of seniors involved in this pilot model. More needs need to be done and I will continue to do my best to fight any attempt to privatize Medicare.”

This spring, CMS will accept applications from the first group of ACO REACH participants, which is scheduled to start on January 1, 2023. Current GPDC participants may continue to participate in ACO REACH if they agree to meet all requirements of the new model by the start. Date of. The new model will be valid until 2026. The agency may consider limiting the size of the model, as some stakeholders, including Jayapala, have called for, but CMS needs active participation to evaluate the program, a senior CMS official said.

ACO REACH will offer the same global and occupational risk sharing pathways as GPDC, and participation in the model will continue to be divided into standard ACOs, ACOs for new members, and ACOs for high need populations, depending on the organization’s previous experience and number patients.

But ACO REACH will differ from GPDC in several other ways.

ACO REACH requires participants to develop a Health Equity Plan that identifies disparities in health status and specifies actions to mitigate them. Participants should collect beneficiary-reported social needs and demographic data, and a new adjustment to health equity benchmarks will help support care delivery and coordination for beneficiaries in underserved communities. The model introduces a new benefit expansion that expands the range of services that nurse practitioners can order to also increase access to services.

According to the CMS program comparison sheet, the GPDC model did not include explicit health equity policies.

The new model also increases the influence of suppliers and beneficiaries in the participating organizations, as requested by the supplier groups. Providers will be required to oversee at least 75% of the REACH ACO’s governing boards, compared to 25% in the GPDC. This could alleviate some concerns about which groups might fit into the model, the senior official said.

In addition, CMS reduces the quality retention for members from 5% in GPDC to 2% in ACO REACH and lowers the discount rate for global ACOs in subsequent years. However, the new model does not make changes to the benchmarking system to generate overall savings, which some stakeholders believe favors new entrants to CMMI risk models.

CMS has also tightened the criteria for applying for REACH ACOs. The agency will not explicitly prevent insurers or investor groups from filing applications — just like a government agency, CMS cannot arbitrarily block participant groups, the senior official said. Applications will be evaluated on demonstrated records of direct patient care, as well as records of service to vulnerable communities and the achievement of quality outcomes. Applicants will also be assessed for potential program integrity risks posed by ACO owners and parent companies.

CMMI also changed the program’s risk adjustment policy. Progressives are concerned that the GPDC leaves businesses free to abuse risk adjustment. In the future, CMS will take into account changes in population demographics while limiting the growth of the risk score for each individual ACO. CMS also plans to continue to ensure that model scores do not increase faster than those for non-ACO REACH traditional Medicare beneficiaries.

The rise in coding intensity is a major problem in the Medicare Advantage program, the official said during a press conference on Thursday. The model could give CMS more information on how to limit the growth in Medicare Advantage coding in the future, the official said.

The agency will also address issues of model transparency. CMS has published data on current GPDC participants and will further share summary information such as the number of agreed beneficiaries, as well as information on quality and financial performance based on operational and actuarial data. CMS plans to share information on payments to model participants on a quarterly basis.

Brooks-LaSure expects this transparency to be the new normal for CMMI models.

“It is important that people understand and know what is happening. Transparency also helps us build trust, which is a priority for us at CMS,” she said.

The agency will closely monitor member compliance and evaluate annually how beneficiaries move into or out of the Medicare Advantage program, verify ACO coding is correct, investigate anti-competitive behavior and misuse of beneficiary data, and conduct regular reviews of ACO contracts with providers to learn about further actions. orders.

CMS is looking forward to receiving further feedback on the new model. If significant adjustments need to be made in subsequent years, CMS will take them into account, the senior official said.

“We continue to learn lessons,” Brooks-Lasur said. “We’ve been engaging directly with stakeholders over the last couple of months and the changes we’re making really reflect what we’ve heard. And that’s the role of the Innovation Center – to test, find out what works, and when it works, try to move it into a traditional Medicare and Medicaid program.”

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