CMS Replaces Direct Contracting With New ACO Model

The Global and Professional Direct Contracting Model is transitioning to a redesigned provider-led Accountable Care Organization (ACO) Model, the Centers for Medicare & Medicaid Services announced Thursday.

The ACO Realizing Equity, Access, and Community Health (REACH) Model aims to continue the momentum of provider-led organizations participating in risk-based models and protect beneficiaries and the model with more participant vetting, monitoring and greater transparency, CMS said in a news release.

“Under the ACO REACH Model, health care providers can receive more predictable revenue and use those dollars more flexibly to meet their patients’ needs — and to be more resilient in the face of health challenges like the current public health pandemic,” CMS Deputy Administrator and Director of the CMS Innovation Center Liz Fowler said in the news release.

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Doctors and health care providers will play a bigger role in accountable care in the new model as at least 75% control of each ACO’s governing body must be held by participating providers or their designated representatives, compared to 25% in the old model.

In addition to replacing the GPDC model to the ACO REACH Model, CMS announced it was canceling the Geographic Direct Contracting Model effective immediately. Announced in December 2020, the Geographic Direct Contracting Model was paused last March.

CMS will release applications for the new model with participation set to begin Jan. 1, 2023.

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All existing participants must agree to meet the new requirements in the ACO REACH Model by next year to continue participating.

Of the 99 DCEs participating this year, 72 selected the global risk sharing option and 27 selected the professional risk sharing option. In 2022, there were 78 Standard DCEs, 13 New Entrant DCEs, and eight High Needs Populations DCEs. There were 53 DCEs who participated in the first performance year, which lasted from April 1 to Dec. 31, 2021, according to CMS.

While I-SNPs (institutional special needs plans) have frequently been SNFs payment model of choice in value-based care, some feel SNFs have a bigger role to play in ACOs moving forward.

ACOs are made up of traditional fee-for-service Medicare enrollees with providers along the continuum incentivized to reduce the cost of each covered resident’s care.

The model has had a bad reputation in the past in the skilled space for taking money away from SNFs.

In its fourth year, the Next Generation Accountable Care Organization Model reduced gross Medicare spending by $667 million, due in part to a reduction in skilled nursing facility (SNF) spending, according to an evaluation of the model released late last year.

The National Association of ACOs (NAACOs) praised CMS’s decision on Thursday, calling it the “right decision” for both traditional Medicare patients and the future of value-based care.

“When a patient’s doctor is accountable for their outcomes, patients are more likely to have team-based care, care coordinators helping their transitions out of hospitals, an emphasis on prevention and chronic disease management, and more efficient care through telehealth or home visits, all of which leads to higher quality care and lower out of pocket costs for patients,” Clif Gaus, president and CEO of NAACOS, said in the news release.

CMS will host a webinar to explain the new model in more detail on March 1 at 4 p.m. EST.

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