What the ACO REACH model means for the future of direct contracting
A new path was charted last week for home care providers wishing to engage in direct contracting with the federal government.
As the U.S. Centers for Medicare & Medicaid Services (CMS) announced on Thursday, the Global and Professional Direct Contract (GPDC) models will expire at the end of 2022. On January 1, 2023, the care organization responsible (ACO) “REACH” The model – which stands for “Realizing Equity, Access and Community Health” – will take its place.
While the announcement may have worried some proponents of direct contracts at first, its revamp appears to be confirmation that direct contracts will continue under the Biden administration, albeit with greater scrutiny.
Direct contract models had taken a lot of heat since the administration took over, including from Sen. Elizabeth Warren (D-Mass.).
“The change was also caused, I think, by many concerns expressed in the industry about the participants – and the conditions of participation in the program – more than the operation of the program itself,” said François de Brantes, vice -senior president. of Signify Health Inc. (NYSE: SGFY), Home Health Care News told Home Health Care News.
Dallas-based Signify Health — a tech-enabled value-based care platform — has postponed its bid to become a direct contracting entity (DCE) due to new models historically experiencing some “hiccups” early on. the start, said de Brantes. But in the meantime, he was preparing to eventually become a DCE while helping existing ones.
The ACO REACH model differs from the GDPC models in several ways.
The first is the governance structure. Unlike the GPDC, which required participating suppliers to hold at least 25% of the voting rights of the board of directors, REACH requires that this number is generally 75%.
In addition, a Beneficiary Advocate and a Consumer Advocate must be included in every ACO REACH Board. Within the GPDC, one person could function as both.
Health equity, on the other hand, is the main theme addressed in the transition from the GPDC models to the ACO REACH model. No policies explicitly addressed health equity in the GPDC model.
In the ACO REACH model, however, there are several, including:
– A requirement for all REACH ACOs to develop a health equity plan, which must include both an identification of health disparities and then a concrete plan designed to mitigate those disparities
– The introduction of a “health equity benchmark adjustment”, which will be used to “better support the delivery and coordination of care” for patients in underserved areas
– Collection of data from beneficiaries regarding demographics and social needs
– An increase in the range of services nurse practitioners can order to improve access to care
The ACO REACH model also differs in its discounts for global entities. Below are the discount rates for Professional ACOs at the top – which are not applicable – as well as Global ACOs at the bottom.
The top chart represents the GPDC models while the bottom represents the ACO REACH model.
“Reducing the discount rate for global ACOs to 3-3.5% from the year 2023 will reinforce CMS’s goal of increasing total risk participation [fee-for-service] initiatives,” CMS said.
Among a few other changes, monitoring and compliance measures are much more extensive under the REACH model.
There is also an opportunity to continue to adjust the model in the future, which de Brantes says is inevitable.
“I think there will have to be,” he said. “Especially when you look at the emphasis on [data] collection and the fact that it will be necessary to collect data on social determinants of health from the assigned beneficiaries. It means you have to do something about it. So what do you end up doing about it? How will this adjust things? »
The increased focus on data is a reason to be encouraged by the new model, according to insiders.
So does the increased focus on health equity, at least for providers who already see serving underserved communities as part of their mission, like the current DCE VillageMD.
“Many changes to the model strengthen VillageMD’s strategies and will allow us to expand into more communities to meet the health needs of all residents,” Gary Jacobs, executive director of VillageMD’s policy center, said in a statement. statement shared with HHCN. “At VillageMD, we believe that all Americans have the right to high-quality, team-based primary care. ACO REACH will allow organizations like VillageMD to continue to expand our health equity strategy in a more focused and meaningful way.
VillageMD is a home-based primary care provider. The company is armed with more than $6 billion in backing from the Walgreens Boots Alliance (Nasdaq: WBA).
In 2021, there were 53 DCEs, including VillageMD. This year, there are at least 99, according to CMS data.
“I think we were all very excited when we saw and read the details of the announcement because of the particular focus on reducing inequality,” de Brantes said. “Historically, beneficiaries have been underserved in some areas. And by the way, in these regions, the participation of provider systems in advanced alternative payment models is much lower than in other better served regions of the country.
In the spirit of CMS, focusing on these traditionally underserved areas better underlines the idea of the program in the first place.
If the most underserved beneficiaries can be better served, this should ultimately reduce overall costs and help ACOs and CMSs move closer to their common goal.