Ep 29 – Choosing Your Path in Value: Direct Contracting vs. MSSP, with Rick Goddard

ACOs are increasingly moving into two-sided risk options with MSSP BASIC E and ENHANCED. The Direct Contracting model (with both Professional and Global options) introduces new opportunities and flexibilities that are not included in other CMMI models or through the MSSP. Prospective participants must act now to evaluate their model options in preparation for the 2022 performance year, with both MSSP and DC application cycles quickly approaching. CMS will soon reopen the MSSP for the 2022 performance year, and the application period for DC’s second and final cohort is also expected to open around in Spring 2021, according to CMMI’s latest timeline.  Now is the time for organizations to evaluate options and make decisions.

 To aid in that analysis and decision-making, the ACLC and Lumeris partnered together to develop an intelligence brief (coming soon) that is also the focus of this podcast episode. The brief is designed to help provider organizations who are ready to take on significant levels of downside risk to judiciously evaluate the available options, consider the general opportunities and risk associated with the models, compare the methodological differences between MSSP BASIC Level E and MSSP ENHANCED with DC Professional and DC Global, and assess organizational fit. We share detailed comparisons across 7 key areas:  

  1. Participant Eligibility 
  2. Beneficiary Attributio
  3. Financial Benchmarking 
  4. Quality Performance 
  5. Payment Models 
  6. Financial Settlement  
  7. Additional Benefit

Our guest this week is Rick Goddard, Senior Director of Market Strategy at Lumeris. Rick is a subject matter expert on value-based payment models and primarily serves as an enterprise strategist. Prior to joining Lumeris, Rick served as the Director of Clinical Innovation at Advocate Physician Partners / Advocate Health Care where led the Clinical Innovation Team. His in-depth operational and consulting experience makes him the perfect guest to help organizations considering their next step on this race to value! 

(Information coming from CMS is ongoing and any opinions are not necessarily those of Lumeris, the Accountable Care Learning Collaborative, or our research associate Leavitt Partners.)

Access the transcript for this episode here.

Glossary of Acronyms:

  • MSSP – Medicare Shared Savings Program
  • ACO – a contracted entity in the MSSP
  • DC – Direct Contracting (new CMMI payment model)
  • DCE – a contracted entity in the DC model
  • APM – Alternative Payment Model
  • MA – Medicare Advantage
  • CMS – Centers for Medicare and Medicaid Services
  • CMMI – Center for Medicare and Medicaid Innovation
  • TIN – Tax ID# (ACO participants in the MSSP are contracted by TIN)
  • NPI – National Provider ID # (DCE participants are contracted by the individual NPI)

 

Episode Bookmarks:

4:50 Rick Goddard explains his personal connection with mental health and how that informs his “Why”

6:00 Finding balance and lessons learned from training for the Ironman World Championship

7:00 “What excites me is that value is starting to get momentum in the environment, and that thaws out providers and forces them into the game.”

8:50 The accomplishments of the MSSP (growth, building a bridge to risk, and $2B in savings to date)

11:30 The early years of the Pioneer and MSSP ACO programs and what we learned as an industry

12:30 “The upside-only ACO opportunity didn’t have the teeth, nor did the program offer effective levers for us to succeed in managing the total cost of care.”

12:40 MSSP Challenges (e.g. beneficiary complaints and CCLF opt-outs, delays in data sharing, “black box” reconciliation)

14:00 “There weren’t enough managed care-like designs to assist MSSPs to progress in risk.”

14:40 CMS offering incentives for ACOs to accept risk (e.g. SNF 3-day rule, Telehealth waivers, an availability to work with a prospective attribution model)

15:00 “Up until the Next Generation ACO, there were not options to participate at the NPI level of network inclusion.”

15:40 Because there was no behavioral disincentive to go out of network or stay coordinated within your ACO care-network, ACOs continuously had to innovate to drive in-network value and provide loyalty/stickiness, to drive care coordination across their network.”

16:00 “With us reaching Direct Contracting at this point in time, as its latest innovation in the Medicare ACO, they’ve modeled Medicare Advantage-like levers–and it’s not a coincidence.”

17:30 What do ACOs need to know about the Direct Contracting model and how should ACOs proceed in the 2022 performance year with both the MSSP and Direct Contracting application cycles quickly approaching?

