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CMS Announces New Model to Advance Regional Value-Based Care in Medicare

Today, the Centers for Medicare & Medicaid Services announced a new and transformative voluntary payment model that builds on CMS’ focus to deliver Medicare beneficiaries value through better care and improved quality. The Geographic Direct Contracting Model (the “Model”) will test an approach to improving health outcomes and reducing the cost of care for Medicare beneficiaries in multiple regions and communities across the country. Through the model, participants will take responsibility for beneficiaries’ health outcomes, giving participants a direct incentive to improve care across entire geographic regions. Within each region, organizations with experience in risk-sharing arrangements and population health will partner with health care providers and community organizations to better coordinate care.

Beneficiaries in the model will maintain all of their existing Original Medicare benefits, including the ability to see any provider they choose. Beneficiaries may also receive enhanced benefits, including additional telehealth services, easier access to home care, access to skilled nursing care without having to stay in a hospital for three days, and concurrent hospice and curative care. Participants will also have the ability to reduce beneficiary cost sharing for Medicare Part A and Part B services as well as offer beneficiaries a Part B premium subsidy. Lower out-of-pocket costs will allow participants to encourage beneficiaries to seek high-value care while maintaining the freedom and choice beneficiaries have in the Original Medicare program. While providers and participants may choose to voluntarily enter into value-based arrangements, the Model will not change how Medicare-enrolled providers care for beneficiaries in Original Medicare today.

“The need to strengthen the Medicare program by moving to a system that aligns financial incentives to pay for keeping people health has long been a priority,” said CMS Administrator Seema Verma. “This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality, and lower the cost of care for Medicare beneficiaries in a community.”

Participants will work within defined geographic regions to maintain and improve care coordination, leveraging beneficiaries’ existing provider relationships as well as developing innovative care delivery solutions that take into account a region’s  unique, local needs.

Specifically, Model participants will coordinate care and clinical management for beneficiaries in Original Medicare in their region. This coordination may include care management services, telemedicine, as well as help for beneficiaries to understand which providers have a history of delivering better results and lower costs over the long-term. Beneficiaries in the model will remain in Original Medicare and maintain all of their benefits and coverage rights. Beneficiaries will also keep all of the protections of Original Medicare, including access to all Medicare providers and suppliers, the freedom to choose and change providers at any time, and a strong appeals and Ombudsman system.

To help with delivering improved outcomes, participants may create a network of preferred providers, armed with the Model’s enhanced flexibilities to provide the right care for beneficiaries at a lower cost. Participants and preferred providers may choose to enter into alternative payment arrangements, including prospective capitation and other value-based arrangements. Participants will also work to augment Medicare’s current program integrity efforts, reducing fraud, waste, and abuse in their region and decreasing costs for beneficiaries and taxpayers.

“The Geographic Direct Contracting Model is part of the Innovation Center’s suite of Direct Contracting models and is one of the Center’s largest bets to date on value-based care,” said CMMI Director Brad Smith. “The model offers participants enhanced flexibilities and tools to improve care for Medicare beneficiaries across an entire region while giving beneficiaries enhanced benefits and the possibility of lower out-of-pocket costs. By initially testing the model in a small number of geographies, we will be able to thoughtfully learn how these flexibilities are able to impact quality and costs.”

Organizations that are potentially interested in participating in the Model should submit a non-binding Letter of Interest to CMS by 11:59pm PT, December 21, 2020 through this link: Geographic Direct Contracting Model Letter of Interest. Letters of Interest will be used to determine the final regions in which CMS will solicit participants.

The Request for Applications will be made available in January 2021, and Applications will be due on April 2, 2021.  Model Participants will be selected by June 30, 2021.  The first three-year performance period will run from January 1, 2022 through December 31, 2024.  A second three-year performance period will run from January 1, 2025 through December 31, 2027.

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