DCEs, GET THE MOST OUT OF YOUR COMMITMENT TO RISK
In 2019, the Centers for Medicare & Medicaid Services (CMS) Innovation Center innovated once again in the form of Direct Contracting—modeled after a hybrid of Medicare Advantage and Next Gen ACOs (sunsetting December 2021) with monthly prospective capitated payments to providers and shared savings and losses.
This model marks the closest move yet to CMS’ vision of the healthcare system transforming to value-based care. But unlike other value-based programs, these model participants (Direct Contracting Entities or DCEs) are challenged by taking on fully capitated risk. It’s no small task.
CMS has set a high bar for DCEs that include significant challenges:
- The expectation that DCEs grow and scale quickly
- Operational burden of being a healthcare entity and securing providers
- Coordinating care across multiple partners and communication breakdowns
- Totally transforming how patient care is addressed
Nonetheless, 53 DCEs have been accepted into the program because value-based models work as shown by the success of Accountable Care Organizations (ACOs). According to the National Association of Accountable Care Organizations (NAACOS), “Total-cost-of-care models, including ACOs, remain the best way to achieve the Innovation Center’s goals. Data from the Medicare Payment Advisory Commission, researchers at Harvard University, and the analytics firm Dobson DaVanzo and Associates show that ACOs are lowering Medicare spending annually by 1-2%. Knowing Medicare Parts A and B expenditures reached $636 billion in 2018, a 2% reduction in spending would save nearly $200 billion when compounded over a decade, assuming Medicare spending grows at 4.5% per year without ACOs.”
In another twist, CMS announced this year that rather than opening a second application period, DCEs accepted to start in 2021 may defer their participation to 2022.
“There is a scramble happening among DCEs now to figure out how they’re going to manage all of the risk and the care coordination needs of their patients,” says Brian Fuller, Integrated Care Solutions (ICS) CEO. ICS works directly with DCEs in a risk-sharing model to improve care coordination and reduce costs.
The challenge for DCEs boils down to managing overall spend across the care continuum. If overall spend goes down, the DCE benefits financially when total spend is reconciled. Depending on the contractual agreements, providers could also benefit. If spend goes up, the DCE will have to pay back money to Medicare.
Easier said than done. Below, Fuller, a nationally recognized thought leader in care coordination and management, offers three ways DCEs can maximize their commitment to risk and reduce overall spend by handing off care coordination.
Fuller explains some of the challenges DCEs face: “Unlike our hospital and physician partners in bundles or in an ACO, we have found that many DCEs are not operational entities. They’re payers, they’re intermediaries in some way or another. So just the operational burden of creating a boots-on-the-ground, in-market team is not something that fits naturally in their organization, which can be costly. There is an operational burden that can be supported through a care coordination partner.
“DCEs are expected to grow, and there’s a voluntary, market-driven, and alignment effect this year as they are trying to scale everything,” Fuller continues. “Outsourced care coordination doesn’t carry the debt, the salary, and benefits load of a health system. I’ve had this discussion with one of our clients who said, ‘We can’t afford to do what you guys do on our salary grid and our benefits load. It would cost us one and a half times what it costs you because we’re boxed into our HR structure. And you’re not.’”
Build a Valuable Network
The Direct Contracting model relies heavily on building a network of trusted, quality- and outcome-driven partners to support the delivery of patient-focused and affordable care. Weak links in the network directly impact the level of success DCEs will be able to achieve.
Fuller explains: “DCEs operate by many health plans and have to build their network, select their network, contract with their network, and they can only change the contract annually. They can designate who they work with monthly, but they can only change a contract annually. Therefore, they must understand who the good players are out there. ICS has deep expertise in selecting, working alongside and constantly re-evaluating a network. Our feedback loop is paramount regarding how our care coordinators assess high-quality providers, both quantitatively and qualitatively by working closely alongside them.”
Prioritize the Patient
“Communicating with patients needs to be considered a critical component of care—from wellness to supporting caregivers, to prioritizing mental health, to speaking early and often with patients with serious illness so they can accept the care that meets their goals, understanding risks and benefits,” Fuller says. “ICS prioritizes this as the quarterback for patient care. We have found that putting the patient first through strong communication leads to improved patient experiences and reduced readmissions.”
Transforming care is hard enough. Doing it by taking on all of the risk is even harder. Handing off care coordination to a partner like ICS can be a game-changer. We remove the burden of care coordination by sharing the risk of delivering the best care at the right time and right cost to your patient populations. Through a high-tech, high-touch approach, DCEs can rely on us to be your way to operationalize affordably, provide a valuable network, and offer peace of mind that patients are taken care of throughout the care continuum.
ICS helps organizations through their transformation from fee-for-service to-value-based care and delivers ongoing care coordination, consulting, and expertise in data-driven processes necessary to achieve quality care and financial success. If you are an ACO in need of a partner with expertise in value-based care and proven results working with risk-bearing organizations, contact ICS today for a free consultation.