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Three quarters of ACOs in direct contracting model earned savings

The Global and Professional Direct Contracting Model is now ACO REACH.

Susan Morse, Executive Editor

Photo: The Good Brigade/Getty Images

The Global and Professional Direct Contracting Model for Performance Year 2022 saved the Centers for Medicare and Medicaid Services $371.5 million and saved direct contracting entities $484.1 million, according to the agency's first evaluation report of the model.

This represents an increase from $70.4 million in savings to CMS and $46.5 million in net savings to direct contracting entities (DCEs) in 2021.

Ninety-nine DCEs, compared to 53 in 2021, participated in the program in 2022, the second year of the model. CMS has quality and financial results for each model participant.

The GPDC Model was a voluntary accountable care organization model designed to put patients at the center of their care by providing incentives for care coordination and team-based care, and by rewarding better patient outcomes and higher quality, CMS said.

National Association of ACOs president and CEO Clif Gaus said that, of those that participated, more than three-quarters earned savings. Collectively, they generated $870 million in gross savings and $484 million in net savings after accounting for shared savings and losses and discounts paid, according to Gaus.

This represents a nearly 3% savings rate for the 99 model participants. Importantly, gross savings increased more than seven times between 2021 and 2022, driven by growth in participation, he said.

The data reaffirms the need to invest in alternative payment models that hold providers accountable for patients' total cost of care and quality, NAACOS said.

Direct contracting offers flexibilities and waivers to tests hybrid payment such as receiving population-based payments rather than fee-for-service payments, CMS said.

Notably, direct contracting does not impose prior authorization, according to NAACOS.

The GPDC Model has since morphed into ACO REACH, (Realizing Equity, Access and Community Health), which launched on January 1.

WHY THIS MATTERS: RESULTS AND EXPECTATIONS

The average total quality score for 2022 was 99.4% across the 91 Standard and New Entrant DCEs, and the average quality score was 99% across the eight High Needs Population DCEs.Just 11 total ACOs (11%) had quality scores that were below 100%.

The 2022 quality results indicate a slight improvement compared to 2021, though the 9-month length of the first model year limited the comparability of year-over-year changes.

For the ACO REACH Model, beginning in 2023, quality measurement is assessed on a 100% Pay-For-Performance basis rather than a Pay-for-Reporting basis, as has been the case.

This means ACOs will earn their quality withhold of 2% of benchmark purely based on their performance across all quality measures, the majority of which are patient-outcomes based.

More specifically, in 2023ACOs will be evaluated on their ability to reduce unplanned hospital admissions for patients with multiple chronic conditions and all-cause hospital readmissions, improve patient experience as captured by the Consumer Assessment of Healthcare Providers and Systems (CAHPS), and increase rates of Timely Follow-Up Care or Days at Home for Patients with Complex, Chronic Conditions.

The shift from 20% to 100% Pay-For-Performance quality score assessment may result in more variation in quality scores among ACOs in 2023, CMS said, as the agency incentivizes performance across the measures.

THE LARGER TREND

ACO REACH replaced the Global and Professional Direct Contracting Model.

The Global and Professional Direct Contracting Model was controversial because opponents, including progressive Democrats, believed it would lead to the privatization of Medicare.

Physicians for a National Health Program, an organization of 25,000 doctors who supported Medicare for All and opposed Medicare privatization, rejected the ACO REACH modelas well.

In August, CMS announced changes to ACO REACHfor 2024 that it said were a response to stakeholder feedback. The changes were designed to increase predictability for model participants, protect against inappropriate risk score growth, maintain consistency across CMS programs and Center for Medicare and Medicaid Innovation models, and further advance health equity, CMS said.

NAACOS said the changes included needed financial protections from midyear changes to benchmarks and updates to risk adjustment policies

ACO Reach came under scrutiny in 2022, when an estimated 20 lawmakers reached out to CMS over alleged fraud. Lawmakers expressed concern that at least 10 participants in the earlier model had records of healthcare fraud.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org