Direct Contracting (Professional And Global) Frequently .

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Direct Contracting (Professional and Global)Frequently Asked QuestionsVersion 3Date: October 2020ContentsGeneral Questions . 2Application Process. 6Eligibility. 9Beneficiary Alignment. 14Benefit Enhancements and Beneficiary Engagement Incentives . 17Financial Model. 19Quality and Reporting. 19Appendix . 23

General Questions1. Q: What is the Direct Contracting Model?The Direct Contracting Model creates a new opportunity for the Centers for Medicare & Medicaid Services(CMS) Center for Medicare and Medicaid Innovation (Innovation Center) to test an array of financial risksharing arrangements expected to reduce Medicare expenditures while preserving or enhancing thequality of care furnished to beneficiaries. The Direct Contracting Model leverages lessons learned fromother Medicare Accountable Care Organization (ACO) initiatives, such as the Medicare Shared SavingsProgram and the Next Generation ACO (NGACO) Model, as well as innovative approaches from MedicareAdvantage (MA) and private sector risk-sharing arrangements. This model is part of a strategy by the CMSInnovation Center to use the redesign of primary care as a platform to drive broader health care deliverysystem reform. The model creates a variety of pathways for participants to take on financial risk supportedby enhanced flexibilities. Because the model reduces burden, supports a focus on complex, chronicallyand seriously ill patients, and aims to encourage organizations to participate that have not typicallyparticipated in Medicare fee-for-service (FFS) Innovation Center models, we anticipate that this modelwill appeal to a broad range of physician organizations and other types of health organizations.2. Q: What are the model options under Direct Contracting?The CMS Innovation Center will test up to three voluntary risk-sharing options: 1) Professional, a lowerrisk option (50 percent Shared Savings/Shared Losses) and Primary Care Capitation (PCC) equal to sevenpercent of the total cost of care benchmark for enhanced primary care services; and 2) Global, a full riskoption (100 percent Shared Savings/Shared Losses) and either PCC or Total Care Capitation (TCC). CMShas also sought comment on a potential third option, the Geographic Option, which is another full riskoption (100 percent Shared Savings/Shared Losses) that will offer an opportunity for participants toassume total cost of care risk for Medicare Parts A and B services for Medicare FFS beneficiaries in adefined target region. Please note that the current Request for Applications (RFA) is for theProfessional and Global Options of Direct Contracting only. CMS anticipates issuing an RFA for theGeographic Option at a later date.3. Q: What are the benefits of participating in Direct Contracting?Direct Contracting is intended to test whether the risk-based payment strategies available under themodel align financial incentives and offer model participants (Direct Contracting Entities or DCEs)flexibility in engaging health care providers and patients in care delivery that results in preserving orenhancing quality of care while at the same time reducing the total cost of care. Specifically, DirectContracting offers: Multiple risk-sharing arrangements, Flexible beneficiary alignment options, including enhancements to voluntary alignment relativeto existing Medicare initiatives, Capitation payment options that vary by risk-sharing arrangement, Benefit enhancements and payment rule waivers to improve care coordination and servicedelivery, A focus on complex chronic and seriously ill beneficiaries, and Options for organizations that have not participated in Medicare FFS previously2

