CMS Issues New Rules for ACO Direct Contracting Model

The Centers for Medicare and Medicaid Services (CMS) recently issued a request for applications (RFA) for two of the three voluntary payment model options, specifying how accountable care organizations can apply to participate in the professional and global options of Direct Contracting (DC).

Defined within DC are three different tracks including, professional, global and geographic, the latter is not applicable to the Nov. 25 RFA.

DC is built upon agency initiatives, such as the Medicare Shared Savings Program and the Next Generation ACO model; it is a set of voluntary payment model options with the goal of reducing Medicare fee-for-service (FFS) beneficiary costs and improving the quality of care.

The three payment model options are expected to reduce bureaucratic burden for physician practices and rewards participants for taking on more risk, according to CMS.

CMS defines the three payment model options as the following:

• Professional: Offers the lower risk-sharing arrangement of 50% savings/losses and provides primary care capitation, which is a capitated, risk-adjusted monthly payment for enhanced primary care services
• Global: Offers the highest risk sharing arrangement of 100% savings/losses and provides the option of primary care capitation or total care capitation.  Total care capitation is a capitated, risk-adjusted monthly payment for all services provided by Direct Contracting participants and preferred providers with whom the entity has an agreement
• Geographic: Offers potential participants the opportunity to assume responsibility for the total cost of care for all Medicare FFS beneficiaries in a defined target region.

The DC risk-based contracts are to begin in 2021 and the program will be available to a broader spectrum of organizations, such as Federally Qualified Health Centers and rural health clinics, which were not allowed to participate in earlier ACO models.

The National Association of ACOs (NAACOS) issued a statement on DC RFAs in November conveying a positive reaction to the news. The group’s President and CEO Clif Gaus said the association is, “excited to see CMS demonstrating its commitment to value-based care and payment by moving forward with accountable care models like Direct Contracting, which make providers accountable for patients’ total cost of care.”

Check out the CMS fact sheet on direct contracting for more information.

Also, take a look at this CMS page on DC model options.

Global and Professional models begin with an optional implementation period in 2020, but no change to payments will be made during this period. The first performance year will be 2021, running through 2025. Applications are due Feb. 25, 2020 for interested organizations.

To read more about DC options, check out Managed Care Mag and Health Leaders Media.

Take a look at The National Law Review for a more in-depth look at the models.