CMS Announces New Direct Contracting Care Models

Robinson+Cole Health Law Diagnosis

On April 22, 2019, the Centers for Medicare and Medicaid Services (CMS) announced two new voluntary risk-sharing payment models—Professional Population-Based Payment (PBP) and Global PBP. Under the Professional PBP model, CMS will pay participating organizations (referred to as Direct Contracting Entities or DCEs) a monthly, risk-adjusted primary care capitation payment, as well as 50 percent of shared savings/losses for enhanced primary care services. The Global PBP model, which is aimed at larger organizations, offers a higher level of risk and reward. DCEs participating in the Global PBP will receive/be responsible for 100 percent of shared savings/losses and will have two capitation payment options. The first option is the same primary care capitation payment as in the Professional PBP model, and the second option is a total care capitation payment for all services provided by the DCE and preferred providers with whom the DCE has an agreement. Under either model, DCEs may offer patients certain “benefit enhancements” for the purpose of promoting accessibility to innovative and affordable care.

The new payment models will begin in January 2020 with initial beneficiary alignment, and performance periods will begin in January 2021 and will last five years. Organizations interested in participating in either the Professional PBP or Global PBP must submit a letter of intent (LOI) to the CMS Innovation Center. Following the LOI process, CMS will release a request for applications to allow organizations to apply for participation. The request for applications will include additional information about the models, such as eligibility requirements, selection criteria and benefit enhancements.

The models are aimed at encouraging participation by organizations that have typically not participated in Medicare fee-for-service or CMS’s Innovation Center models, such as physician-managed organizations that participate exclusively in Medicare Advantage and organizations that care for patients with complex or chronic conditions.
CMS hopes the new models will help provider organizations move away from traditional fee-for-service Medicare, while maintaining or improving care quality. CMS also expects that the new models will reduce provider burden by requiring fewer quality measures. Importantly, CMS highlights the fact that beneficiaries will retain the ability to choose their providers.

In addition to the Professional PBP and Global PBP models, CMS is seeking stakeholder feedback on a third model, called Geographic PBP, which is similar to Global PBP but for a defined geographic region. CMS is accepting feedback on this third model through May 23, 2019.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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