CMS' Direct Contracting (now ACO REACH) 2022 Results

Seriously ill and complex populations are not getting the support they need. CMS has created incentives to more holistically care for these beneficiaries, and few entities have elected into them.

In this week’s newsletter, I’ll primarily cover the 2022 results of the CMS Innovation Center’s alternative payment model for fee-for-service beneficiaries called the High Needs Direct Contracting Program (called the High Needs ACO REACH program beginning in 2023..

Last week, the Centers for Medicare and Medicaid Services (CMS) released the results for the Direct Contracting Model’s 2022 Performance Year, the last year for the model before it was renamed and revamped as ACO REACH.

I was not surprised to see that the High Needs Population DCEs saved substantially more than Standard and New Entrant DCEs, on average. These complex, often seriously ill patients need much more wraparound support than they receive in fee-for-service.

Net Savings Rate by Direct Contracting Entity Type

• 78 Standard DCEs: 1.8% savings rate

• 13 New Entrant DCEs: 5.0% savings rate

• 8 High Needs Population DCEs: 12.6% savings rate

Only 8 organizations took advantage of the flexibilities and new CMMI HCC concurrent risk-adjustment model (developed to more accurately predict costs and establish benchmarks for high needs/seriously ill populations whose conditions may rapidly deteriorate and differ greatly from the prior year) to participate in the High Needs DCE.

I was bullish on the High Needs DCE since I first analyzed the opportunity in 2020. It creates a viable way to provide more wrap-around care in the home to those at the highest risk of the highest spend and negative patient experience.

Throwing it back, here’s a quote from an article my former employer, ICS, and ATI Advisory sponsored in Health Affairs in 2021:

The Bloom Healthcare website states they provide the following services in the home:

• chronic care management

• palliative care

• care transitions

• dementia care

So speaking of dementia care, it wouldn’t surprise me if Bloom participates in the GUIDE Dementia Model starting in 2024, which allows overlap with ACO REACH and MSSP. It’s a natural fit with savings and quality opportunities through home visits, home respite, and other services by providers, clinicians, and supporting organizations.

I’ll share the list of GUIDE participants once they are announced by CMS in the first half of 2024. For now, we are waiting on the Request for Applications, due to be released soon. I’ll be looking for overall ACO REACH overlap, especially for High-Needs entities.

Reasons to Invest in Caring for High Needs and Seriously Ill Beneficiaries Through Program Incentives (like ACO REACH and Medicare Advantage Special Needs Plans (SNPs):

There are many high-value cost-reduction and quality improvement levers! Here are a few:

• Palliative care, including progressive advanced care planning to prevent end-of-life hospitalizations and more comfort for seriously ill patients

• 24/7 support lines

• Activate in-home Medicare-covered services such as OT (home safety and modifications, ADLs), PT (falls risk reduction, balance training, building functional strength and power), behavioral health, registered dietician services, and much more

• Complex care management services

• Hospital-at-Home, SNF at Home

• In-home nursing, social worker, community health worker visits through program flexibilities

• Caregiver/care partner training and support

I suspect the limited participation in this model, despite substantial financial and quality opportunity levers, is because the home isn’t a place providers have provided care the last few decades.

No surprise—few incentives. Unpaid “windshield time” disincentivizes home provider visits in fee-for-service. For the most part, policy proposals to increase reimbursement for fee-for-service physician visits in the home haven’t gained much traction—yet.

But alternative payment models and COVID pandemic regulatory waivers and flexibilities are showing us we can care for patients in their home through in-person and technology-enabled care and by providing higher-touch, more comprehensive services where complex patients may benefit from it most.

As always, please share this post with a friend who might be interested!