CMS doubles down on value-based care

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The government takes additional comprehensive measures to ensure COVID-19 doesn’t disrupt the transition from volume to value.

If there were ever any doubts about the seriousness of CMS’ commitment to transitioning the nation’s healthcare system from one based on volume-based to value-based compensation models, those doubts were squashed by a recent CMS blog post and bulletin, announcing the implementation of very significant temporary “flexibilities and adjustments” to various valued-based care (VBC) programs in an effort to ensure that providers participating in those programs are able to weather the chaos of the current pandemic.

In the blog post, CMS Administrator Seema Verma wrote that the “need” for a comprehensive value-based transformation of the country’s healthcare system “is even greater as our country confronts not just the coronavirus but the possibility of future pandemics.”

To meet this need, CMS will be making some of the following adjustments to its preexisting VBC programs:

Medicare ACO Track 1+ Model: CMS will remove episodes of care for treatment of COVID-19, in addition to having applied the Extreme and Uncontrollable Circumstances policy to 2020 financial reconciliation. Additionally, ACOs on this track will have the option to extend their agreements for year 1 through December 2021.


Next Generation ACO Model: CMS will work to reduce 2020 downside risk by reducing shared loss by proportion of months during the COVID-19 public health emergency. To the same end, it will be removing episodes of care for treatment of COVID-19, and use a retrospective regional trend, rather than prospective, for 2020. Additionally, it will be removing the 2020 financial guarantee requirement. On the other hand, however, it will be capping NGACOs’ gross savings upside potential at 5% gross savings.

BPCI Advanced Program: Participants will have the option to eliminate upside and downside risk by excluding Clinical Episodes from Reconciliation for Model Year 3 (2020). For those participants choosing to remain in two-sided risk, they may exclude certain Clinical Episodes from Reconciliation with a COVID-19 diagnosis during the episode.

Comprehensive Care for Joint Replacement (CJR) Model: CMS will remove or mitigate downside risk by capping actual episode payments at the target price for episodes with a date of admission to the anchor hospitalization between January 31, 2020 through the termination of the current public health emergency. It further extends the appeals timeline for Performance Years 3, 4 and 5 from 45 to 120 days, in addition to extending Performance Year 5 through March 2021.

Direct Contracting (Global and Professional): This new payment model, which was set to be launched this year, has been adjusted so that the first Performance Period for cohort 1 is now to begin on April 1, 2021, and so that the application cycle for cohort 2 is to begin on January 1, 2022.

Daniel B. Frier, Esq., is founding partner and Jason N. Silberberg, Esq., is an associate with Frier Levitt.