Providers are making a full-court press to convince lawmakers and regulators not to nix the Direct Contracting payment model, warning shuttering the model in its second year could shatter confidence in value-based care participation.
The major efforts by several provider groups come in response to concerns from progressive lawmakers in Congress wanting to get rid of the model due to concerns it could fuel privatization of Medicare. Providers say such concerns are unfounded, and the model is needed to shift healthcare from fee-for-service to value.
“No one is trying to privatize traditional Medicare,” said Don Crane, president and CEO of America’s Physician Groups. “We are just trying to bring the virtues of organized groups into what is really a fragmented and dysfunctional model.”
The group is one of several reaching out to lawmakers and the Biden administration on the fate of the model.
“We are trying to bring accurate information into this picture because patients and doctors both want this, they like it,” Crane said. “Let’s not deny the beneficiary what they want, need and like.”
The National Association of Accountable Care Organizations (NAACOS) is also asking organizations to join a letter to the administration outlining support for the model. The group is reaching out to progressives to counter what they say is misinformation about the program.
The Centers for Medicare & Medicaid Services (CMS) told Fierce Healthcare it is “actively listening” to the comments being made on the model. It will also provide more information on the future of the model soon but did not offer a timeline.
A source familiar with the matter told Fierce Healthcare that the Center for Medicare and Medicaid Innovation (CMMI), which oversees payment models, has said privately it does not want to completely kill the model.
Direct Contracting’s first performance year started last April and enables providers to get capitated or partially capitated population-based payments. The model, created under the Trump administration, enables physician-managed groups that have historically operated only in Medicare Advantage (MA) to participate in fee-for-service.
Participants choose to be in one of two tracks: global or professional. The professional option offers a lower risk-sharing arrangement, with the global option a more high-risk option. A track called geographic direct contracting, which ties Medicare payments to spending and quality for a region, was put on pause by CMS last year.
But that link to MA has sparked a backlash among progressives. Sen. Elizabeth Warren, D-Massachusetts, said during a recent hearing that MA plans have been able to use up-coding spurred by unnecessary diagnoses to game beneficiary risk scores and get overpayments from Medicare.
She said it was “completely baffling” the Biden administration would give the same bad actors “free rein” in traditional Medicare. Warren added that private investors and MA plans are starting to buy up providers to have more control over coding practices.
A letter from 54 House Democrats to Department of Health and Human Services Secretary Xavier Becerra also demanded an end to the model. The progressive lawmakers said that any funds leftover from the capitated payments can be kept as profit, creating a “perverse motive to decrease the quality and volume of seniors’ care.”
The group Physicians for a National Health Program, which lobbies for the creation of a single-payer health system, has pressed for CMMI to end the model.
It added that a majority of the 53 direct contracting entities, which have now declined to 51, are owned by investors that include private equity firms and insurers.
But some provider groups say progressives miss the mark on the program that kicked off its second performance year in January.
“If we move to an outcome-based reimbursement model like [accountable care organizations] and direct contracting entities we line up providers to manage care that they see best,” said Clive Fields, M.D., chief medical officer of the physician group VillageMD, one of the largest direct contracting entities. “Moving to system where providers are determining the type of care that a patient needs and ultimately better outcomes drive better economic outcomes.”
The temporary model also will not necessarily be extended to every Medicare beneficiary as Warren has claimed.
“If they want to expand it and make it a permanent part of Medicare that would be something that future administrations and Congress would have an opportunity to weigh in,” said Allison Brennan, senior vice president of government affairs for NAACOS, in an interview with Fierce Healthcare.
Crane added that it isn’t unusual for health plans to get involved as “a whole lot of American healthcare is organized right now by health plans.”
He said that if there are concerns, they should install new guardrails and clarifications.
“Don’t throw the baby out with the bathwater,” Crane said. “These are minor imperfections that should be corrected through agreement and regulation.”
Throwing out the model entirely could also shatter confidence in participating in value-based care, he added.
“If they pull the rug out from underneath all of these well-intentioned physician groups, they are not going to participate in pilots anymore,” Crane said.