CMS' Center for Medicare and Medicaid Innovation offered clarity Wednesday on the future of its Next Generation and direct contracting models after providers publicly expressed uncertainty and confusion.
The Innovation Center announced the Next Generation ACO model will get a one-year extension and the Direct Contracting Model will begin April 1, a three-month delay from the original start date.
The National Association of ACOs has been urging CMMI to extend the Next Generation ACO model since last year. The demonstration program, which has been in effect since 2012, was slated to end in December.
"NAACOS hopes the additional year will give CMS more data on which to make the Next Gen model permanent," CEO Clif Gaus said in a statement.
The Next Generation model involves ACOs taking on high amounts of downside risk in exchange for bonuses as a result of improving health outcomes and lowering costs for Medicare beneficiaries. Forty-one ACOs currently participate.
Additionally, CMMI will change the methodology this year used to determine savings and losses for the Next Generation ACOs in response to COVID-19. CMMI will reduce 2020 downside risk by decreasing shared losses by the proportion of months of the public health emergency, among other modifications.
NAACOS is supportive of the changes, Gaus said. CMS acted similarly for ACOs in the Medicare Shared Savings Program in response to fears from providers their ACOs will experience losses this year due to overall disruption of operations and higher costs associated with treating coronavirus patients.
While CMMI offered clarity on the start date of the Direct Contracting model after months of confusion, NAACOS said members still need information on the methodology and when the application period for the April 2021 start date begins.
The Innovation Center also is changing how it determines losses for providers participating in other value-based payment demonstrations. The models include Bundled Payments for Care Improvement Advanced, the Comprehensive End-Stage Renal Disease Model and Comprehensive Care for Joint Replacement Model.
Premier backed the changes CMMI made to the payment models. "We appreciate that CMS has adopted many of Premier's recommendations, including adopting similar policies across all models by removing COVID-19 episodes from expenses as well as tailored modifications to specific Innovation Center models," said Blair Childs, senior vice president of public affairs in a statement.
In a Health Affairs blog post announcing the changes, CMS Administrator Seema Verma touted the long-term viability of value-based payment.
"Going forward, value-based care can help ensure healthcare resiliency," she wrote. "By accepting value-based or capitated payments, providers are better able to weather fluctuations in utilization, and they can focus on keeping patients healthy rather than trying to increase the volume of services to ensure reimbursement. Value-based payments also provide stable, predictable revenue—protecting providers from the financial impact of a pandemic."
She also said the Innovation Center will work with the model participants on the changes and implementation processes. Additionally, CMS will also review the data from models "to identify short-term and long-term lessons learned," Verma said.