4. Q: How many years is Direct Contracting? (Updated, October 2020)The model will be implemented over six performance years (PY1-6), with an optional initialImplementation Period (IP). The IP will occur from October 2020 through March 2021, PY1 will occurfrom April 2021 through December 2021, and PY2, PY3, PY4, PY5 and PY6 will occur in calendar years2022, 2023, 2024, 2025, and 2026 respectively. Note that the addition of PY6 is a policy change from theRFA due to the challenges posed by coronavirus disease 2019.Since a number of model design features vary by year, we have summarized the changes here alongwith the original policy from the RFA for reference (note that the parameters listed in the table belowapply both to DCEs that start in PY1/2021 and PY2/2022):Revised model timeline and ‘time-dependent model parameters’:Calendaryear / PYBenchmark discountfor Global DCEsNew Entrant / High NeedsDCEs beneficiary minimumNew Entrant & HighNeeds DCEs Benchmarking2021*/PY12%1,000 / 250Rate book-drivenEarn back for 5%quality withhold1% performance,4% reporting2022/PY22%1,000 / 250Rate book-driven1% performance,4% reporting2023/PY33%2,000 / 500Rate book-driven5% performance2024/PY44%3,000 / 750Rate book-driven5% performance2025/PY55%5,000 / 1,200Baseline-driven5% performance5,000 / 1,400Baseline-driven5% performance5%2026/PY6* April 1 – December 31, 2021Original model timeline and ‘time-dependent model parameters’ from the RFA:Calendaryear / PYBenchmark discountfor Global DCEsNew Entrant / High NeedsDCEs beneficiary minimumNew Entrant & High NeedsDCEs BenchmarkingEarnback for 5%quality withhold2021/PY12%1,000 / 250Rate book-driven5% reporting2022/PY22%2,000 / 500Rate book-driven5% performance2023/PY33%3,000 / 750Rate book-driven5% performance2024/PY44%5,000 / 1,200Baseline-driven5% performance2025/PY55%5,000 / 1,400Baseline-driven5% performance5. Q: What is the purpose of the Implementation Period (IP) and when will it begin?To help organizations new to Medicare FFS and/or Innovation Center models build an aligned MedicareFFS population, Direct Contracting provides enhanced opportunities for voluntary alignment relative toexisting Medicare initiatives. The optional IP provides DCEs with additional time to engage in beneficiaryalignment activities and plan their care coordination and management strategies prior to the firstperformance year (PY2021), which begins April 1, 2021. The optional IP will begin in October 2020.3

6. Q: What is a DCE?A DCE is a legal entity which participates in Direct Contracting pursuant to a Participation Agreement withCMS. Various types of organizations may apply to become a DCE including Accountable Care Organizations(ACOs). Under Direct Contracting, there will be three types of DCEs with different characteristics andoperational parameters. These three types of DCEs are:1. Standard DCEs – DCEs comprised of organizations that generally have experience servingMedicare FFS beneficiaries, including Medicare-only and dually eligible beneficiaries, who arealigned to a DCE through voluntary alignment or claims-based alignment. These organizationsmay have previously participated in section 1115A models involving shared savings models (e.g.,Next Generation ACO Model and Pioneer ACO Model) and/or the Shared Savings Program.Alternatively, new organizations, composed of existing Medicare FFS providers and suppliers, maybe created in order to apply to participate as this DCE type. In either case, CMS expects thatproviders and suppliers participating within these organizations would have substantialexperience serving Medicare FFS beneficiaries.2. New Entrant DCEs – DCEs comprised of organizations that have not traditionally provided servicesto a Medicare FFS population and that will primarily rely on voluntary alignment, at least in thefirst few performance years of the model, to attain the minimum number of aligned beneficiaries.Claims-based alignment will also be utilized.3. High Needs Population DCEs – DCEs that serve FFS Medicare beneficiaries with complex needs,including dually eligible beneficiaries, who are aligned to the DCE through voluntary alignment orclaims-based alignment. These DCEs are expected to use a model of care designed to serveindividuals with complex needs, like the one employed by the Programs of All-Inclusive Care forthe Elderly (PACE), to coordinate care for their aligned beneficiaries.7. Q: How can a DCE assess if they meet the requirements to be a Standard DCE, New Entrant DCE orHigh Needs Population DCE, for example, if they have sufficient level of experience with MedicareFFS to be a Standard DCE? (Updated, October 2020)Key criteria are outlined below. Complete details of each of the three DCE types are available in the RFA.Standard DCEs Organizations with substantial experience serving Medicare FFS beneficiaries. These may beorganizations that previously participated in section 1115A shared savings models (e.g.,Next Generation ACO Model and Pioneer ACO Model) and/or the Shared Savings Program,or new organizations, composed of existing Medicare FFS providers and suppliers created inorder to participate in Direct Contracting. Required to have a minimum of 5,000 aligned beneficiaries prior to the start of eachPerformance Year from PY1 through PY6.New Entrant DCEs Organizations with less experience serving a Medicare FFS population and / or taking risk forFFS Medicare beneficiaries. May not have more than 50% of DC Participant Providers with prior experience in theShared Savings Program, the Next Generation ACO Model, the Comprehensive ESRD CareModel, the Pioneer ACO Model or CPC Model*4

