CMS Mulls Direct-Provider-Contracting Model Test Program

Kerry Dooley Young

May 02, 2018

Federal officials are seeking feedback on whether to test a new approach to payment for medical care that might more tightly connect patients to participating healthcare professionals.

The Centers for Medicare and Medicaid Services (CMS) has in recent years launched a number of payment models, such as accountable care organizations, intended to reward physicians for more coordinated care of their patients. CMS said it is now mulling whether to test a direct-provider-contracting (DPC) approach with an aim of making participating practices "the main source of care for services ranging from solely primary care to a wide range of professional services for beneficiaries that voluntarily elect to enroll with the practice."

CMS is seeking feedback on whether to test the DPC approach in traditional fee-for-service Medicare and insurer-run Medicare plans. CMS is seeking feedback through May 25 on a request for information (RFI) released on DPC.

In the nine-page RFI, released April 23, CMS also notes that there are "a wide range of payment arrangements" that already involve aspects of DPC, including examples in the private sector where "patients contract directly with physicians and group practices." While CMS doesn't further elaborate here on this indirect reference to direct billing, it may well draw strong and opposing reactions from consumer and physician groups.

Many Questions

The agency, on the other hand, provides a rather extensive list of questions about other aspects of a potential DPC model. This approach might include fixed per beneficiary per month (PBPM) payments to cover services a practice would be expected to provide. CMS is seeking specific feedback on how a DPC model could fit within the traditional Medicare fee-for-service program, where patients have "freedom of choice" to pick physicians.

"Given this, should there be limits under a DPC model on when a beneficiary can enroll or disenroll with a practice for the purposes of the model (while still retaining freedom of choice of provider or supplier even while enrolled in the DPC practice), or how frequently beneficiaries can change practices for the purposes of adjusting PBPM payments under the DPC model?" CMS asked. "If the practice is accountable for all or a portion of the total cost of care for a beneficiary, should there be a minimum enrollment period for a beneficiary? Under what circumstances, if any, should a provider or supplier be able to refuse to enroll or choose to disenroll a beneficiary?"

CMS is also seeking feedback on whether people who have chosen to enroll in a practice under a DPC model should be required to enter into an agreement with it. It also wants comments about whether practices should be allowed to use "beneficiary engagement incentives" such as "nominal cash incentives" and gift cards, according to the RFI.

The goal of the DPC model would be in part to reduce spending while also easing the administrative burdens of billing on medical practices, CMS said. This approach is also intended to provide a "revenue stream that would aim to give providers and suppliers more flexibility in how and where they care for their patients," the agency said.

The DPC RFI builds from CMS's request last year for suggestions on how to use its Innovation Center to test alternative ideas for payment. CMS said it received more than 1000 responses to the 2017 RFI regarding the Innovation Center.

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