CMS on Thursday detailed its highly anticipated geographic direct contracting model for Medicare beneficiaries.
The program, which the agency’s innovation arm has been developing for more than two years, is intended to encourage provider care coordination across a physical area. “We believe it’s one of the center’s largest bets on value-based care to date,” Center for Medicare and Medicaid Innovation Director Brad Smith said Thursday on a call with reporters.
The model, which CMS is calling Geo, will enlist direct contracting entities (DCEs), which can include accountable care organizations, health systems and provider groups or health plans, to take responsibility for the total cost of care for all Medicare fee-for-service beneficiaries in their region.
DCEs and the providers that enter into an agreement with the entities will be able to opt for either total capitation or partial capitation. Payments will be risk adjusted and have a part of their rates withheld that starts at 1% in the first year and grows to 3% by the third year.
DCEs can earn back the quality withhold based on overall quality metric performances as well as, beginning in the second year, improvement rates.
Requests for applications will be available next month and due in April. Participants will be selected in June for a three-year performance period beginning January 2022. A second period will start in January 2025.
Travis Broome, SVP for policy and economics at Aledade, said the model is ambitious because it will make organizations responsible for the health of people who don’t already have strong, established relationships with their providers.
CMS will have to communicate with beneficiaries who may not seek care often what the new program means for them, he said. “Basically, CMS is going to have to say ‘something has changed, but trust us nothing has changed, or the change is all good for you,’ ” he said. “That’s going to be a unique problem to solve.”
DCEs will be chosen through a competitive bidding process. A key consideration for selection will be the discount proposed, which will be a percentage of the performance year spending benchmark. CMS anticipates successful bids will have discounts of at least 2% to 3% and up to 9%.
Other factors will include an entity’s risk-sharing experience, IT infrastructure, compliance and beneficiary engagement.
Broome said he will be watching which organizations apply to be DCEs and hopes to see some diversity. “If CMS gets these letters of intent back and they’re all from plans or they’re all from providers, that’s going to be a little bit of a warning sign that they’re not going to get the type of test that they want to do,” he said.
The agency has put forward 15 candidate regions and expects to narrow that down to four to 10 as DCEs are selected, Smith said.
Group purchasing organization Premier said the model had many aspects it advocates for, but had some quibbles with the DCE selection process. It said CMS should give more consideration to entities that don’t have experience with new functions like program integrity oversight and claims processing and should factor in the clinical risk of an area’s population.
It also balked at not allowing entities to propose new regions outside of the 15 CMS has defined. “Finally, the Geo model must recognize the significant investment made by existing ACOs in the target region by ensuring their operations are not disrupted by this model,” the group wrote.
Geo has a strong focus on social determinants of health and will offer DCEs a number of tools for beneficiary engagement. They can offer vouchers for over-the-counter medication, meal programs, transportation or dental and vision services. Entities will also be able to offer programs that provide air filtration for asthma patients and electronic monitoring services that warn when a patient has left a chair or bed.
That could make it attractive to commercial payers with a large footprint in Medicare Advantage, which also allows plans to offer similar benefits that aim to improve factors like access to care, stable housing and nutritious food.
Potential enhanced Medicare benefits include home visits for care management and telehealth services.
“The direct care entities are at risk, and so in order to perform well they need to keep patients healthy and they need to keep them out of the hospital,” Verma said on the call. “So we’re giving them flexibility to provide additional benefits that may help keep these people healthy.”
Beneficiaries will be aligned with their DCEs through a four-step process. They will first be able to choose an entity they feel best meets their needs. This voluntary alignment would supersede any other alignments.
Next, beneficiaries in a Medicaid managed care plan or ACO that is a DCE in their area will be matched with that entity. If claims data show a beneficiary to be receiving care from a preferred provider, they will be aligned with that provider’s DCE. Finally, any remaining beneficiaries will be randomly assigned.
Members can change their DCE but not opt entirely out of the model. They do, however, maintain all their fee-for-service coverage rights.
Each of the four to 10 regions eventually chosen will have three to seven DCEs, CMS estimates.