CMS pushes pause on controversial Geographic Direct Contracting model

The Biden administration is reviewing a controversial payment model that would tie Medicare payments to spending and quality for an entire region.

The Centers for Medicare & Medicaid Services’ (CMS') webpage for the Geographic Direct Contracting model said it is currently under review in an update posted Monday.

The agency did not immediately respond to a request for comment on the reason the model was put under review nor for how long it would happen.

CMS announced the model back in December 2020, and a request for applications was posted Jan. 15. At the time, the agency announced it would have two three-year performance periods, with the first to run from Jan. 1, 2022 to Dec. 31, 2024. Another will run from Jan. 1, 2025 through 2027.

However, the Biden administration has undertaken a review of existing regulations that were passed at the last minute by the Trump administration. For example, the agency appeared to pull a final rule announced in January that aimed to streamline prior authorization requests.

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But it remains unclear how many payment models the Biden-run CMS plans to pause.

The Center for Medicare and Medicaid Innovation (CMMI), which oversees the payment models, did a review of the center’s models last year that found bundled payment models had mixed results in terms of savings while models that offered a global budget fared better.

The Geographic Direct Contracting model generated major pushback from several provider groups.

The National Association of ACOs, for instance, wrote a letter to CMMI in December noting major concerns over the model. One of the concerns was that beneficiaries may not know they are getting care from a provider in the model.

“The vast majority of beneficiaries will have no idea what a geographic [direct contracting entity] is and what mandatory beneficiary participation will mean for their care and existing provider relationships,” the association wrote. “For example, there is the potential for duplicative care or competing care management programs from a Geographic DCE and the providers the patient sees, who may or may not be participating with the Geographic DCE.”

Some providers were in favor of the model, including America’s Physician Groups.

“Models of care that are focused on systems of reimbursement such as capitation and holding physicians accountable for cost, coordination, and quality are integral to moving away from the fee-for-service model and toward more transformative models of care that reward value,” the group’s president and CEO, Don Crane, said in a statement in December.