Medicare reopens application period for Direct Contracting models

• CMS reopened the application process for Direct Contracting (DC) models.
• Participating physicians should still be able to get their MACRA bonus for 2021 despite the models’ delayed start.
• The DC models are open to providers in all states.

Medicare reopened an upcoming, high-profile value-based payment program for more providers to join, an official confirmed.

The Direct Contracting (DC) models, the start of which was recently delayed three months to April 1, 2021, are voluntary payment models that will use risk-based contracts to lower costs and maintain or improve quality for Medicare fee-for-service beneficiaries.

On June 17, CMS reopened the application process and set a July 6 deadline for submitting a nonbinding letter of intent (LOI), which is required before applying to join the program, a CMS official confirmed. After submitting an LOI, a prospective participant will have access to the application for the April 2021 cohorts.

A previously set July 6 deadline for submitting applications, the second step in the process, is still in place. CMS will send acceptance and rejection notices to applicants “this summer,” the official said. 

For cohorts launching Jan. 1, 2022, the deadline to apply will occur “in the first quarter of 2021,” according to a written CMS notice.

The move to reopen the DC models to new applicants followed calls for additional application opportunities by provider groups, such as in a February letter from the National Association of ACOs (NAACOS).

Perry Payne Jr., MD, an insurance specialist for the Center for Medicare and Medicaid Innovation (CMMI), said during a recent NAACOS conference that CMMI has not capped the number of DC participants, although the agency has some “capacity issues” regarding the number it can oversee.

“When you see how many are aboard, you might be surprised at how many [slots] are being awarded throughout these models,” Payne said.

CMS declined to specify how many have submitted LOIs so far.

Some clarifications offered

The DC program has drawn interest from a range of providers, including many in Next Generation Accountable Care Organizations (NGACOs). The close of the NGACO program recently was pushed back to the end of 2021, which is nine months after the start of the DC models.

CMMI is considering various approaches, such as grace periods, to ease provider transitions into DC models from its other models, Perry said. The agency already is planning to hold DC program applications from NGACO participants, if requested, until that model ends and then launch those providers in DC models at the start of 2022.

The DC program also includes two mechanisms to provide cash flow for enrolled providers, Payne said. First, capitation payments — for primary care or total care — are included in the DC model options. In addition, an advanced payment option will be available to some, such as designated “preferred providers.”

Dave Ault, a consultant for NAACOS and former counsel for CMMI, said another important clarification is that physicians who join DC models should be able to garner their full Medicare bonus payment for 2021, even though the DC program starts three months into the year. The DC models are advanced alternative payment models, meaning participating physicians are eligible for a 5% Medicare payment bonus.

Other clarifications by Ault included:

• Enrollment in DC models is open to providers in all states (other value-based payment models are regionally limited).
• Governing entities of DC model participants are not required to be providers.

Provider insight

For providers looking to join DC models, Emily Brower, a senior vice president with Trinity Health, suggested reviewing CMS data when it’s available to determine whether they are high-performing compared with others regionally or nationally. That will help them gauge how well they will perform financially in the models.

Similarly, Melanie Matthews, CEO of Physicians of Southwest Washington, underscored the importance of obtaining in-house or outside actuarial analysis to determine the models in which providers should participate.

“Who knew that my BFFs would be actuaries?” Matthews said.