June 28, 2022

Volume XII, Number 179

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June 28, 2022

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June 27, 2022

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Value-Based Programs: CMS Redesigns Global and Professional Direct Contracting Model and Renames it “ACO REACH”

The Centers for Medicare and Medicaid Services (CMS) recently announced a redesign of the Global and Professional Direct Contracting Model (the GPDC Model) and renamed the GPDC Model the ACO REACH Model. (“REACH” stands for Realizing Equity, Access, and Community Health.) Applications for the new ACO REACH Model are accepted beginning March 7, 2022 and close on April 22, 2022, for participation to begin on January 1, 2023 and run for four (4) performance years. Accepted applications have an option of participating in a 4-month implementation period (August 1, 2022 through December 31, 2022) in advance of the first performance year.

The redesign comes after rumors of the potential cancellation of the politically polarizing GDPC Model. CMS simultaneously announced the permanent cancellation of the Geographic Direct Contracting (GDC) Model, which had been paused since March of 2021.        

Summary of the GPDC Model

Under the GPDC Model, participating providers are able to obtain certain enhanced programmatic benefits under Medicare while taking on higher risk through partial or full capitation. Participating providers receive reduced Medicare payments and agree to receive some compensation from the DCE that has the participation contract with CMS. There were two participant options:

  1. Professional Option with lower risk-sharing – 50% of savings/losses, with Primary Care Capitation with a risk-adjusted monthly per-member per-month payment covering primary care services.

  2. Global Option with higher risk sharing – 100% of savings/losses, with either risk-adjusted Primary Care Capitation (similar to the Professional option), or Total Care Capitation with a risk-adjusted monthly payment for all covered services (primary care and specialty services), in each case provided to aligned beneficiaries by participating providers. 

Both the Professional and Global Options meet the criteria to be Advanced Alternative Payment Models (APMs) in performance years 2021 and 2022, and are both considered Merit-based Incentive Payment Systems (MIPS) APMs.

Why are the changes being made?

In announcing the redesign, CMS indicated that the revisions reflect the priorities of the Biden Administration and address legislative criticisms of components of the GPDC Model. Such priorities include: (i) a focus on health equity and bringing the benefits of value-based care to underserved communities; (ii) the promotion of provider leadership, ownership, and governance to help ensure more provider controlled governance; and (iii) additional vetting and monitoring of information, including on ownership, leadership, operations, and governance to help protect beneficiaries. The GPDC Model faced growing criticism from certain members of Congress. The criticisms alleged, among other things, that the GPDC Model was leading to the privatization of Medicare, which threatened access to quality health care, as investor-owned entities were reportedly taking ownership and control positions in Direct Contracting Enterprises (DCEs), and that DCEs had used up-coding to game beneficiary risk scores. 

What has changed in the redesign?

ACO REACH Model makes material changes to the GPDC Model. Notable changes include:

  • Advance Health Equity. The ACO REACH Model addresses health equity and focuses on bringing value-based care to Medicare beneficiaries in underserved communities. The ACO REACH Model:

    • Requires REACH ACOs to develop a Health Equity Plan that identifies health disparities and actions to initiate the identified disparities.  

    • Introduces a health equity benchmark adjustment to better support care delivery and coordination of care for patients in underserved communities.

    • Requires REACH ACOs to collect beneficiary reported demographics and social needs data.

    • Adds a benefit enhancement by increasing the range of services that may be ordered by nurse practitioners to improve access to care.

  • Governance. Under the ACO REACH Model participating providers will be required to have at least 75% of the governing board voting rights (up from 25% under the GPDC Model, and similar to requirements of ACOs under the Medicare Shared Savings Program). In addition, the REACH ACO governing boards must have a beneficiary representative and a consumer advocate who is different from the beneficiary representative, both of whom have voting rights (same individual and voting rights optional under the GDPC Model).

