CMS Declines to Extend Next Gen ACO Model, But Invites ACOs to Join Direct Contracting

Two different groups involved in value-based contracting have made statements in the past two business days reflecting their responses to moves made by the Centers for Medicare & Medicaid Services (CMS) around value-based contracting. While leaders of NAACOS, the National Association of Accountable Care Organizations, on Friday expressed disappointment with the Biden administration’s action on the Next Generation ACO Model, the leaders of APG, America’s Physician Groups, on Monday expressed satisfaction with the administration’s invitation to Next Generation ACOs to apply for participation in the Global and Professional Direct Contracting (GPDG) Model in 2022.

First, on Friday, May 21, the leaders of the Washington, D.C.-based NAACOS released their statement, in the form of a press release published on their website, which began thus: “The National Association of Accountable Care Organizations (NAACOS) is disappointed the Biden Administration declined our request to extend the Next Generation ACO Model through next year, as it announced today. Next Gen’s extension was a top advocacy priority for us. We understand the constraints and narrow timeframe the CMS Innovation Center had to work under to prolong the model and disagree with findings in formal evaluations, which we believe were flawed. However, we appreciate today’s move to allow Next Gen ACOs a limited opportunity to apply for Direct Contracting to starting next year. This will be a viable path for some to continue participation in an innovative accountable care model like Direct Contracting. Non-Next Gens won’t be granted this limited exception unless they have already applied and deferred their exception.”

NAACOS’s leaders continued their statement by adding that “We continue to advocate that there should be a permanent, Next Gen-like ACO model that provides a better bridge between MSSP Enhanced [the enhanced version of the Medicare Shared Savings Program] and the full capitation option under Direct Contracting. With additional time, the Centers for Medicare & Medicaid Services (CMS) should consider using Innovation Center authority to test certain successful and popular concepts under Next Gen within the Shared Savings Program, as it did with Track 1+. To date, Next Gen ACOs have saved Medicare more than $1 billion compared to the CMS-generated benchmark and netted $616 million to the Medicare Trust Fund after accounting for shared savings, shared losses, and discounts paid to CMS. It is a successful program, and policymakers should look for additional ways to build upon its success.”

Then, on May 24, the leaders of the Los Angeles-based APG praised the decision by CMS, created through the Center for Medicare and Medicaid Innovation (CMMI), to invite Next Gen ACOs to join the new GPDC mode in 2022. APG’s leaders made the statement in the form of a press release published to their organization’s website. It began thus: “America’s Physician Groups (APG), along with APG Direct Contracting Coalition (Coalition) members, applauds the Center for Medicare and Medicaid Innovation (CMMI) for its decision to allow Next Generation ACOs to apply for the Global and Professional Direct Contracting (GPDC) Model for 2022.”

The press release went on to quote APG president and CEO Don Crane, who stated that “APG is gratified that CMMI will continue to support these valuable risk-based, Direct Contracting models by allowing Next Generation ACOs to request to join the model in the next performance year as Standard Direct Contracting Entities. These Next Generation ACOs have accumulated valuable experience and operational infrastructure that will contribute greatly to strengthening the Direct Contracting Model. Many organizations invested considerable resources to meet requirements in preparation to apply for GPDC participation in 2022 and we are glad that their investments will not be a wasted effort as GPDC receives more support from CMMI in the form of this expanded pool of applicants. The big winners are Medicare beneficiaries who will receive better quality care at lower costs,” Crane said.

And the press release noted that “APG is the leading national organization that promotes and supports organizations involved in Direct Contracting models. It established the Direct Contracting Coalition to help current and potential risk-based model participants exchange information and share best practices so that they can be successful. The Coalition currently has 70 organization members. The recent decision to reopen the GPDC Direct Contracting Model application portal ultimately benefits Medicare beneficiaries by improving healthcare quality and lowering costs,” the association’s statement added. “Allowing organizations to change to a value-based payment system from a fee-for-service system reduces healthcare costs, improves the patient experience, and improves the health of populations more quickly.” APG offers information on its Direct Contracting Coalition here.

On its website, CMMI offers this information: “The Global and Professional Direct Contracting (GPDC) Model is a set of two voluntary risk-sharing options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in Medicare fee-for-service (FFS), also known as Original Medicare. The goals in designing the GPDC Model include:

Ø Create opportunities for a broad range of organizations to participate with the Centers for Medicare & Medicaid Services (CMS) in testing the next evolution of risk-sharing arrangements to produce value and high quality health care.

Ø  Build on lessons learned from initiatives involving Medicare Accountable Care Organizations (ACOs), such as the Medicare Shared Savings Program (MSSP) and the Next Generation ACO (NGACO) Model. It also includes innovative ideas from Medicare Advantage (MA) and private sector risk-sharing arrangements.

The risk-sharing options are anticipated to appeal to a broad range of physician practices and other organizations because they are expected to reduce burden, support a focus on beneficiaries with complex, chronic conditions, and encourage participation from organizations that have not typically participated in Medicare FFS or CMS Innovation Center models. These health care organizations may offer optional incentives and benefit enhancements to Medicare beneficiaries who are aligned to a participating Direct Contracting Entity. Medicare beneficiaries will not lose any of their benefits and can continue to see any health care provider they choose.”

Prior to this week, CMS had not planned to allow organizations to participate that had not already participated in the program previously.