Overview: The Direct Contracting Model has recently come under attack and could be abruptly cancelled by the Centers for Medicare and Medicaid Services (CMS). Doing so would take away a participation option for providers committed to the transition to value, leaving them without a viable alternative for the last performance year to qualify for the 5% incentive payment for Advanced Alternative Payment Model (Advanced APM) participation. Abrupt cancellation of Direct Contracting would set a dangerous precedent for cancelling other APMs, undermining the time and resources providers put into evaluating, applying, and participating in these models. The Biden Administration and Congress need to hear directly from health care providers who support continuing and improving the Direct Contracting Model as opposed to cancelling it without warning.
How can you help? Please review the letter below and fill in your organization’s information to be added as a signatory to this letter.
The deadline is 5 pm Eastern Monday, February 14.
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The Honorable Xavier Becerra
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, DC 20201
Re: Continuing the Direct Contracting Model
Dear Secretary Becerra:
The undersigned organizations write to urge you to not cancel the Global and Professional Direct Contracting Model (GPDC) and instead make necessary refinements to improve the model in support of patients and providers. Direct Contracting is an accountable care model for traditional Medicare. Stopping Direct Contracting is bad policy and would undermine our health system’s move to value-based payment models, which is sorely needed to achieve the triple aim of better patient satisfaction, higher quality care, and more affordable care. Traditional Medicare patients’ care would be worse off without the benefits and quality of care provided by Direct Contracting Entities (DCEs).
Canceling Direct Contracting would additionally undermine the work of the Center for Medicare and Medicaid Innovation (Innovation Center) and the Centers for Medicare & Medicaid Services (CMS). The Innovation Center was a critical part of the Affordable Care Act and is an instrument to test value-based payment models that make care more affordable while also improving quality of care. Much has been learned over its first decade of work. Should this model be abruptly ended, health care providers would be terminated from value-based payment participation without warning, making them far less likely to invest and participate in future CMS payment models. This would be particularly unfair for the dozens of Accountable Care Organizations (ACOs) that moved into Direct Contracting after the December 2021 conclusion of the Next Generation ACO Model, a successful provider-led payment model launched under then President Obama’s administration. The Innovation Center work and the shift to value-based care has been bipartisan and should remain that way.
Rather than canceling Direct Contracting, a better option is to adjust the model, which the CMS Innovation Center can quickly do. Fix, don't end, the Direct Contracting Model. For example, CMS can limit participation to certain types of DCEs, such as provider-led DCEs, and place additional guardrails and add more beneficiary protections. A rebranding and name change would also help communicate how this model is part of the evolution to accountable care. There's still time to make these adjustments this year. The Innovation Center would also benefit from a public announcement that the Geographic Direct Contracting Model, which is being confused with the very different Global and Professional options, is stopped entirely.
Many of the recent criticisms against the model are misleading and flat out false. Traditional Medicare patients maintain their freedom of choice to see any willing provider. They keep all of their rights and protections, and in fact, get more benefits and lower cost care through the model. There are no networks or prior authorization. DCEs must inform patients of their assignment to a DCE. This is not the end of traditional Medicare, as advocates have falsely claimed, but is a way to provide additional beneficiary and provider tools as part of a whole-person care approach.
Furthermore, Direct Contracting is part of the CMS Innovation Center’s efforts to help underserved populations, a focus which should be built upon through program modifications. CMS officials have stated that DCEs have proportionately more providers in communities with high numbers of low-income and minority patients. The model in fact incentivizes care for sicker, high-needs patients. Lessons learned from the model could be applied to other payment models. Canceling Direct Contracting would hurt our health system’s efforts to address health disparities.
The organizations listed below have worked tirelessly, most recently in the face of a global pandemic, to move towards a health care delivery and payment system that emphasizes quality and value. During the pandemic, DCEs have been able to use care coordinators, telehealth, preventive care, and other waivers to keep patients healthy in the face of COVID. This work has been done despite challenges such as staff shortages, clinician burnout and grave financial struggles. Their work should be commended, not vilified.
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.
Sincerely,