NGACO Coalition Feedback on Direct Contracting Model

WASHINGTON, D.C. (Jan, 2020) – The NGACO Coalition’s Feedback on Direct Contracting Model (excerpt)

CMMI Should Reduce the Financial Exposure in the Direct Contracting (DC) Model

Issue: The current financial model includes a 2-5% discount for global model participants; a 2% retention withhold for early termination; a 5% quality withhold; and a leakage withhold. CMMI limits the maximum upward and downward adjustment that can result from incorporating regional expenditures into the benchmark, with an upward limit of 5% and a downward limit of 2%. CMMI has not yet released the risk adjustment methodology for DC. The total impact of these withholds and discounts represents significant risk exposure for participants.

NGACO Coalition Recommendations:

  • CMMI should reduce or waive some of the model’s withholds and discounts:
    • CMMI should waive the 2% retention withhold for entities with experience with two-sided risk as they have made significant investments in the infrastructure to manage risk and have demonstrated their commitment to do so.
    • CMMI should reduce the discount percentage in the global model.
    • CMMI should increase the cap on the regional component of the benchmark from 5% to 10% to align with Next Gen. The floor should remain at 2%.
  • CMMI should ensure that the DC risk adjustment methodology aligns to the risk adjustment methodology for Medicare Advantage (MA) (i.e., uncapped).
  • In the global model total care capitation track, DCEs should be able to negotiate their capitation with CMS, including the option for a seasonality adjustment to reflect on-the-ground factors specific to the DCE’s patient population. DCEs should have the option for a higher upfront payment and reconciliation, similar to the approach offered for primary care capitation.
  • CMMI should allow Standard DCEs to nest High Needs DCEs. Removing the most complex subset of the population and those providers creates substantial financial risk and results in an unfair playing field for Standard DCEs as compared to High Needs DCEs.

The full feedback document, including other issues and recommendations, is available here.