Must meet an increasing minimum number of aligned beneficiaries, with a minimum of atleast 1,000 beneficiaries prior to the start of PY1 and PY2, 2,000 prior to the start of PY3,3,000 prior to the start of PY4, and 5,000 prior to the start of PY5 and PY6. May not have more than 3,000 beneficiaries that are “alignable” through claims-basedalignment in any base year (2017, 2018 and 2019) or in Performance Years 1-4. CMS willevaluate this by assessing the volume of services provided by the applicant’s proposed DCParticipant Providers to Medicare FFS beneficiaries. Any FFS beneficiaries with a plurality ofPrimary Care Qualified Evaluation & Management (PQEM) claims billed by a DCE’s proposedDC Participant Providers in a given year will be considered “alignable” in that year*.*Organizations found ineligible to participate on the basis of this criterion will have theopportunity to participate as a Standard DCE, provided all other model requirements are met.High Needs DCEs Organizations with experience serving high cost, high acuity individuals. Where applicable, CMS will also assess an organization’s experience providing a range ofMedicaid-covered services and demonstrated ability to coordinate services across Medicareand Medicaid for dually eligible beneficiaries, and prevent unnecessary utilization of highercost institutional care. Required to have demonstrated capabilities in coordination of services that emphasizeperson-centered care, such as an interdisciplinary care team that includes primary care,behavioral health, and Long-Term Services and Supports (LTSS) providers and that managescare across a range of settings. Must meet an increasing minimum number of aligned beneficiaries, with a minimum of atleast 250 beneficiaries prior to the start of PY1 and PY2, 500 prior to the start of PY3, 750prior to the start of PY4, 1,200 prior to the start of PY5, and 1,400 prior to the start of PY6.In addition to the beneficiary eligibility requirements that apply to all beneficiaries in DirectContracting, beneficiaries must meet additional eligibility requirements to be aligned to aHigh Needs DCE – see page 54 of the RFA for details.8. Q: Can a DCE move between the Global and Professional options?Before signing the PY1 Participation Agreement, the DCE may switch from Global to Professional, andvice versa. The DCE cannot move from Global to Professional options once participation has begun. Ifthe DCE wants to increase from Professional to Global, it can change only at the following times: Submit its change during the IP, to take effect PY1During PY2, to take effect PY3During PY3, to take effect PY4During PY4, to take effect PY5During PY5, to take effect PY6Please note that this information was updated after the release of the RFA dated November 25, 2019.9. Q: Is Direct Contracting an Advanced Alternative Payment Model (APM)?Direct Contracting will be an Advanced APM starting in performance year (PY) 1 (April 1 – December 31,2021).5

10. Q: How does Direct Contracting differ from Medicare Advantage?Unlike beneficiaries who enroll in an MA plan, beneficiaries aligned to organizations participating in thepayment model options under Direct Contracting are not choosing to leave Medicare FFS. If a MedicareFFS beneficiary voluntarily aligns with a DCE, their health care coverage will not change and they retainthe freedom to seek care from their Medicare provider or supplier of choice, unlike enrolling in an MAplan with a network. However, DCEs are like MA plans in that they are risk-bearing entities managing thecare of a panel of patients.11. Q: How does Direct Contracting differ from the NGACO Model?Direct Contracting builds on the experience of the NGACO Model and incorporates innovative approachesfrom MA and the private sector. Direct Contracting incorporates opportunities for greater financial riskthan the NGACO Model supported by enhanced flexibilities and additional benefit enhancements. DirectContracting builds on the cash flow mechanisms of the NGACO Model by introducing capitation, requiringDCEs to receive upfront, at-risk, capitated payments and to pay their downstream providers and suppliersthat participate in such capitated payment arrangements for services, allowing the DCE to bettercoordinate care delivery. Additionally, the Direct Contracting Model has a new financial methodology thatfeatures a benchmark developed based on the MA rate-book and a new risk adjustment strategy thatmitigates coding intensity and improves the accuracy of risk adjustment for complex, high-risk patients.In order to support this new methodology, Direct Contracting also offers an enhanced voluntary alignmentmethodology relative to existing Medicare initiatives, Prospective Plus Alignment, which allows DCEs toincorporate new beneficiaries into their aligned beneficiary population on a quarterly basis. DirectContracting’s benchmarking methodology and risk-sharing and beneficiary alignment options support theparticipation of organizations new to Medicare FFS and organizations focused on the provision of care tohigh needs beneficiaries.Application Process12. Q: What is the updated model timeline? (Updated, October 2020)The first performance year of the Direct Contracting Model was scheduled to begin January 1, 2021.However, in recognition of the impact of coronavirus disease 2019, CMS is delaying the start of thePerformance Period of the Model by three months, such that the first performance year will beginApril 1, 2021. The Implementation Period will begin in October 2020 for organizations that havealready applied and are selected to begin participation during the IP. The application for participationbeginning April 1, 2021 opened on June 4, 2020 and closed on July 6, 2020. Additionally, CMS plans toopen a second application period in 2021 for organizations to enter the Direct Contracting Model onJanuary 1, 2022. Note that participation in PY6 (2026) will be available to all DCEs, regardless ofwhether they begin the performance period in April 2021 or January 2022.13. Q: If our organization already submitted an application, do we need to reapply? (Updated,October 2020) If you applied to begin participation in the IP, were accepted, and sign the IP ParticipationAgreement (PA), you do not need to reapply to continue participating in PY1 (starting April 1,6

