Total capitation of care is exactly what it looks like: CMS will take the estimated expenses, divide it by 12 and distribute it each month, with funds set aside for patient care. Capitation was not well represented in traditional COA models. This makes direct contracts in practice more similar to Medicare Advantage. « The reason for the protests is that people learn the rules and the ones that make sense, » Fernandopulle said. « In value-based care, there are certain rules – what you can and cannot do with technology, etc. They have the power, within the program, to grant waivers so that people like us can break some of those rules and prove that they were stupid from the beginning, and maybe change them for people. According to a recent survey by the Business Group on Health, nearly a quarter (24%) of all healthcare employers are considering a direct contract with integrated delivery systems. In this article, we will explore how direct contracting works for employers, implementation best practices, and future forecasts of the trend. Employers and other health care providers regularly look for ways to make their health services more efficient and affordable, and are increasingly pushing to improve the quality of care for their covered populations. Many buyers are working with their traditional partners, such as health plans or APTs, to drive these changes. However, some buyers find that their traditional partners do not meet their needs. For example, while healthcare plans with standardized products and supplier contracts create efficiency, self-funded buyers often want to adapt the product and supplier network.

The willingness of health care plans to meet the specific needs of a buyer varies; Direct commissioning with suppliers is an alternative strategy. Buyers and sellers can design a model that meets their common needs. Direct outsourcing has the potential to give a buyer more control over prices, which providers are involved, and a better understanding of the quality of care. Companies of all sizes can benefit from a direct contractual agreement as it opens up a direct discussion about costs and quality that are traditionally unavailable. As a result, companies can achieve significant savings through successful direct contracts. Direct contracting establishes an individual relationship between a health care system and a self-insured employer. These employers assume the financial risk and responsibility of paying their employees` medical claims. As a rule, they entrust third parties with the registration, the handling of complaints and the establishment of the network of suppliers. Basically, direct outsourcing is a population-based model that allows the use of capitation. That`s what sets it apart: Aside from Next Gen and Pioneer, virtually every other compensation-based model from the Centers for Medicare and Medicaid Services is billed as paid, with a vote 18 months later. Basically, he said, direct sourcing relies on the population health models that CMS has been publishing for just over a decade. They have been explicit about developing programs that target, in part, advanced care groups focused on seniors who have recently taken centre stage and have not participated in the original Medicare because of the gap between the reimbursement model and the clinical model.

After talking to organizations that use an existing TIN, they plan to enter the performance period with the entire TIN or plan to form a new TIN, depending on their progress during the implementation period. For their providers with high leaks and a high total cost of care, they are particularly focused on improving these two measures to be included in the new TIN. Unfortunately, there is no one-size-fits-all approach, but each of the above options has its pros and cons and it is up to the DCE to determine which approach is best for them. CMS believes that ELDs who have control of funds with their downstream providers will allow them to improve the coordination and delivery of care and better manage the health needs of their coordinated beneficiary population, resulting in reduced costs and better outcomes. Therefore, the proposed payment mechanism will be paid directly to the ELD on a monthly basis. The hope is that DCE will invest in technology, increase the resources needed for value-based care (VBC) and compensate providers through payment agreements. As part of the payment mechanisms, ELDs may also select advance payments in addition to capitation payment mechanisms. ELDs have the option to select Primary or Total Care Capitation. The Primary Care Capitation (PCC) option is available for global and occupational risk agreements and is a capitation model for defined primary care services. The Total Care Capitation (TCC) option is only available for the Global Risk Arrangement and is a capitation model for the total cost of care. ELDs receive a monthly capitation payment from CMS instead of FFS requests from their providers, which encourages providers to keep the overall cost of care low.

More information can be found here.3 For more information, please contact your CareJourney representative. When the concept of a direct contract was first announced by the Centers for Medicare and Medicaid Innovation, Humana was intrigued by the prospect of expanding its services to so many other seniors. The organization submitted an application along with specifications on the results of its clinical model, its technological capabilities, and its financial capacity to take responsibility for the cost and quality results. After a back-and-forth with CMMI, Humana was added to the program in 2020. Dr. Rushika Fernandopulle, president of APG for Direct Contracting, described it as a kind of latent alternative payment model emerging from CMS. This pays off for health systems and employers in large part because of « conservation, » which is the system`s ability to keep all or most of a population`s health care on its supply network, rather than losing visits to competing providers. If the healthcare system can be confident that the volume of patients is dedicated – and that it will manage the entire healthcare journey for these patients exclusively with its own providers – it can offer significant discounts on fee rates. A significant individual loss risk is usually mediated by stop-loss insurance, but the employer pays the health care system directly for medical claims.

While direct outsourcing is a viable solution for most businesses, it`s important to have the right partners on hand. Contracts must make financial sense for all parties and companies must be willing to coordinate all moving parts. « You see that CMS continues to offer flexibility to the risk-taking company, whether it`s the MA plan or the vendor group, to improve the experience. to get better results, » Eirich said. « As part of the direct contract program, CMS enables suppliers to effectively fund specific cost-sharing programs or performance improvements to achieve better results. » The global and professional payment model options are two of the available ELD model frameworks that have begun the direct implementation phase of the contract and whose first performance period begins in April 2021. The second round of applications is currently underway until the end of March 2021 and will enter into force in January 2022. .