‘Very false and misleading’ reviews of direct contracts fueled controversy over model, stakeholders say

Diving Brief:

  • Controversy over a direct-contract model that the Biden administration renamed and redesigned earlier this year following pressure from progressive Democratic lawmakers and single-payer advocates was overblown and unfounded in fact, some members of the House say. responsible care community.
  • Popular opposition to the Trump-era model, in which doctors can accept full or partial capitation as payment in traditional Medicare, intensified late last year and rippled until Capitol Hill in 2022. Critics have slammed the direct contracts as a thinly veiled effort to privatize Medicare’s fee-for-service program, even as hundreds of providers have voiced support.
  • The National Association of Accountable Care Organizations found these concerns to be “highly false and misleading,” NAACOS senior policy adviser David Pittman told NACOS Spring Conference Friday. “If politics could kill a CO model, it would be devastating.”

Overview of the dive:

The Trump administration unveiled the original direct contract model in 2019, with the aim of coordinating primary and specialty care, while enabling access to enhanced benefits. It offered a higher level of risk and reward than other ACO models at the time, which earned it strong support from many healthcare systems, physicians, and medical group organizations.

Proponents said holding doctors accountable for outcomes meant patients would be more likely to receive team-based preventive care that improved outcomes while reducing costs.

However, critics argued that the model was a step toward privatizing Medicare by allowing various entities, including those owned by private equity firms, to manage patient care, and would increase program costs to cash-strapped while impeding patient access.

The antagonistic rhetoric around the model escalated late last year, with members of Physicians for a National Health Program, which supports a single-payer system, staging a protest outside the HHS building in Washington, D.C. , in December.

The issue eventually caught the attention of lawmakers. Direct contracts came under increased criticism during a February hearing of the Senate Finance Committee.

President Elizabeth Warren, D-Mass., called on the administration to immediately end the model, say in his introductory remarks that direct contracts would open the door to “insurers already ripping off Medicare and dozens of investor-owned organizations” to cover beneficiaries while pocketing “up to 40% of profits.”

“President Biden should not allow Medicare to be handed over to corporate profiteers,” Warren said.

However, regulators have argued that it would be disruptive to phase out the model entirely. More than 200 supplier groups called on the government to change direct contracts instead.

At the end of February, the CMS announced that it would keep the model, but with many changes and a new name: Accountable Care Organization Achieving Equity, Access and Community Health (ACO REACH) Model.

Now the ACOs say the problem has been exaggerated.

The discussion on Capitol Hill was rooted in a “genuine lack of understanding” around the beneficiary protections and cost investments inherent in ACOs, said Melanie Matthews, CEO of the physician group Physicians of Southwest Washington.

“The unfortunate thing is that a number of us share the view that much of this discussion just wasn’t fact-based. And that’s not a positive thing. that came out,” Corey Rosenberg, ACO REACH Model Lead at the CMS Innovation Center, said.

Gary Jacobs, executive director of the Center for Public Policy at VillageMD, said the value-based primary care network predicted direct contracting would be a political issue after its late introduction in the Trump administration.

But “the argument that we can game the system to make money is bullshit,” Jacobs said.

Panelists noted that the negative rhetoric – which some say was initially based on well-founded concerns about private equity in healthcare before snowballing – has also challenged the continued push for care. value based.

“It’s just as threatening to the underlying ACO movement as it is to the underlying direct contract model,” Matthews said.

According to Andrew Allison, CEO of direct contracting entity On Belay Health Solutions, it’s important that healthcare organizations “never assume” that elected officials understand the details of their industry or the programs in which they are involved. Many ACOs assumed the heat would blow over, but soon found themselves on the wrong side of the messaging debate as public opinion opposed the model.

“We have to stay on the offensive and keep the rhetoric positive,” Allison said.

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