ACOs press for halt to Geographic Direct Contracting model due to complexity concerns

care coordination
The new Geographic Direct Contracting model could cause confusion among patients and overlap with other payment models, according to the National Association of ACOs. (Getty)

The National Association of ACOs (NAACOS) is calling for the Trump administration to put the brakes on a new payment model that ties savings to the health of an entire region.

NAACOS wrote in a letter to the Center for Medicare and Medicaid Innovation (CMMI), which oversees payment models, that the new Geographic Direct Contracting model recently announced needs further testing and could create patient confusion.

Geographic direct contracting aims to test whether providers can improve quality and lower costs for beneficiaries across a region. It is a branch of direct contracting, a model that calls on providers to take on a high amount of financial risk in exchange for meeting savings targets.

In the geographic model, providers will work in a specific region and leverage existing relationships to develop a care delivery solution that accounts for the region’s local needs.

Each region will have a certain performance benchmark that providers will have to meet to gain access to savings. The benchmark is linked to the historic Medicare fee-for-service spending in the region trended forward based on a control group of regions.

“This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality and lower the cost of care for Medicare beneficiaries in a community,” said CMS Administrator Seema Verma in a statement earlier this year.

Some groups were pleased with the new model. America's Physician Groups said that the model could help with "moving away from the fee-for-service model and toward more transformative models of care that reward value while accounting for improved population health, quality, and the patient experience," said Don Crane, the group's president and CEO.

But NAACOS said that the new geographic option raises major concerns about creating confusion among beneficiaries compelled to participate in it. The vast majority of beneficiaries won’t have any idea they are in a geographic direct contracting entity, NAACOS said in its letter to CMMI.

RELATED: Verma says value-based care models haven't made good return on investment

While beneficiaries would keep their provider, they would also be assigned to a geographic direct contracting entity that they have no past relationship with.

“This could disrupt existing care relationships and potentially create waste in the healthcare system at a time when resources are already stretched thin as we recover from the COVID-19 pandemic,” the association said.

Another concern is that the model invites more complexity and overlap among the interaction of advance payment models.

“Rather than adding a new layer of complexity that introduces even more confusion about overlap, we request the innovation center focus on fixing the existing model overlap issues,” NAACOS said.

The Trump administration hopes to have two three-year performance periods. The first period takes applications next year and runs from Jan. 1, 2022, to Dec. 31, 2024, and the second period takes applications in 2024 and run from Jan. 1, 2025, through 2027.

NAACOS is not the only group with concerns surrounding the model.

The nonprofit law organization Center for Medicare Advocacy called for CMMI to halt the model, chiefly concerned that beneficiaries will be enrolled in a health plan similar to managed care.

“In many ways the ‘Geo Model’ appears to turn more of the federal Medicare program over to private insurers—privatizing the Medicare program even beyond the growth in Medicare Advantage,” the center said Thursday. “This new model would actively target the still-majority of Medicare beneficiaries who choose not to enroll in private, managed care plans, and, in effect, force them to do so.”

A blog post from the advocacy organization Commonwealth Fund also raises several major questions about the model. These include whether future direct contracting entities could look like HMOs that have closed provider networks that limit beneficiary access to specific providers.

RELATED: CMS to allow managed care organizations to participate in direct contracting

The model would allow entities to designate preferred providers and give beneficiaries incentives to see them, the post said.

Another issue is that the model doesn’t require direct contracting entities to report claims or encounter data to the Centers for Medicare & Medicaid Services, which can be used to uncover possible fraud or develop best practices.

“Will policymakers, researchers and oversight investigators be able to evaluate the program and ensure beneficiaries are receiving applicable care without this information?” the post said.