CMS on Monday announced that health care providers next month will be able to start applying for the direct contracting (DC) path under the agency's new Primary Care First (PCF) alternative payment model.

New: How health plan CMOs can convince providers to move towards downside risk

Background: HHS unveils new value-based payment models

CMS in April announced an initiative intended to shift primary care providers and other eligible professionals from fee-for-service (FFS) payments to value-based payments using five new voluntary payment models. The new payment models are designed to examine whether performance-based payments paired with providers taking on financial risk will reduce health care costs and maintain or improve health outcomes and quality of care.

CMS in a fact sheet said the five payment models are divided into a DC path and a PCF path.

The DC path includes three payment models:

• DC–Professional, which is designed for providers to share 50% of the financial risk with CMS and will offer providers "a capitated, risk-adjusted monthly payment for enhanced primary care services";
• DC–Global, which is designed for providers to assume 100% of financial risk and will offer providers two payment options, including a "risk-adjusted monthly payment for all services provided;" and
• DC–Geographic, which is designed for providers to assume 100% of financial risk and offer providers a similar payment structure as that offered under the DC–Professional Model.

The PCF path is specifically designed for primary care practices and includes two voluntary, five-year payment models, called PCF-General and PCF-High Need Populations. CMS in April said it planned to begin accepting applications to participate in the PCF payment models in spring 2019, and planned to launch the payment models in 26 regions throughout the United States beginning in 2020. However, CMS last month announced that it was delaying its launch of the PCF payment models until at least 2021.

CMS to start accepting applications for DC path

But CMS on Monday announced that, early next month, the agency will open the first application period for eligible entities interested in participating in the DC path's professional and global payment models.

CMS in April said it planned to launch the DC–Global and DC–Professional payment models in January 2020, with performance years beginning January 2021. On Monday, CMS said eligible entities—including critical access hospitals, hospitals that employ clinicians, and rural health clinics—will have until Dec. 10 to submit a non-binding letter of intent to apply for the initial implementation period.

CMS on Monday also issued a request for applications seeking applications from eligible entities interested in participating in the DC–Global or DC–Professional payment models for the initial implementation period. CMS said it would begin accepting such applications early next month, and the application period will close on Feb. 24, 2020.

In addition, the agency said it will open an application period in the spring of 2020 for entities interested in participating in the payment models starting with the first performance year, which will begin January 2021.

Reaction

Some industry stakeholders have expressed support for the DC path and welcomed the upcoming application period, Modern Healthcare's "Transformation Hub" reports.

Don Crane, president and CEO of America's Physicians Group, said, "This is yet another step by the [Center for Medicare and Medicaid Innovation] in affirming its commitment to ensuring that patients have access to the high-quality, accountable, and coordinated care physician groups have been providing for decades."

Clif Gaus, president and CEO of the National Association of ACOs (NAACOS), said the DC model "is really an [accountable care organization (ACO)] by another name." He added, "Given the robust attention ACOs and the broader health community have given Direct Contracting, NAACOS looks forward to better understanding important details of the program released today" (Finnegan, FierceHealthcare, 11/26; Brady, "Transformation Hub," Modern Healthcare, 11/25; Porter, HealthLeaders Media, 11/26; AHA News, 11/26).