On March 1, the Center for Medicare and Medicaid Services (CMS) announced its Geographic Direct Contracting Model is “currently under review” until further notice. While CMS has yet to provide a reason for the pause, criticism from industry stakeholders and the new Center for Medicare and Medicaid Innovation (CMM) Director may explain the pause.
Announced in December 2020, the Geographic Direct Contracting Model, or the “Geo Model,” envisions using direct contracting entities (DCEs) to build integrated relationships with health care providers and coordinate care for Medicare beneficiaries in designated geographic regions. The model, which had been under development for two years, builds on lessons learned from the Next Generation ACO model, Medicare Advantage, and other initiatives.
However, the Geo Model is the only CMMI model that has been paused by the new Administration so far. In the absence of an official justification from CMS, one of the reasons why the model may have been put on hold was criticism from health care stakeholders. In a December 2020 letter to then-CMMI Director Brad Smith, the National Association of ACOs warned the model could generate confusion among beneficiaries over who is compelled to participate. Additionally, the Center for Medicare Advocacy urged the then-Biden Transition Team in a December 2020 letter to halt the Geo Model due to uncertainty over how the model would work with other forms of insurance such as Medigap.
The move to suspend the Geo Model is not entirely without precedent. The Biden Administration paused or withdrew numerous actions by the previous Administration since assuming power, which is typical for new presidential administrations. For instance, CMS has withdrawn proposed rules on oversight for accrediting organizations, revisions to dialysis coverage requirements, and changes to Medicare Part A enrollment requirements since January 20.
It should be noted that not all stakeholders oppose the Geo Model. In a March 4 letter, America’s Physician Groups urged CMMI to restart the model as soon as possible due to “extensive financial investments” participating providers have already made in preparation for the model’s launch, as well as a genuine belief that the model represents a meaningful shift away from the fee-for-service model.
In addition to external criticism, pressure to put the Geo Model on hold may have come from within CMMI itself. Recently, the Biden Administration tapped Liz Fowler to serve as CMMI Director. Prior to her new leadership role at CMS, Fowler served as Executive Vice President for Programs at the Commonwealth Fund, where she co-authored a December 2020 blog post about the Geo Model. While the blog post largely served as an explainer for the model, it raised several questions, including how CMS would be able to produce savings CMS had projected and whether CMS is adequately tracking beneficiaries’ use of services under the model.
Thus, pressures from both inside and outside CMS have likely led to the Administration’s decision to suspend the model for the time being. That said, while not knowing yet where CMMI may take the geographic-based care and payment model, it certainly seems possible that the Administration could choose to pause other CMMI models in the future.