Value Based Payment

In response to providers, CMS offers further specifics about direct contracting

February 14, 2020 5:13 pm
  • Providers’ concurrent participation in the new direct-contracting model and ACOs will be limited to 2020.
  • CMS is planning no further application periods after the second such period in the spring of 2020.
  • Marketing guidance to providers seeking to ensure a sufficient number of enrollees may be released later.

Medicare has clarified that providers cannot participate in both accountable care organizations (ACOs) and coming direct-contracting arrangements after 2020. The clarification — and others — came amid early provider feedback on the model, which is slated to start this spring.

Providers sought a range of clarifications on the Direct Contracting model from staff of the Centers for Medicare & Medicaid Services (CMS) during a series of webinars throughout December.

In the model, the various options allow CMS to directly contract with Medicare providers and suppliers, which will have financial accountability for the cost and quality of care of for a defined beneficiary population. CMS staff has described the new models, which run through 2025, as an update to its ACO program. Coincidentally, the Next Generation ACO model ends in December 2020.  

In response to what CMS staff described as a common question, they clarified that Direct Contracting (DC) providers’ participation in any type of Medicare ACO will be limited to 2020, which serves as a partial-year test period for the DC model before its formal start in January 2021. CMS is accepting applications for 2020 through its newly released tool until Feb. 25 but only from providers that submitted a letter of intent by Dec. 12.

CMS officials plan to begin accepting applications for the 2021 performance year sometime in the spring of 2020. No additional application periods will be offered, CMS officials said.

The information followed requests from provider advocacy groups for CMS to allow such cross-model participation in 2020.

Deadline details offered

Other clarifications that could affect providers’ participation timelines include:

  • Providers can skip the 2020 period and start participation in 2021.
  • Providers can participate in 2021 without applying if they participate in 2020.
  • Participation in 2020 could give providers time to recruit enough Medicare beneficiaries for 2021 participation, CMS officials noted.
  • Providers that participate in 2020 can drop out by 2021.
  • Providers that participate in 2020 can change the track in which they participate in 2021.
  • The model will prohibit benefit enhancements for Medicare beneficiaries in 2020 before allowing them starting in 2021.

Beneficiary components addressed

Providers have sought many details regarding attribution of Medicare enrollees under direct contracting, including whether outreach would be improved compared with the ACO program.

The new model will use both claims-based assignment and voluntary alignment by beneficiaries, with CMS clarifying that voluntary enrollments usually will take precedence. But the National Association of ACOs noted that voluntary alignment has been available in the ACO program since 2018, and “we have been disappointed by the lack of uptake by seniors.”

Regardless, CMS will limit enrollment options to either paper forms or digital sign-ups at

Additionally, provider advocates have sought more guidance on how they can market the model to Medicare beneficiaries to garner the requisite participation levels. For now, CMS officials say they are using Medicare Advantage marketing rules as guidance and that more marketing details are “coming.”

Other beneficiary-related details that CMS addressed after queries from providers included:

  • Participation of both Medicare fee-for-service beneficiaries and dual-eligible enrollees is allowed.
  • Beneficiaries can remain aligned with their provider even if they opt out of data sharing.
  • Providers can furnish beneficiaries with lists of “high value providers” that are aligned with the participating provider.
  • Participating providers can conduct outreach to potential patient enrollees, although the nature of that outreach has not been specified.

What types of providers can participate?

Providers sought more clarification on which types of organizations can participate in the new model. CMS staff said qualifying participants include:

  • Individual practices
  • Group practices
  • Individual physicians
  • Critical access hospitals
  • Federally qualified health centers
  • Rural health centers

Although Medicare Advantage plans were allowed to apply, CMS staff said they were still considering whether Medicaid plans can manage their dual-eligible enrollees as part of the program.

Other operational details included:

  • An applicant can operate both standard and “high needs” direct-contracting entities (DCEs) in the same geographic area.
  • Separate applications will be required for standard and high-need DCEs.
  • DCEs can annually add to their provider lists.
  • DCEs will receive new lists of assigned beneficiaries each year of the model.
  • Participating providers can negotiate their own payment arrangement with the DCE instead of accepting capitated payments from CMS.
  • Switching between model types in the last three years of the program will be limited to changes that increase risk.

Additional updates and responses to provider queries will come through CMS events scheduled for Jan. 7 and Jan. 8.


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