The U.S. Centers for Medicare & Medicaid Services (CMS) made an announcement late Thursday that some providers and associations have been waiting for. It’s one that offers a glimpse into how the agency will operate during the remainder of President Biden’s term – and one that will have an immediate impact on some home-focused care providers.
The Global and Professional Direct Contracting Models (GPDC) have not been completely overhauled, but instead fine-tuned. In lieu of those models, the Accountable Care Organization (ACO) “REACH” model will be put in place, CMS announced.
The ACO REACH Model was created to “address stakeholder feedback, participant experience, and Administration priorities,” as well as health equity concerns. The model will start on Jan. 1, 2023, and the model performance period will run through 2026.
“REACH” is an acronym for Realizing Equity, Access and Community Health.
“People with Traditional Medicare who receive care through a REACH ACO may have greater access to enhanced benefits, such as telehealth visits, home care after leaving the hospital and help with co-pays,” the CMS announcement read. “They can expect the support of the REACH ACO to help them navigate an often complex health system.”
Within the announcement, CMS acknowledged that there are currently 99 direct-contracting entities (DCEs).
CMS is also officially canceling the Geographic Direct Contracting Model, which drew considerable scrutiny and was eventually paused last March.
“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,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “The Innovation Center is making improvements to existing models and launching new models to increase participation in our portfolio, and CMS will be a strong collaborator to health care providers that participate in those models.”
Officially, the ACO REACH Model is considered a “redesign” of the GPDC Model, which will continue until Dec. 31.
“In the meantime, CMS will operate the GPDC Model with more robust and real-time monitoring of quality and costs for model participants,” CMS said. “GPDC Model participants that do not meet model requirements, such as participants that restrict medically necessary care, will face corrective action and potential termination from the model.
Broadly, direct contracting with CMS gives private health care providers a chance to engage in risk-sharing arrangements with traditional Medicare. The goal of the partnerships is to bring down costs and improve care.
For instance, home-focused health care providers such as LifeSpark and Humana Inc. (NYSE: HUM) were approved to become DCEs. The value-based primary care provider Oak Street Health (NYSE: OSH) and the Walgreens-backed VillageMD are likewise active DCEs.
Direct contracting, though greeted with enthusiasm from many private health care providers, drew skepticism from ACO organizations and select lawmakers alike.
Sen. Elizabeth Warren (D-Mass.) was one of those lawmakers.
“It is completely baffling to me that the Biden administration wants to give the same bad actors in Medicare Advantage free rein in traditional Medicare,” Warren recently said during a Senate Finance Committee hearing. “President Biden should not permit Medicare to be handed over to corporate profiteers. Doing so is going to increase costs and put more strain on the hospital insurance trust fund.”
The National Association of Accountable Care Organizations (NAACOS) was likewise upset with the GPDC Model. The association believed that there were too many challenges in the details for legacy ACOs to get involved.
On Thursday, the association applauded the CMS announcement of the ACO REACH Model.
“Today’s announcement … is the right decision for both traditional Medicare patients and the future of value-based care,” NAACOS President and CEO Clif Gaus said in a statement. “Many of the criticisms against Direct Contracting were a product of great misunderstanding about the model and the overall shift to value-based payment. Instead, keeping the model with additional focus on equity, increased provider governance, improvements to risk adjustment and other changes is best moving forward.”
Nonetheless, it appears that direct contracting will continue under the administration.
However, providers in the GPDC Model, and then the ACO REACH Model, are likely to be operating under heavy oversight and scrutiny.
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