CMS Direct Contracting

CMS is moving forward with their attempts to move into a risk payment system. The problem is that some of the players may not have their logistics process in place which could result in those participating losing monies. CMS explains Direct Contracting as follows:

Direct Contracting is a set of three voluntary payment model options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in Medicare fee-for-service (FFS). The payment model options available under Direct Contracting create opportunities for a broad range of organizations to participate with the Centers for Medicare & Medicaid Services (CMS) in testing the next evolution of risk-sharing arrangements to produce value and high quality health care. Building on lessons learned from initiatives involving Medicare Accountable Care Organizations (ACOs), such as the Medicare Shared Savings Program (MSSP) and the Next Generation ACO (NGACO) Model, the payment model options available under Direct Contracting also leverage innovative approaches from Medicare Advantage (MA) and private sector risk-sharing arrangements.

 A key aspect of Direct Contracting is providing new opportunities for a variety of different organizations (Direct Contracting Entities or DCEs) to participate in value-based care arrangements in Medicare FFS. In addition to organizations that have traditionally provided services to a Medicare FFS population, Direct Contracting will provide new opportunities for organizations without significant experience in FFS to enter into value-based care arrangements.

Under Direct Contracting, there will be three types of DCEs with different characteristics and operational parameters. These three types of DCEs are:

  1. Standard DCEs– DCEs comprised of organizations that generally have experience serving Medicare FFS beneficiaries, including Medicare-only and also dually eligible beneficiaries, who are aligned to a DCE through voluntary alignment or claims-based alignment. These organizations may have previously participated in section 1115A shared savings models (e.g., Next Generation ACO Model and Pioneer ACO Model) and/or the Shared Savings Program. Alternatively, new organizations, composed of existing Medicare FFS providers and suppliers, may be created in order to participate in this DCE type. In either case, clinicians participating within these organizations would have substantial experience serving Medicare FFS beneficiaries.
  2. New Entrant DCEs– DCEs comprised of organizations that have not traditionally provided services to a Medicare FFS population and who will primarily rely on voluntary alignment, at least in the first few performance years of the model. Claims-based alignment will also be utilized.
  3. High Needs Population DCEs– DCEs that serve Medicare FFS beneficiaries with complex needs, including dually eligible beneficiaries, who are aligned to the DCE through voluntary alignment or claims-based alignment. These DCEs are expected to use a model of care designed to serve individuals with complex needs, such as the one employed by the Programs of All-Inclusive Care for the Elderly (PACE), to coordinate care for their aligned beneficiaries.”

Basic Interpretation. Direct Contracting Models are designed to lower the costs of patient care by paying a fixed amount per patient per month and making primary care Providers responsible for the cost of care. In other words, profit for primary care is based on the reduction of costs which potentially is going to trigger the following behaviors:

  1. Limit referrals to specialists.
  2. Avoid hospitals in favor of outpatient centers.
  3. Increase type of services provided at primary care offices.
  4. Deny services that are not essential or that similar results may be reached by other means.

As a Federal Contractor, Taino Consultants Inc has been privy of the template agreement between the Direct Contracting Entity (DCE) and the Providers. The DCE Provider Agreement is designed to create an agreement between the DCE and a Practice Provider.  The agreement heavily specifies the requirement to adhere to Government Compliance Programs by specifically stating requirements of HIPAA Security, Omnibus Rule, HITECH Act and Office of the Inspector General (OIG)  guidelines.

Even with access to the information we have there are still many unknown variables which will we expect to change in the near future.  Hence, due diligence is recommended before signing any DCE agreements.