April 16, 2021

David Ault Examines CMS Direct Contracting Model With AIS Health

AIS Health turned to health care counsel David Ault for insight on the new Centers for Medicare & Medicaid Services (CMS) care delivery model and the response from Medicare Advantage organizations (MAOs).

In the RADAR on Medicare Advantage article “MAOs Dabble in FFS Medicare Via Direct Contracting Model,” Ault said it’s a logical step for MAOs to get into direct contracting because it will allow them to use the care management tools that they’re already using in Medicare Advantage (MA), expand their market share and promote the fact that they’re participating in this new model.

However, it does not mean that MAOs will be designing networks in the traditional sense or limiting beneficiaries to certain providers, Ault explained. For example, direct contracting entities (DCEs) could use their managed care tools to identify high-risk patients and incentivize providers to promote “preventive care or the care that they need that prevent hospital admission or more costly downstream expenditures,” he said.

Ault previously oversaw the “Next Gen” Accountable Care Organization (ACO) and other models at CMS. He pointed out that there aren’t growth opportunities right now for ACOs taking full risk in Next Gen, which is slated to end this year, outside of moving into Shared Savings, which would be a step down in risk sharing. At the same time, having the bulk of providers take 100% of the risk in the new Global and Professional Direct Contracting (GPDC) model means automatic savings to the Medicare Trust Fund, Ault added.

While Ault agreed that the model is structured in a way that favors new players, he said it’s a cynical viewpoint that plans are only in this to try to bring lives over to MA. “Personally, I don’t think that’s the driving force. I really think these are organizations that see opportunity in fee-for-service (FFS). If you’re good at something in one area and can expand to a new market and do what you’re good at there and drive revenue, why wouldn’t you?”

Meanwhile, Ault said he knew of several organizations, including MAOs, that had been planning to apply for 2022 and invested resources in those plans only to be disappointed by the pause on new applications.

Ault also shared his suspicion that the CMS Innovation Center, under a new administration that may be more sympathetic to the ACOs, is “building and developing and thinking about what they actually want this next FFS, total cost of care model to look like, and are basically looking at components of everything else that’s out there right now.” Given the time constraints between now and April 2022, he would not be surprised if CMS let this be a two-year model and transitioned to something else afterward with a more level playing field.

The full article is available for RADAR on Medicare Advantage subscribers.

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