The Global and Professional Direct Contracting Model went out a winner in its second and final year by saving Medicare $371.5 million in 2022, a more than fivefold improvement from the prior year, the Centers for Medicare and Medicaid Services announced Monday.
CMS credited the $301.1 million increase in savings to growth in the number and experience of Direct Contracting participants, and to an extension of the amount of time organizations had to manage patient care. Ninety-nine Direct Contracting entities managed care for fee-for-service Medicare enrollees last year, up from 53 in 2021, the agency said. CMS measured savings over 12 months in 2022, compared with nine months the year before. The agency delayed starting the Direct Contracting program in 2021 because of the COVID-19 pandemic.
In 2022, more than three-quarters of participants, or 75 groups, earned shared savings, while 23% reported losses. Direct Contracting groups that assumed total risk generated more savings than those that only took on partial risk: 79% of groups in the global risk track achieved shared savings, compared to 67% in the professional risk option. Direct Contracting groups collectively retained $484 million in savings.
President Joe Biden's administration transitioned the Direct Contracting model to the Accountable Care Organization Reimagined to Achieve Equity and Community Health model, better known as ACO REACH, at the start of this year after facing pushback from progressive lawmakers about for-profit companies' influence on the program and its effect on patient care.
ACO REACH includes health equity, risk adjustment, provider governance and other requirements that were not part of the Direct Contracting model, which was developed by President Donald Trump's administration. In August, the Center for Medicare and Medicaid Innovation increased reserve requirements and reduced enrollment minimums under ACO REACH.
The Direct Contracting results reaffirm that CMS should invest in payment models that hold providers accountable for cost and quality, National Association of ACOs President and CEO Clif Gaus said in a news release. "NAACOS was pleased to see many positive changes to Direct Contracting in ACO REACH, and we are excited to see what results that model delivers," he said. "We look forward to working with CMS to bring these learnings to other ACO models."