Non-Binding Letters of Interest due December 21, 2020; Applications are due April 2, 2021
CMMI’s new voluntary Direct Contracting Model: “Geo,” is the most substantive alternative payment program launched to date and likely the bridge for Medicare’s transition from fee-for-service to value-based payments to providers.
- Geo includes unique latitude to allow providers to differentiate their care coordination strategies and optimize Traditional Medicare managed care.
- Geo is a viable complement to organizational strategies around Medicare Advantage and shared risk contracts with commercial populations.
- Direct Contracting opens a clear path to Medicare FFS lives for traditional managed care organizations who have excelled in MA.
In April 2019, the Center for Medicare and Medicaid Services (CMS) announced the Direct Contracting program, an alternative payment model that delegates management to “direct contracting entities” to care for Medicare fee for service enrollees on a capitated basis. It has been tested by 51 organizations in a trial implementation that started last October and CMMI is expanding the program to new participants PY 2022.
In CMS, Direct Contracting (DC) has four aims:
- Transform risk-sharing arrangements in Medicare FFS by offering both capitated and partially capitated population-based payments that move away from traditional FFS.
- Broaden participation in CMS Innovation Center models by allowing model participation by organizations new to Medicare FFS, such as physician managed organizations that currently operate exclusively in the MA program, Medicaid MCOs that provide Medicaid benefits for full-benefit dually eligible beneficiaries, and innovative, new organizations that seek to assume responsibility for Medicare FFS beneficiaries in a geographic target region.
- Empower beneficiaries to engage in their care delivery through voluntary alignment and potential benefit enhancements.
- Reduce provider burden to meet health care needs effectively, through for example, a smaller set of core quality measures and waivers to facilitate care delivery.”
Thus, Direct Contracting is widely considered the government’s bridge from Medicare fee-for-service to value-based contracting for Medicare.
Up until December 2020, CMMI/CMS has been focused on deploying the first two announced models in DC: the professional and global models. These models are most similar to the existing ACO models, such as the Medicare Shared Savings Program and CMMI’s Next Generation ACO, given they are fueled by provider participation and attribution. However, these models expand upon previous programs in that they offer expanded two-sided risk, offer enhanced participation benefits for Direct Contracting Entities (DCEs) as well as better beneficiary engagement carrots, and lastly, a better benchmarking approach.
The Geographic model expands into total cost of care risk.
The New DC Model: Geo
On December 3rd, CMS announced Geo, after teasing the concept for over a year, and it’s third direct contracting model is slated to start PY 2022 Geo’s unique features clearly indicate its significance in Medicare’s transition away from fee-for-service payments to providers: of special significance, this model delegates risks for Medicare beneficiary care and costs to DCEs within defined geographic regions—an important enhancement that localizes clinical risks and allows integration of social determinants in care planning.
Geo Direct Contracting Entities: DCEs in the Geo Model will be comprised of “Accountable Care Organizations, health systems, health care provider groups, and health plans” according to CMS. DCEs selected for the Geo Model will take on total cost of care for Medicare FFS beneficiaries in the defined geographic region where they will deploy value-based payment systems to lower the cost of care. This is an important distinction, unlike the Global and Professional Direct Contracting models, the new model “requires DCEs to take financial risk on a portion of all Medicare FFS beneficiaries residing in a geographic area rather than only Medicare FFS beneficiaries seeing particular providers.”
Geographic Designation: A DCE will manage at least 30,000 Medicare fee-for-service enrollees in a designated geography/region. CMS has upgraded its methodology to address regional variations essential to measuring risks and calculating savings.
Preferred Providers: These providers will be able to enter alternative payment models with DCEs in order to provide care to Medicare enrollees. They may qualify for Quality Payment Program bonuses and will have access to the enhanced benefits and care management offerings allowed under the model. Providers not designated as “Preferred Providers” will continue to be reimbursed at 100% Traditional Medicare rates.
Enrollee Choice: The goal of Geo is to give each beneficiary at least three DCE options per region. Beneficiaries cannot opt out of the new model, but they are allowed to select a DCE in their region at the start of each performance period or change DCEs either quarterly or annually. (If they don’t select a DCE, they will be randomly assigned to one.)
Quality Withhold: To participate, DCEs must meet quality thresholds in seven areas such as breast and colon cancer screening and hypertension control. In setting payment rates to DCEs; a “quality withhold” starting at 1% in 2022 and gradually increasing to 3% is imposed to incent sustained attention to safety and quality.
Medical Management Flexibility: DCEs are afforded unusual latitude in care management protocols and waivers from specified Medicare policies, e.g. Medicare’s three-day skilled-nursing facility rule and home visits for care management. DCEs may also lower beneficiary out-of-pocket costs by lowering their Part A or B copays or offering subsidies for beneficiaries’ Part B premiums.
Expanded Benefits for Enrollees: DCE-managed Medicare populations have access to the same benefits as fee-for-service Medicare PLUS a variety of tools used to differentiate their services to their designated Medicare customers, for example, vouchers for over-the-counter medications, healthcare-related transportation, meal programs, chronic disease management programs, and vision and dental services. Participants can also help enrollees manage chronic disease, including home air-filtering systems and home improvements such as railing installation. They can also offer wellness program members and $75 gift cards for adhering to disease management programs, additional telehealth services and other benefits.
Geo Regions: CMS has identified 15 candidate regions and will test the new model with DCEs in 4-10 regions before rolling it out more broadly. The CBSAs (Core Based Statistical Areas) CMS is considering for the model are:
- Los Angeles
- San Diego
- The first performance period will take applications until April 2, 2021 and have a performance period from January 1, 2022 through December 31, 2024. For the first performance period, interested DCEs must submit a non-binding “letter of interest” by 11:59 p.m. PT on December 21. CMMI plans to release a Request for Applications for the first performance period in January, with applications due on April 2 and participants announced on June 30.
- The second performance period will take applications in 2024 and have a performance period from January 1, 2025 through December 31, 2027.
For more information please contact Robert Hart, firstname.lastname@example.org.