Over 200 healthcare organizations ask HHS to keep direct contracting

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More than 200 healthcare organizations have asked Health and Human Services Secretary Xavier Becerra to keep the Global and Professional Direct Contracting Model as some Democrats speak out against the Trump-era Medicare program.

The 222 organizations sent a letter to Becerra, saying "fix, don't end" the Centers for Medicare and Medicaid Innovation Direct Contracting Model. 

Supporters include health systems such as Banner Health, Intermountain and Sutter Health.

In the sign-on letter, the trade group National Association of ACOs said Direct Contracting is currently the premier accountable care model from the CMS Innovation Center. It seeks to build on the successful Next Generation ACO Model, while redesigning healthcare delivery and payment, NAACOS said.

Fixes could include a rebranding and name change as the Geographic Direct Contracting Model – which is very different and has been stopped – is being confused with the Global and Professional Direct Contracting Model.

WHY THIS MATTERS

Should the Global and Professional Direct Contracting be abruptly ended, healthcare 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, NAACOS said.

Also, direct contracting entities have proportionately more providers in communities with high numbers of low-income and minority patients, NAACOS said. Killing the model would hurt underserved populations.

The Next Generation ACO Model, on which direct contracting is based, has improved care and generated $1.7 billion in gross savings and $836 million in net savings to CMS between 2016 and 2020, according to NAACOS.

However, opponents fear the model is a move toward privatizing Medicare. The program allows private companies to participate in Medicare, which has the goal of lowering costs for the federal government.

Medicare Advantage plans, which are popular with consumers and lucrative for insurance companies, are already a step in this direction, opponents say.

Sen. Elizabeth Warren, D-Massachusetts has called for the Biden administration to pull the direct contracting payment model over fears it would turn Medicare over to "corporate profiteers," she said during a February 2 Senate Committee on Finance subcommittee hearing.

A signed petition to end direct contract that was originally signed by more than 1,500 physicians grew to over 10,000 signatures, according to Physicians for a National Health Program (PHNP).

THE LARGER TREND

In November 2021, the innovation center announced that 51 provider and accountable care organizations were participating in direct contracting in the upcoming year.

The model rewards providers who move away from traditional Medicare fee-for-service by providing capitated and partially capitated payments.

"Contrary to the misinformation from opponents, patients in traditional fee-for-service Medicare that are involved in the direct contracting program maintain their freedom to see any willing provider," said Crane. "In fact, they not only keep all of their original Medicare benefits and rights, they get additional benefits and lower costs, too."
 
APG says that direct contracting is a needed high-risk, value-based payment model that was designed to improve patient care. The CMS Innovation Center, set up under the Affordable Care Act, is an important tool to test value-based payment models like the direct contracting model that make healthcare more affordable while also improving quality of care.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com