Earlier this year, the United States Centers for Medicare and Medicaid Services (CMS) announced a few new updates and milestones for several programs run by the Center for Medicare and Medicaid Innovation (CMMI).
Next Generation Accountable Care Organizations (NGACO) Model
On January 10, 2020, CMMI posted the second evaluation report of the NGACO Model, which is currently implemented in 41 ACOs across the United States. The NGACO Model was launched in January 2016 and tests whether stronger financial incentives for ACOs, paired with tools to support patient engagement and care management, can improve health outcomes and lower expenditures for Medicare fee-for-service (FFS) beneficiaries.
Under the NGACO Model, there is a higher level of shared financial risk and reward than what it traditionally offered under other Medicare ACO models. CMS establishes quality standards and sets a spending benchmark for each ACO every performance year based on historical spending for ACO-aligned beneficiaries. NGACOs can earn a share of savings from CMS for keeping Medicare spending for their beneficiary population below the benchmark – and are required to pay a portion of the loss, if spending exceeds the benchmark.
The report found that there was statistically significant (albeit, small) reduction in gross Medicare spending (-0.6%) and a non-statistically significant increase in net Medicare spending (+0.4%) after accounting for the CMS risk-sharing payouts to participating NGACOs.
Primary Care First Payment Model
CMMI also recently released a set of Frequently Asked Questions (FAQs) for its Primary Care First payment model. Primary Care First is a voluntary, five-year alternative payment model to reduce Medicare spending by preventing avoidable inpatient hospital admissions and improve quality and access to care for all beneficiaries, particularly those with complex chronic conditions and serious illness. The model specifically aims to reward value and quality by offering an innovative payment structure to support delivery of advanced primary care.
The Primary Care First model options are only offered in 26 regions, effective January 2021. The 26 regions are: Alaska (statewide), Arkansas (statewide), California (statewide), Colorado (statewide), Delaware (statewide), Florida (statewide), Greater Buffalo region (New York), Greater Kansas City region (Kansas and Missouri), Greater Philadelphia region (Pennsylvania), Hawaii (statewide), Louisiana (statewide), Maine (statewide), Massachusetts (statewide), Michigan (statewide), Montana (statewide), Nebraska (statewide), New Hampshire (statewide), New Jersey (statewide), North Dakota (statewide), North Hudson-Capital region (New York), Ohio and Northern Kentucky region (statewide in Ohio and partial state in Kentucky), Oklahoma (statewide), Oregon (statewide), Rhode Island (statewide), Tennessee (statewide), and Virginia (statewide).
While practice and payer selections will take place Winter-Spring 2020, the model will not actually begin until January 2021.
Direct Contracting Model
The Direct Contracting Model is a set of three voluntary payment model options, with the aim of reducing expenditures and preserving or enhancing quality of care for Medicare FFS beneficiaries through risk-based contracts. CMMI recently opened applications for two of the risk-sharing payment model options, the Professional Option and the Global Option.
The Professional option is the lower-risk option with fifty percent shared savings/shared losses and a primary care capitation equal to seven percent of the performance year benchmark for enhanced primary care services. The Global Option, on the other hand, is a full risk option with 100 percent shared savings/shared losses and either a primary care capitation or total care capitation.
These Model options will start in 2020 and have an initial implementation period for organizations that want to align beneficiaries to meet the minimum beneficiary requirements. Five performance years will follow, beginning with January 2021.
CMS will release more details on the third model, a geographic option, at a later date.