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CMS Announces New Direct Contracting Model

The Centers for Medicare and Medicaid Services (CMS) has announced the Direct Contracting Model Professional and Global Options, which will allow Medicaid managed care organizations (MCOs) serving duals to test financial risk-sharing arrangements to reduce Medicare expenditures while promoting quality of care for beneficiaries. The new direct-contracting entities (DCEs) must be either a Medicaid MCO or the corporate affiliate of a Medicaid MCO. The Direct Contracting Model will test whether holding Medicaid MCOs or their corporate affiliates accountable for health outcomes and Medicare fee-for-service (FFS) costs for full-benefit dually eligible enrollees will lead to improved strategies for managing the care of this high-risk population. This model may be of interest to partially capitated Managed Long Term Care (MLTC) plans, their affiliates, and network providers.

Currently, any savings generated by MLTCs through reduced hospitalizations or other acute care utilization accrues to Medicare, but not to the MLTCs. This model is intended to align incentives to encourage MLTCs and their affiliates to partner with health care providers and implement care coordination programs that can improve quality and reduce Medicare FFS spending. More information is available here.

In early 2021, CMS will release a Request for Applications (RFA). MCO-based DCEs will begin participating in the model in January 2022.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8838