Contracting Model Still Holds Promise for MAOs

by Lauren Flynn Kelly

After progressive Democratic lawmakers urged CMS to shut down a fee-for-service Medicare model aimed at fostering more value-based care arrangements, the agency’s Center for Medicare and Medicaid Innovation (CMMI) on Feb. 24 unveiled a revamped version that it said more closely aligns with its “vision of creating a health system that achieves equitable outcomes through high quality, affordable, person-centered care.”  

While the three types of Accountable Care Organizations (ACOs) that may participate starting next year appear to largely mirror the Direct Contracting Entities (DCEs) of the current Global and Professional Direct Contracting (GPDC) Model, CMS aims to ensure that participants in the new model operate as provider-led organizations, have a proven track record of providing care in underserved communities and will not be shifting any enrollees into Medicare Advantage — a key concern expressed by lawmakers and advocates. 

CMS enhances provider-led standards 

• CMS on Feb. 24 issued a request for applications (RFA) for the new REACH model and said accepted applicants on Aug. 1 may begin participating in an implementation period that would run through the end of the year.  
• According to a side-by-side comparison of the REACH and GPDC models, participating providers must now have at least 75% of the governing board voting rights, up from the previous requirement of at least 25%.  
• Moreover, each REACH ACO must include a beneficiary representative and a consumer advocate, who must hold governing board voting rights and be different people, whereas the GPDC said those roles could be filled by the same person and neither needed to have voting rights, explained CMS. 

CMS seeks to limit risk score gains 

• In a Feb. 25 note from Citi, analyst Jason Cassorla said “soft” changes such as the increased governing board voting rights will be “relatively easy to comply with and are not likely to impact the financial performance of the participating entities.”  
• Some harder changes, however, may have a more material impact down the line, he cautioned. These include tying the symmetrical 3% risk score cap to demographic changes in the underlying population over time — potentially limiting risk adjustment on a relative basis — and lowering the Global ACO discount rate to encourage participation in the full-risk track.  

MAOs Could Still Theoretically Apply 

• While most of the 99 participants are provider-led organizations, MA insurers Bright Health, Clover Heath and Humana Inc. have DCEs in the 2022 performance year. CMS also lists Aetna subsidiary ActiveHealth as a High Needs Population DCE for 2022, and Cigna Corp. at press time unveiled its participation through the company’s CareAllies subsidiary.
• Aisha Pittman, vice president of policy with Premier Inc., a value-based consulting partner to health systems and physician groups, says she doesn’t see anything in the new RFA that would prevent an MAO from applying. “I think what we’ll likely see happen with the MA organizations is that they’ll form a new entity so that with the board structure they can meet the requirements,” she tells AIS. 

From Radar on Medicare Advantage

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