What might direct contract changes look like?

As the Centers for Medicare and Medicaid Services prepare to decide on the future of direct contracts, the agency will have to weigh how it can ease progressives’ fears of speculation and respond to calls for a more provider-centric program.

CMS said on Sunday that a decision will be made “soon” on the future of Direct Contracting. Physicians for the National Health Programme, a group strongly opposed to direct contracts, continues to urge officials to permanently shut down the entire program by sending the agency letter on Tuesday.

Even though outright cancellation of the program is the worst-case scenario for value care advocates, this is considered by many to be unlikely.

According to David Ault, a consultant who works with provider groups and direct contracting organizations and a former head of financial risk at the Center for Medicare and Medicaid Innovation, direct contracting organizations have invested heavily to participate in the program. “If an agency can just kick the ground out from under its feet essentially for no good reason other than politics, it will effectively kill the Innovation Center,” he said.

If CMMI continues with the program, changes to the global and professional direct contracting model are all but guaranteed, both to compromise with progressives and because it is a natural evolution of the CMMI model, according to Ault and other experts. The GPDC builds on previous Accountable Care Organization demos, offering higher levels of risk and greater reward opportunities. CMMI currently has new applications for the paused program.

progressives worry Direct contracts allow too many non-providers to participate in a value-based care program and that these organizations will prioritize profit over patient care. Direct Contracts were specifically designed to encourage organizations that do not have significant experience in caring for Medicare beneficiaries on a fee-for-service basis to enter into cost-based care arrangements, according to CMMI’s 2020 report to Congress.

But it is unlikely that CMS will limit participation to certain types of organizations.

“If you start drawing lines around things and seeing some things as good and others as bad, pretty soon you’ll be left without model contributors because you’re generally excluded,” said Mara McDermott, VP of McDermott + Consulting, who runs Value Based. Caring Coalition.

CMMI can make the model more vendor-centric through other means. Supporters and opponents of direct contracts proposed several potential changes to the agency since the creation of the model.

Here’s an example of what experts think might happen to the model next:

Increasing incentives for supplier participation. Provider associations want CMMI to reduce the mandatory discount in the global track, which collects a percentage of the organization’s benchmark, so that CMS can save on the model. The model will eventually implement a 5% discount rate in its fifth year of operation, the National ACO Association said in its report. july letter that CMMI should keep the rate at 2%, which is what the next generation ACO used. Next Gen was discontinued because it didn’t save CMS money. But NAACOS suggests that lowering the discount rate for Global Direct Contracting will result in savings by incentivizing more participation in the model as a whole.

Increasing total savings in the professional version to 75% could also encourage more vendors to participate, the groups say.

Level the playing field. CMMI may change the benchmarking system to generate overall savings. Benchmarking The GPDC currently favors new entrants to CMMI risk models over organizations that have previously participated in ACO tracks. New members’ benchmarks are based on Medicare Advantage price lists, while previous members’ benchmarks are based on their previous performance improvement efforts. It raises the standards for these former ACOs.

Ask providers. The Center may require that the governing body of the direct ordering organization include more physicians to address concerns about the influence of insurers or private companies. The current guidelines require that 25% of the governing body be made up of participating vendors. CMMI could push that figure up to 50% or even 75%, said Valinda Routledge, executive vice president of federal affairs for America’s Physician Group.

Correct risk adjustment. Progressive organizations fear that they may abuse risk adjustments in direct contracts. Although the GPDC sets limits on diagnostic coding, there are exceptions to these limits that may benefit new entrants such as insurance companies or investor support groups. According to McDermott, CMMI can close these loopholes or fix other failures, such as how the current system changes risk adjustment based on how the entire group of organizations is performing. When traditional vendors that aren’t used to coding to adjust for risk are pitted against organizations with a lot of practice, strong coders will have an edge, she says.

Limit the size of the model. Senator Elizabeth Warren (D-Massachusetts) said during a Senate Finance Subcommittee hearing earlier this month, up to 30 million of the 36 million beneficiaries currently enrolled in traditional Medicare could end up joining a direct contractor. Ault and others dispute this number, and the NAACOS expects this figure will approach 2 or 3 million over the course of the program.

But insurer-led organizations that have active contracts with providers as part of their MA plans could theoretically incentivize providers to drop their ACO membership and join the insurer’s direct contracting body, taking all their patients with them. CMMI should cap the size of GPDC at 1.3 million beneficiaries, roughly the size of the ACO Next Gen model, former CMS administrator Donald Berwick and former CMMI director and health executive Rick Gilfillan wrote in Health Affairs. The pair suggests that CMMI may also implement a number of other fences.

Rebranding or refinement. Value-based care stakeholders argue that GPDC is essentially ACO under a different name. NAACOS said in a press release accompanying a letter it sent to officials Monday night that the rebranding and name change for GPDC could highlight the model’s place in the evolution of accountable care.

“You need CMMI to be flexible and have the ability to experiment, and I think [GPDC] into the ACO family links what we do more clearly. We are formulating the goal of the health care reform movement,” McDermott said.

On the other hand, detractors point out that Direct Contracting was created with the express intention of attracting new organizations to traditional Medicare. Berwick and Gilfalin said CMMI should be made clear that direct contracts are its own experiment and not a replacement for ACO. According to Gillfalin, CMMI should create an alternative path for advanced ACOs that includes capitation.

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