CMS' Center for Medicare and Medicaid Innovation caught healthcare executives off guard when it paused applications for the Global and Professional Direct Contracting Model last month, scuttling many providers' plans for next year.
A former senior Trump administration official lambasted the decision, calling it "a big blow to value-based care." While some healthcare organizations forged ahead with the GPDC model despite the pandemic, others held off until they weathered the storm. CMMI had told interested organizations that they could join the model after the pandemic ended, so many of them decided to wait to apply.
Now many would-be participants are in limbo, as the agency decides the fate of the model or its possible replacement. The uncertainty has created widespread consternation among existing accountable care organizations and all new direct contracting entities backed by managed-care organizations or venture capital firms. Many of them would have applied for the pilot project last year if they knew CMMI would pause new applications for 2022, experts said.
"It's not a great look for the administration. If you want to get things done, you've got to work with the industry," the former official said.
Nascent organizations are frustrated that their investments may never pay off. Healthcare organizations have spent the past few months getting ready to apply for the model, devoting considerable time, money and effort to the process. Many of them spent thousands of dollars on consulting fees, calculating benchmarks and signing up providers.
"It feels like it's been a total waste," said MedPAC commissioner Dr. Amol Navathe, a physician and economics professor at the University of Pennsylvania.
The decision has left many direct contracting entities without a home for 2022, forcing them to reevaluate their plans while flying blind.
"It makes it more difficult to make sound operational decisions and investments when there's such little information out there," Collaborative Health Systems' President Anthony Valdés said.
Hospitals and Next Gen ACOs have been especially vocal about their displeasure, urging CMMI to extend the program through 2022 and create a permanent full-risk ACO option. Without further action from the agency, they would have to sit out the year or move into the Medicare Shared Savings Program's ENHANCED track. That would allow them to stay in an alternative payment model but reduce their risk from 100% to 75%. And it would give Next Gen ACOs less flexibility, including the ability to adjust downstream payments.
"If you're trying to drive value in healthcare and you're forcing organizations to move backward in risk, that's just bad policy. They need to have a full-risk option in the Shared Savings Program," said former CMMI official David Ault, counsel at Faegre Drinker Biddle & Reath.
But experts are divided on whether the agency would or should keep Next Gen in place for another year. Some argue it would allow Next Gen ACOs to continue to operate in a full-risk model until CMMI figures out its plans for value-based care. Others believe it would only delay the inevitable and take away resources that could be devoted to its successor.
Next Gens probably wouldn't invest much in the model since it would only last one more year, said Valinda Rutledge, a former CMMI official and executive vice president of federal affairs at America's Physician Groups. She thought the agency should reopen applications for the GPDC Model instead.
Other organizations that planned to form their own direct contracting entity in 2022 could join one that CMMI already approved. That would allow them to continue their progress on value-based care and take advantage of the GPDC Model's new waivers, which could appear in the next model. It could also give them an edge over participants in other models down the line by allowing them to learn how to use the new features effectively.
The Biden administration's decision to halt applications is unusual because CMMI typically reserves the right to change a model's details, delay applications or push back a model's start date, rather than pause applications altogether.
Still, it's unsurprising that new CMMI Director Liz Fowler would revisit the agency's current models and strategy since it's a new administration. The same thing happened after President Barack Obama left office.
CMMI offered few details in explaining its decision to pause applications for the GPDC Model and the future of its value-based care strategy remains hazy. As a result, healthcare executives throughout the industry feel like they've been left in a lurch.
But Dr. Mai Pham, a consultant who formerly served as CMS' chief innovation officer, said that stopping applications for new direct contracting entities was likely the smoothest path forward for CMMI and would-be participants, even though it seems disruptive now.
The GPDC Model is more complex than other CMMI experiments and attracted a rush of new participants, including several organizations without Medicare fee-for-service experience, which may have surprised the new administration. If the agency plans to cancel or significantly delay or retool the model, pausing it would likely save hopeful participants a lot of trouble. Organizations would have wasted even more resources if CMMI had accepted applications for the model before canceling it.
"We don't know the full story yet," Pham said. "If I could encourage anything from the marketplace, I would say, let's take a breath."
Fowler's quick decision to pull the plug on applications also gave ACOs as much time as possible to make alternative plans for next year, Ault said. MSSP applications are due in June.