19:20 New entrants allowed in the DC program: (e.g. payer-based conveners, private equity-backed physician aggregators, high-needs organizations, MCOs, etc.)

20:00 DC Covered Entity requirement: DCEs put forth a minimum financial assurance (surety bond line of credit or escrow based) to cover downside losses

20:15 DCE Early-Term Withholds: CMMI looking to ensure providers proceed past the first performance year in Direct Contracting

20:40 DCE Beneficiary Attribution: “claims-based attribution still exist as the core driver for attribution in populations. However, more prominent is the use of voluntary alignment in Direct Contracting.”

21:00 DCEs can choose between prospective alignment (annual determination) and prospective plus alignment (quarterly inclusion period for newly voluntary aligned patients.)

21:30 DC Financial Methodology and Benchmarking Overview: (baseline periods, regional benchmarking)

22:40 “DC does favor the new entrants, because all of their benchmark is based off of regional because they’re all net-new voluntary aligned patients.”

22:55 DC Risk Adjustment Methodology: (CMS HCC prospective scoring, which is similar to how MA is evaluated)

23:10 “While there’s still a cap on risk adjustment expenditures annually, it’s going to be evaluated on an annual rolling basis with its coding intensity factor. Which, if you compare to MSSP across the entire agreement, that’s a substantial improvement.”

23:30 DC Global Discount Methodology: “There’s no discount in MSSP or professional Direct Contracting, but for the global model, it’s an escalating 2-5% over the contract period.”

24:10 DC Quality Performance: “Quality performance is tied to a 5% withhold compared to the benchmark to earn back that first dollar. Most of the measures are either claims-based or patient satisfaction–and since there’s no self-reported measures (that’s a positive thing for reporting), there are fewer measures overall.  Less measures means each individual measure is that much more important.”

25:05 DC Capitation and DCEs Payments to Downstream Providers: DC model allows for flexibility in payment design to downstream providers.

26:00 DC Beneficiary Engagement Incentives:  “Cost sharing is the biggest callout for beneficiary engagement incentives. The ability that you can essentially provide coinsurance coverage to increase access in your beneficiary population to encourage people to come to the doctor more, I think it’s incredibly effective against the cost given these beneficiary incentives will be charged against your– you have to manage to your own benchmark under budget.”

28:10 Rick discusses why voluntary alignment takes precedence over claims-based alignment.

30:40 “Those Geo DCEs that market well and align with strong preferred providers will have consumer engagement plus aligned incentives to drive comprehensive care throughout the DCEs continuum.”

31:00 Rick further explains how the CMS HCC Risk Adjustment model differs between the MSSP and DC models.

32:45 Rick explains the differences in capital requirements between MSSP and DC models.

34:30 The difference in capital requirements between Professional and Geo DCEs is a major hint by CMS is that they’re looking for large players (payer/provider combinations) players with lots of access points.

35:20 The pain inflicted on health systems by COVID-19 and how that will play into their decision to progress in risk with the new DC model.

41:00 How Direct Contracting can impact the ability of a health system to move to an asset-light business model. (“Thinking about the right assets to lower your cost per unit of service and making the right informed decisions on intervention investments is paramount.)

46:00 Rick discusses the benefits of DC over MSSP (i.e. improved cash flow, ability to be creative with beneficiary engagement incentives, tuning up for Medicare Advantage and delegated risk)

48:00 Rick discusses unknowns and potential contra-indications of DC (i.e. discount methodology within Global option, quality withhold, withdrawal penalties)

49:00 “Direct Contracting can be parlayed into multiple population types. So, a lot of the investments you make in the infrastructure can produce a halo effect that can be very powerful across your other populations.”

50:00 Rick on how DC can create mindshare with providers and provide a tune-up for MA by getting comfortable with capitation and downstream payment mechanisms, risk adjustment programs, and functioning under a STAR quality program.

55:20 Preparing a strategy for full-risk (investment in human capital, performance forecasting, analyzing claims data pre-contract, beneficiary engagement, marketing compliance, managing network leakage, building technology infrastructure, SCP sub-capitation, etc.)

59:00 Rick on the importance of competency-based workforce management to be successful in fully-delegated risk APMs.