2021).If you apply to begin participation in the IP and / or PY1 and were not accepted, you may reapplyin the next application period to start January 2022.If you applied to begin participation in the IP or PY1 and are accepted, but wish to delay your startuntil January 2022, you do not need to reapply.14. Q: Will there be additional opportunities to apply for Direct Contracting after Performance Year 1begins in 2021?CMS intends to have an additional application period in early 2021 for those interested in beginningparticipation in the model on January 1, 2022. A previously submitted Letter of Intent (LOI) is notrequired to apply for this application period.15. Q: How does an organization apply to participate in the model? (Revised, October 2020)The application portal is currently closed. We will release information about applying to start in PY2/2022in the future.16. Q: Is a letter of intent (LOI) required to apply to Direct Contracting? (Updated, October 2020)While an LOI was required for the PY1 application, an LOI will not be required to access the PY2application portal (i.e., to apply to begin the model in 2022).17. Q: If I have technical questions about the application tool, to whom should I send them?Technical questions regarding the application should be sent to CMMIForceSupport@cms.hhs.gov. Wewill attempt to address all inquiries within three business days; however, some questions may take longerto answer.18. Q: How will CMS select participants for the model?CMS will assess applications in accordance with specific criteria in five key domains: (1) organizationalstructure; (2) leadership and management; (3) financial plan and risk-sharing experience; (4) patientcenteredness and beneficiary engagement; and (5) clinical care. These domains and associated pointscores are detailed in Appendix D of the RFA. In addition, CMS will consider whether applicants havedemonstrated that their organizational structure promotes the goals of the model by including a diverseset of providers and suppliers who demonstrate a commitment to high quality care. Lastly, applicants withprior participation in a CMS program, demonstration, or model will be asked to demonstrate routinecompliance with the terms of such CMS programs, demonstrations, or models.19. Q: If an applicant is accepted to participate as a DCE during the Implementation Period for theProfessional or Global Option, can it also apply for the Geographic Option?The Geographic Option is still under development and the application for it will not be available duringthe Implementation Period for the Professional and Global Options.7

20. Q: When are the DCE’s arrangements with DC Participant Providers and Preferred Providers due toCMS and how are they submitted?A sample arrangement between the DCE and the DC Participant Providers and Preferred Providers mustbe submitted with the application as well as a DC Participant Provider and Preferred Providernotification attestation signed by the DCE.21. Q: How does the DC Participant Provider and Preferred Provider list submission process work? (Newquestion, October 2020)Applicant DCEs that were awarded to participate beginning in the Implementation Period had anopportunity to update their DC Participant Provider List and Preferred Provider List for the IP provi

Q: Is Direct Contracting an Advanced Alternative Payment Model (APM)? Direct Contracting will be an Advanced APM starting in performance year (PY) 1 (April 1 –December 31, 2021). 5 . 10. Q: How does Direct Contracting differ from Medicare Advantage?

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