  • More Vetting, Monitoring and Transparency. CMS will require more information concerning a REACH ACO applicant’s ownership, leadership options, and governing board. The increased monitoring will include:

    • An annual assessment of whether beneficiaries are being shifted into or out of Medicare Advantage.

    • An examination of risk scores to identify potential inappropriate coding and misuse of beneficiary data.

    • Monitoring of potential anti-competitive behavior.

    • Use of data analysis to monitor services over time and assess beneficiary access to care.

    • Reviewing marketing materials on a regular basis for accuracy and to protect beneficiaries and their freedom of choice.

  • Reviewing websites regularly to ensure they are up to date and contain required information.

  • Annual auditing of downstream arrangements.

  • Investigation of beneficiary and provider complaints.

There also will be model changes reducing the withholds for quality, which encourages provider participation compared to other Innovation Center models (e.g., Direct Contracting); reducing the discount rate before 100% risk sharing occurs in the Global option, which encourages provider participation in the Global option; and modifying the risk categories to mitigate inappropriate risk score gaming. The benchmark for ACO’s serving a higher proportion of underserved beneficiaries will also be increased to help ensure all Medicare beneficiaries are served.

The summary above describes notable changes in the Model redesign.  A CMS summary chart of the policy revisions in the model redesign is available here.

What must current participants in the GPDC Model do?

Current GPDC Model participants must maintain a strong compliance record in 2022 and agree to meet all of the ACO REACH Model requirements beginning January 1, 2023 in order to continue as participants in the ACO REACH Model.  Based on current Innovation Center guidance and instructions, GPDC Model participants will sign new participation agreements, but are not required to re-apply, to participate in the ACO Reach Model.

As CMS and its Innovation Center continue to test and define value-based programs, they are addressing criticisms made concerning the GPDC Model and are focused on reducing health care inequities in underserved communities in the redesign and renaming of the GPDC Model. The redesign provides an opportunity for those that expected to apply for participation in 2021 before the GDPC Model was abruptly closed to new applicants, and leaves existing GDPC Model participants to decide whether REACH is the correct path for them and their providers.

© 2022 Foley & Lardner LLPNational Law Review, Volume XII, Number 69
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About this Author

Alexis Bortniker, Health Care Attorney, Foley Lardner Law Firm
Partner

Alexis Bortniker is a Partner and health care lawyer with Foley & Lardner LLP. Her practice focuses on transactional and regulatory matters with an emphasis on counseling health systems, hospitals, and other providers in managed care and physician contracting. Ms. Bortniker is a member of the firm’s Health Care Industry Team.

Previously, Ms. Bortniker was an associate with Choate Hall & Stewart LLP where she gained experience working directly with health care organizations on regulatory and corporate compliance issues, including the...

617.226.3177
C. Frederick Geilfuss II, Health Care Attorney, Foley Lardner Law Firm
Partner

C. Frederick Geilfuss II is a partner and health care lawyer with Foley & Lardner LLP. Mr. Geilfuss counsels health systems, hospitals, medical clinics, rehabilitation agencies, nursing homes, and other health care providers on general operational concerns, regulatory and business matters. He has many years of experience in health care acquisitions, integrated delivery service issues, managed care contracting, defense of providers against government enforcement actions, finance, real estate, administrative and medical staff issues, physician recruitment, fraud and...

414-297-5650
Kinal M. Patel health care attorney Foley & Lardner LLP Houston, TX
Senior Counsel

Kinal Mahesh Patel is a senior counsel health care attorney with Foley & Lardner LLP based in the firm’s Houston office. As a member of the firm’s Health Care Practice Group, Kinal advises health care, life sciences and insurance companies of all sizes as they navigate regulatory reforms and industry trends. Kinal’s practice combines both regulatory and transactional activities.

Transactional Counsel

Kinal provides transactional counsel to health care providers, plans, and other companies on mergers and acquisitions, joint ventures and strategic...

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