Payers, Hospitals, Legal

CMS’ new Geo care delivery model: 5 things to know

The new Geographic Direct Contracting Model aims to improve quality of care and slash costs for Medicare beneficiaries across an entire region. It involves setting up risk-sharing arrangements where participants will be responsible for the total cost of care for beneficiaries in the region.

The Centers for Medicare & Medicaid Services has introduced a new voluntary payment and care delivery model that will test a regional approach to value-based care for Medicare beneficiaries.

The model

Dubbed the Geographic Direct Contracting Model, also known as Geo, the model will enlist direct contracting entities to implement care delivery and value-based payment systems with healthcare providers in specific regions.

These direct contracting entities — which can include accountable care organizations, health systems, provider groups and health plans — will be responsible for the total cost of care for Medicare fee-for-service beneficiaries in their region. Participants will be required to take on full risk with 100% shared savings/shared losses for Medicare Parts A and B services.

Providers that choose not to enter into value-based payment arrangements with a direct contracting entity will continue to be reimbursed at full Medicare fee-for-service rates.

The aim

The model, developed by the CMS Innovation Center, aims to improve care quality and lower costs for Medicare beneficiaries across an entire region.

“The need to strengthen the Medicare program by moving to a system that aligns financial incentives to pay for keeping people healthy has long been a priority,” CMS Administrator Seema Verma said in a press release. “This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality, and lower the cost of care for Medicare beneficiaries in a community.”

The participants

Participants in the model must be covered under the Health Insurance and Portability Accountability Act, which include most types of provider organizations, ACOs and health plans. Participants will be selected through a two-step process — the first will assess applicants’ capacity to carry out the requirements of the model and the second will assess applicants’ proposed discounts. Applicants will propose a discount, expressed as a percentage of the region’s performance year benchmark, for each of the years of the performance period.

CMS expects there to be a minimum of three direct contracting entities per region, and a maximum of up to seven per region, depending on the number of Medicare fee-for-service beneficiaries in the region.

The beneficiaries

Beneficiaries will maintain all their original Medicare benefits and rights, but may receive enhanced benefits, such as additional telehealth services, and may have lower out-of-pocket costs for certain services if included in the model.

To be included in the model, beneficiaries must meet certain criteria, including being enrolled in both Medicare Part A and Part B and having an address in a region included in the model.

Each direct contracting entity will be aligned to 30,000 beneficiaries. There are many different ways in which the entities and beneficiaries can be aligned. These include voluntary alignment, where beneficiaries are able to choose the entity, and Medicaid managed care organization alignment, where beneficiaries who are enrolled in Medicare fee-for-service and in a Medicaid managed care organization operated by a direct contracting entity are aligned to that entity.

Key dates

The model will be tested over a six-year period in four to 10 regions. It will include two three-year performance periods — the first beginning Jan. 1, 2022, and the second starting Jan. 1, 2025.

Organizations that are interested in participating should submit a letter of interest to CMS by Dec. 21. The letters will be used to determine the final regions for the model.

The request for applications will be made available in January 2021, and applications will be due by April 2, 2021. Participants will be selected by June 30, 2021.

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