Medicare Direct Contract Demonstration Gathers Critics and Advocates


WASHINGTON – As the Biden administration continues to shift Medicare reimbursement from volume-based payments to value-based payments, officials are expanding these efforts to include providers who care for “traditional” Medicare patients and currently bill under a fee-for-service system.

The new direct contracting program, a demonstration program that began under the Trump administration, allows “a wide range of organizations to participate with the Centers for Medicare & Medicaid Services (CMS) to test the next evolution of the contracts. risk sharing ”, according to a CMS Fact Sheet.

How the program works

The program offers three different types of direct contract models, including “population-based payments both with or in part that move away from traditional fee-for-service” and tries to broaden participation to include “Organizations New to Medicare Fee-for-Service. , such as physician-run organizations that currently operate exclusively under the Medicare Advantage program, ”according to CMS. These organizations, which could include responsible care organizations run by physicians, insurance companies, and health systems, would agree to provide care to a number of traditional Medicare beneficiaries in a geographic area for a specified amount.

Liz Fowler, director of the CMS Center for Medicare and Medicaid Innovation (CMMI), which developed the Direct Contracting program, was very clear about the direction the Medicare program is taking. “First and foremost, CMS is committed to the common goal of moving away from fee-for-service,” Fowler said at the Health Care Payment Learning & Action Network (LAN) summit in the month. last.

“Our ultimate goal is a broader transformation of the healthcare system that places patients at the center of their own care. And to achieve this goal, we believe that beneficiaries must have a responsible care relationship with their providers,” he said. she continued. “If we reach our goal of transferring 100% of traditional beneficiaries of Medicare to [accountable care] relationships by 2030, 100% of traditional Medicare payments will be tied to alternative payment models. “

Risk scoring issues

However, the program has sparked some controversy. Members of Doctors for a National Health Program demonstrated outside the Department of Health and Human Services building in November, saying such a program would end traditional health insurance. Meanwhile, two former CMS executives, including Donald Berwick, MD, who was acting CMS administrator under President Obama, have said the direct contracts program could be hacked by for-profit groups who swell the disease. of their patients – a measure known as a “risk score” – in order to achieve higher capitation payments from Medicare.

Health insurers could do this in part by increasing the risk scores of their 64-year-old commercial insurance patients and then including them as patients in their direct contract program when they enroll in Medicare. following year, as patients may be “self-enrolled” in the program without their consent. “As we’ve heard from industry insiders, ‘There isn’t a bad time to work on risk scores’,” Berwick, with former CMMI director Richard Gilfillan, MD, written in the September 30 issue of Health affairs. “Overall, it appears that under [Direct Contracting] rules, aggressive risk coders could still reap 20-40% of the program’s benefits, despite CMS’s efforts to limit the increase in risk scores.

Don Crane, JD, president and CEO of America’s Physician Groups, a lobbying organization for physician-led ACOs, said most of Berwick and Gilfillan’s criticisms are unfounded, although he agreed that some health plans attempt to inflate patients’ risk scores. “We watch with dismay some of the heinous tactics carried out primarily by the health plans and their proxies in an open-ended effort to elevate the codes,” Crane said in a telephone interview with a public relations person in attendance. “So we are not standing up for that, and if they do something wrong put them in jail… Anyone who defrauds the government should be prosecuted.”

However, he added, “Overall what is happening is a very good thing, i.e. identifying patients and their needs – both individual and then the the entire population for which a group is responsible. You need to know who your patients are, what their problems are, so that you can group them together and do awareness. If you do not know who your diabetics are, you will not be able to take care of people and certainly this population. population is fundamental in any good system. “

Where things can go wrong, Crane said, is when the people in health plans who do retrospective chart reviews “scratch their heads and say,” Couldn’t we be bringing in a little peripheral vascular disease since do most stroke patients have these other health issues as well? ‘ They’re kind of pushing the boundaries, and it’s entirely disconnected from the work of the doctors in the group of doctors … it’s a bare effort to make sure that every ounce of oil put into the car by the mechanic there. is included. “

NAACOS weighs

The National Association of ACOs (NAACOS) also has a favorable opinion on the Direct Contracting program, which it reiterated in a letter of December 16 to CMS administrator Chiquita Brooks-LaSure. NAACOS President and CEO Clif Gaus, ScD, noted that one of the models, the Global Professional Direct Contract Model (GPDC), “has recently come under scrutiny from the from advocates calling for a complete end to the model.We understand some of the concerns recently raised, such as not wanting a temporary model to grow too big and wanting value-based care to be focused on patients rather than benefits … That said, NAACOS believes that shutting down the GPDC would undermine the country’s remoteness from a large-scale fee-for-service system and undermine our collective efforts to move to one. value-based payment system. “

“Population health models are absolutely necessary to influence our health system to address the long-term health needs of patients, and total cost of care models have proven to be superior to other efforts over the past year. the past decade to bend the cost curve, “Gaus continued, adding that the” auto-enrollment “feature in which patients are automatically enrolled in the program” is simply CMS’s mechanism for finding where patients have historically searched for. care and assigning responsibility for expenditure and patient quality to a direct contracting entity (DCE) if patients receive most of their primary care from a provider participating in that DCE. “

The model offers more benefits than traditional health insurance, but still allows beneficiaries to freely choose their provider, “and DCEs must inform patients of their allocation to an DCE,” said Gaus. “This should not be the end of traditional health insurance, as advocates have recently argued, but it is a way to provide additional tools to beneficiaries and providers as part of a care approach. complete. “

  • Joyce Frieden oversees the coverage of MedPage Today in Washington, including articles about Congress, the White House, the Supreme Court, health professional associations and federal agencies. She has 35 years of experience in health policy. To follow



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