Provider groups ignite push to keep Direct Contracting model

Federal regulators are considering the future of the Direct Contracting program and an announcement could come soon, unnerving some provider groups.

The concerned groups are urging the Centers for Medicare and Medicaid Services to tweak but not toss out the Global and Professional Direct Contracting part of the program.

The push comes after a groundswell of progressive lawmakers have called on the administration to stop the program, saying it transforms traditional Medicare into Medicare Advantage and that profit-driven participants could hurt patient care. But some Direct Contracting advocates fear the domino effects of political influence on Center for Medicare and Medicaid Innovation demonstrations.

A CMS spokesperson said the agency is actively listening to feedback about GPDC and the comments are "invaluable" as it considers the future of the model. CMS will provide more information about the fate of the model soon, the spokesperson added.

Provider associations including America's Physician Groups, the National Association of Accountable Care Organizations and group purchasing organization Premier are reaching out to each other and their members to lobby CMS to keep the GPDC program intact. The groups plan to send a letter to Health and Human Services Department Secretary Xavier Becerra early this week, and said they've heard an announcement could come as early as Tuesday.

"Direct Contracting is a needed high-risk, value-based payment model designed to improve patient care. Please keep the model and make adjustments as needed or else we risk taking a step backward on work that provides patients with higher quality of care at a lower cost," the letter reads.

The Direct Contracting program is part of CMS' push towards value-based care arrangements. The initiative has taken on new meaning recently, as the agency in October unveiled a goal to bring all Medicare beneficiaries into value-based care by 2030.

GPDC builds off CMMI's previous ACO models, offering higher levels of risk and greater opportunities for reward. Fifty-three entities took part in the 2021 performance year, and another set began on Jan. 1, though CMMI has not yet announced the 2022 participants and paused new applications.

A separate model, Geographic Direct Contracting, would have allowed entities to bid on assuming the total cost of care risk for fee-for-service Medicare beneficiaries in a defined region. CMMI paused the Geographic model last spring before it started.

The provider groups' letter encourages CMMI to officially cancel the Geographic Direct Contracting model, since it's being confused with the Global and Professional options. But GPDC incentivizes better care for higher-need individuals and stopping that program would cut into health equity efforts, the letter said.

The letter calls on the agency to fix rather than end GPDC. APG Executive Vice President of Federal Affairs Valinda Rutledge said CMMI could increase the minimum percentage of physicians in a direct contracting entity's governing body, to make it more provider-led and allay concerns about insurer or private equity influence. The current guidelines require only 25% of the governing body to be made up of participating providers.

CMMI may also want to create a more level playing field in GPDC for entities that previously participated in ACO models, said David Ault, a consultant working with Direct Contracting stakeholders and the former head of the CMMI Division of Financial Risk. The current system gives new entrants to CMMI risk models, including insurers, the upper hand because previous efforts to become more efficient don't show up in their benchmarks.

"It is a model, it's not a permanent program. So it's meant to be a test," Ault said, adding that CMMI could introduce several other changes. "That's why you do these things, to learn as you go what can and should be fixed and improved."

But stakeholders worry the standard process of fixing CMMI models as they go could crumble under political pressure. Direct Contracting as a whole has come under fire recently from progressive lawmakers, who claim the program essentially privatizes traditional Medicare. Dozens of representatives signed a letter led by Rep. Pramila Jayapal (D-Wash.) last month urging HHS to permanently end both Geographic Direct Contracting and GPDC.

Sen. Elizabeth Warren (D-Mass.) also railed against Direct Contracting during a Senate Finance Committee subcommittee hearing earlier this month, claiming the program enriches private investors and organizations. Some providers, largely led by Physicians for a National Health Program, are advocating for the end of the program, too.

Direct Contracting's opponents point out that private equity-backed organizations and MA insurers run some of the program's participants and could abuse risk adjustment to earn more money. But GPDC places limits on diagnostic coding—though Ault notes that there is an exception to those limits for many of the beneficiaries that are aligned to new model entrants. Beneficiaries also retain their right to see any provider in traditional Medicare, even if they're aligned to a direct contracting entity, and can opt out of data sharing to CMS.

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GPDC is the biggest population health model currently active through CMMI. It's seen by many providers as a progression from the Next Generation ACO model that ended late last year.

Direct Contracting and other advanced alternative payment models have enabled VillageMD to innovate and improve patient care, said Gary Jacobs, executive director of VillageMD's Center for Government Relations and Public Policy. VillageMD runs six direct contracting entities.

Under GPDC, providers can purchase refrigerators so their patients can store insulin and perform other health interventions all but impossible in traditional Medicare, he said.

"Direct Contracting incentivizes overall expansion of quality and primary care, and it does it by creating certainty year after year with reimbursement, which is a big, big issue. And it's probably one of the reasons we can plan for an aggressive expansion of care to health deserts or medically underserved urban, rural communities," he added.

The program's fate could have larger repercussions for CMS and value-based care. Getting rid of the model mid-performance period could cause providers to lose trust in future CMMI models.

"You have to have confidence that what you put in place is going forward as advertised, because we set it up and patients deserve the services, the physicians, they're expecting the services," said Melanie Matthews, CEO of PSW, which operated an ACO through the Next Gen ACO model. Matthews said the natural next step for her ACO would be to move into GPDC.

"To me, this is a threat as a whole to all the value based care models. Not just Direct Contracting, but you know, that idea of them," she said.