New Direct-Contracting Options Raise Concerns with Some Value-Based Care Veterans

For the most part, in-home health care providers have responded to new federal direct-contracting models with enthusiasm.

Landmark Health, for example, is one of 51 direct-contracting entities (DCEs) already participating in the upcoming “global” and “professional” options, both of which were first introduced by the Center for Medicare & Medicaid Innovation (CMMI) in early 2019. Meanwhile, Capital Caring Health, Housecall Providers and five others have launched Advanced Illness Partners (AIP), another DCE.

“We’re excited to participate in CMMI’s innovative program to bring advanced illness care upstream and serve patients with complex, chronic disease in the home setting for the long-term,” Dr. Eric De Jonge, director of geriatrics at Capital Caring and AIP’s chief medical officer, said upon the organization’s formation.

Not everyone in health care shares the excitement, however. In fact, some value-based care veterans believe the emerging direct-contracting models are inherently flawed, particularly the most recently unveiled “geographic” option.

Among the skeptics is the National Association of Accountable Care Organizations (NAACOS), the Washington, D.C.-based advocacy organization that represents hundreds of ACOs across the U.S. and roughly 6 million beneficiary lives.

Initially, NAACOS saw direct contracting as a natural extension of the proven ACO models from CMMI and the U.S. Centers for Medicare & Medicaid Services (CMS), its senior vice president of government affairs, Allison Brennan, told Home Health Care News.

The organization’s tune has changed, though, after digging through the details. 

“We were really looking forward to direct contracting as a natural outgrowth and an opportunity to build on lessons learned from previous models,” Brennan said. “As some of the details were released, which happened gradually over the course of over a year, we looked at the meat on the bone, so to speak, and saw there were challenges for legacy ACOs to participate and have an opportunity to be successful.”

Broadly, the ACO concept is a market-based solution that brings physicians, hospitals and other providers together to collectively manage care, with the overall goal of lowering costs and improving health outcomes.

While there are different shades of ACOs, most fall under the Medicare Shared Savings Program (MSSP), the largest value-based payment model in the country. As of January 2020, there were at least 550 active MSSP ACOs.

When it comes to the professional and global direct-contracting options, NAACOS and its members have multiple concerns, Brennan explained.

One basic issue, she said, is the missing emphasis on actual providers, especially as more and more DCEs are being spearheaded by new entrants into the Medicare space. Originally, “direct contracting” was known as “direct-provider contracting,” with the “provider” reference ultimately being dropped.

“It was an interesting evolution in the discussion around the model to see it go from ‘direct-provider contracting’ to ‘direct contracting,’” Brennan noted. “And I think that’s telling. It’s been disappointing, because we think that the provider should be at the heart of these payment models.”

Another issue is the weighting system that CMS and CMMI plan on using for historical expenditures and eventual capitation amounts.

As currently set up, the global and professional direct-contracting options financially favor organizations that are new to value-based care, putting legacy ACOs at a disadvantage. 

“The weighting of baseline years in a benchmark is one of many key decisions that has to be made [that] has repercussions about how successful an ACO or DCE, in this case, can be in the model,” Brennan said. “Where legacy ACOs have already reduced spending over the years, the weighting of the most recent benchmark year 2019 is not in their favor.”

NAACOS detailed those and other concerns in a Dec. 16 letter sent to CMMI Director Brad Smith.

While NAACOS has nuts-and-bolts worries about the global and professional direct-contracting options, it has wholesale concern about the geographic option.

NAACOS strongly supports the continued transition of Medicare Parts A and B away from fee-for-service payment and toward a system that rewards value over volume. But the geographic option is too untested and too different for implementation any time soon, according to Brennan.

It could also be detrimental to Medicare beneficiaries, she added.

“A [geographic option] DCE could have a care coordination program that could be duplicative of what a beneficiary’s primary care practice already has in place,” Brennan said. “I think there’s a potential to also see some administrative overlap and waste that’s created, which would be the opposite of one of the goals of the model.”

The NAACOS letter to CMMI goes on to argue “the vast majority of beneficiaries will have no idea what a geographic DCE is and what mandatory beneficiary participation will mean for their care.”

ACOs honing in on home-based care

Direct-contracting concerns aside, Brennan said she was pleased to see more ACOs embrace in-home care in 2020.

In the past, home health and home care providers often felt excluded from some ACO relationships. Increasingly, ACOs now recognize home-based care as an easy, effective way to bring health care costs down while boosting quality.

“ACOs have seen the value of in-home care for a variety of reasons,” Brennan said. “Oftentimes, it’s preferable for families and patients. Also, when appropriate, it’s frequently less expensive than a more costly facility-based stay.”

The COVID-19 pandemic has only further showcased that value.

“I think one of the low-hanging fruits that a lot of ACOs look at is how can we provide the right care in the right setting,” Brennan continued. “There’s a lot of promise with home care. I think this year, during the pandemic, we’ve seen an even greater emphasis on keeping people at home when it’s appropriate, or returning them to a home-based setting for care as soon as possible [following an acute stay].”

The post New Direct-Contracting Options Raise Concerns with Some Value-Based Care Veterans appeared first on Home Health Care News.

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