The U.S. Centers for Medicare & Medicaid Services is retooling the embattled direct contracting payment demonstrations into an Accountable Care Organization (ACO) model. Direct contracting, initiated by the Trump Administration, has come under fire from lawmakers in recent weeks.
CMS is replacing the Global and Professional Direct Contracting (GPDC) model with a program called ACO Realizing Equity, Access, and Community Health (REACH). The agency says the new program reflects its “refreshed” priorities for payment system demonstrations.
The agency is also eliminating the Geographic Direct Contracting Model, which was paused in March 2021.
“The Biden-Harris Administration remains committed to promoting value-based care that improves the health care experience of people with Medicare, Medicaid and Marketplace coverage,” said CMS Administrator Chiquita Brooks-LaSure. “To fulfill that commitment, CMS, through the Innovation Center, is testing new models of health care service delivery and payment to improve the quality of care that people receive, including those in underserved communities.”
CMS has committed to making strides in health equity, indicating that those principles will be a key component of future payment model demonstrations.
The forthcoming REACH program will have a greater focus on addressing health care disparities, the agency indicated, as well as a stronger emphasis on screening and monitoring of model participants to foster transparency and prevent inappropriate coding and risk score growth.
Direct contracting, which was unveiled in conjunction with CMS’ Primary Care First initiative, includes three payment model options that are designed to help the agency and health care providers reduce the cost of care and improve quality.
The models incorporated lessons learned from other programs such as Accountable Care Organizations, the Medicare Shared Savings Program and Medicare Advantage.
Within the direct contracting models, providers bore 100% of the risk associated with eligible patients for the global option or 50% risk with the professional option.
Contracted agencies would have to choose between a Total Care Capitation option or a Primary Care Capitation option. This would be a capitated, risk-adjusted monthly payment for enhanced primary care services equal to 7% of the total cost of care.
Public debate over the models began stirring after Sen. Elizabeth Warren, (D-Mass.), called for the elimination of program, saying that it would leave Medicare vulnerable to what she called “corporate profiteers.”
The remarks brought swift response from supporters of the models, including health care industry groups such as the National Association of ACOs.
Earlier this week, 14 former Obama Administration officials wrote to Health and Human Services Secretary Xavier Becerra requesting that CMS preserve the models.
“We think it is critically important to continue these models, with improvements, and to offer an additional opportunity for organizations to participate in 2023,” the officials wrote. “Furthermore, these models are an important component of reaching CMS’ goal of having 100 percent of Medicare beneficiaries in an accountable care relationship by 2030.”
The ongoing direct contracting models will continue until the end of this year before transitioning to the ACO REACH Model, though CMS pledged “more robust and real-time monitoring of quality and costs” for the duration of 2022.
The first performance year of the redesigned ACO REACH Model will start on Jan. 1, 2023. The demonstration is slated to complete by 2026
