More on Accountable Care

NAACOS urges CMMI to release more information on new payment model

Lack of information on key financing aspects is preventing ACOs from signing on, says NAACOS president.

Susan Morse, Managing Editor

The National Association of Accountable Care Organizations said ACOs need more information about the Centers for Medicare and Medicaid Services'  forthcoming value-based Direct Contracting Model before being willing to sign on, the head of NAACOS has told the director for the Center for Medicare and Medicaid Innovation.

"Foremost, key details on the financial methodology have yet to be released and other important questions remain unanswered," Clif Gaus, president and CEO of the National Association of ACOs told Brad Smith, director of CMMI and senior advisor for Value-Based Transformation, CMS. "Our members are finding the lack of information a tremendous hindrance to participation."
ACOs need specifics around benchmarking, risk adjustment and capitated payments, Gaus said.

"Release more information as soon as possible," Gaus said in the February 20 letter.  The deadline for the Direct Contracting implementation period is fast approaching and applications for 2021 are three months away, he said.

HIMSS20 Digital

Learn on-demand, earn credit, find products and solutions. Get Started >>

"Without these details, it's impossible for the healthcare community to make informed decisions about program participation," he said. "Direct Contracting entities will still be analyzing how they'll fit in the program once key details are released and applications are due."


NAACOS fears that without changes or additional information, organizations that are ready to take on payment reform in value-based models will not participate in the new Direct Contracting Model.

CMS's Innovation Center announced the new model last April, with the Request for Applications posted in November.

There are two voluntary direct contracting options that will qualify as advanced alternative payment models starting in the first performance year in 2021.

The first option is Professional, which is lower-risk, consisting of 50% shared savings/shared losses and primary care capitation equal to 7% of the total cost of care benchmark for enhanced primary care services.

The Professional option is testing a more gradual onramp to fully capitated payment under the second, Global option.

The Global option is one of full risk of 100% shared savings and shared losses in either primary care capitation or total care capitation, which encompasses all Medicare Part A and B services.

The Direct Contracting Model builds on lessons learned from the Medicare Shared Savings Program Next Generation ACO Model, which ends this year.

It is expected to broaden participation as it will appeal to a broad range of physician organizations and other types of health organizations, CMS said.

It offers capitation rates and high levels of risk and reward.


NAACOS said the Innovation Center should:

  • Minimize the "discount" levels --the amounts Medicare keeps for itself to ensure the program saves money -- to make the chances of providers achieving savings more realistic.
  • Waive the 2% "retention withhold" -- the penalty an organization would have to pay if it were to drop out before the end of the second year.
  • Allow providers to dually participate in both a High Needs and Standard Direct Contracting Entity and make public the algorithm used to identify high-needs patients.
  • Increase the shared savings rate for Professional Direct Contracting to 75% to make it an attractive option for those DCEs that are not ready for full risk.
  • Allow Primary Care First practices to terminate participation in that model without penalty in order to participate in Direct Contracting.
  • Align application timelines and participation-decision deadlines between Direct Contracting and other ACO models to the greatest extent possible.
  • Consider alternative mechanisms to feed organizations claims data.
  • Create additional application cycles for organizations to start in Direct Contracting in 2022 and later.


"Direct Contracting was released with great fanfare and excitement, but the provider community is still lacking key information, such as that of the financial structure on which the model is based," Gaus said. "Without these details and answers to lingering questions, MSSP or non-participation in alternative payment models would be a more attractive and stable option compared to Direct Contracting."

Twitter: @SusanJMorse
Email the writer: