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CMS Announces 'Geo' Model for Regional Value-Based Care

Analysis  |  By John Commins  
   December 04, 2020

The voluntary Geographic Direct Contracting Model will create regional integrated relationships with providers and community organizations to address the needs of Medicare beneficiaries.

Medicare on Thursday announced the launch of a voluntary payment model that will test whether regional, value-based care can improve quality and cut costs across geographic areas.

The Geographic Direct Contracting Model, also known as the "Model" or "Geo", will allow "direct contracting entities" to collaborate with providers and community organizations in a region to better coordinate care and address the social needs of Original Medicare beneficiaries in that region, the Centers for Medicare & Medicaid Services said.

"The need to strengthen the Medicare program by moving to a system that aligns financial incentives to pay for keeping people health has long been a priority," CMS Administrator Seema Verma said.

"This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality, and lower the cost of care for Medicare beneficiaries in a community," she said.

Under the six-year initiative, which will begin January 1, 2022, DCEs will own the total cost of care for Medicare fee-for-service beneficiaries in their region. Each DCE will cover a minimum of 30,000 beneficiaries, with no maximum number.

Geo requires participants to take full risk with 100% shared savings / shared losses for Medicare Parts A and B services for aligned Medicare FFS beneficiaries in a defined target region.

The DCEs – which may include accountable care organizations, health systems, healthcare provider groups, and health plans – will work under two voluntary capitation payment schemes: total or partial capitation.

Under the total capitation model, DCEs will opt into reducing Geo Preferred Providers' fee-for-service billing paid by Medicare Administrative Contractors by 100%. In exchange, DCEs will get a monthly capitated payment equal to the projected reduction in FFS billings and be responsible for all downstream payments to Geo providers, who will submit no-pay claims to MACs.

Under partial capitation, Geo providers' FFS billing will be reduced by MACs by between 1% and 50%. In exchange, DCEs will get a monthly capitated payment equal to the projected reduction in FFS payments. DCEs will have the option of making additional downstream payments to providers.

The Geo model financial methodology is based on a DCE's performance against a region's Performance Year Benchmark. The model also includes risk corridors, risk adjustment and quality adjustments and a region's Performance Year Benchmarks will be set using a Geographic Rate Book.

The initiative will be tested over six-years in four to 10 regions, and will include two three-year performance periods, starting on January 1, 2022, and January 1, 2025.

CMS has identified 15 metropolitan regions, including Los Angeles, Detroit, Atlanta, and Miami, each of which contains between 150,000 to 700,00 beneficiaries.

Interested organizations should submit a non-binding letter of interest to CMS by 11:59 pm PT, December 21, 2020 through this link: Geographic Direct Contracting Model Letter of Interest.

“This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality, and lower the cost of care for Medicare beneficiaries in a community.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Geo requires participants to take full risk with 100% shared savings / shared losses for Medicare Parts A and B services for aligned Medicare FFS beneficiaries in a defined target region.

The DCEs – which may include ACOs, health systems, provider groups, and health plans – will work under two voluntary capitation payment schemes: total or partial capitation.

Within each region, experienced risk-sharing and population health management organizations will partner with healthcare providers and community organizations to coordinate care.

The initiative will be tested over six-years in four to 10 regions, and will include two three-year performance periods, starting on January 1, 2022, and January 1, 2025.


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