In November 2019, the Centers for Medicare and Medicaid
Services (CMS) released the request for applications (RFA) for the Direct
Contracting (DC) model’s Professional and Global options. The RFA contains a
significant amount of important information for program participants. This new
payment model gives participating provider organizations two options for
risk-sharing arrangements as well as the opportunity to receive a prospectively
determined, more predictable revenue stream. Applications for the first program
year are due to the Center for Medicare and Medicaid Innovation by May 1, 2020.
The DC payment model options are conceptually similar to the other CMS accountable care organization (ACO) options, the Medicare Shared Savings Program (MSSP), and the Next Generation ACO model. Participants take on risk and earn potential rewards based on the efficiency and quality of care for aligned beneficiaries.
This paper by Milliman’s Matt Kramer, Erica Reijula, and Sam Shellabarger compares and contrasts the financial benchmark methodology between DC and MSSP.
In January 2019, the Centers for Medicare and Medicaid
Services (CMS) released Part II of the 2020 Advance Notice and Draft Call
Letter, which contains the proposed methodological changes for the 2020
Medicare Advantage (MA) capitation rates along with Part C and Part D payment
In the letter, CMS issued a request for comments on the
potential use of risk-based arrangements for pharmacy benefits in contracts
between MA plans and contracted providers. CMS noted that risk-based
arrangements in contracting for pharmacy benefits may be another tool to drive
down the cost of Part B drugs in MA and Part D drugs for MA and Part D plans.
CMS requested information on the barriers, feasibility, benefits, and drawbacks
for these types of arrangements between MA plans and contracted providers.
As part of its August 2018 proposed rule, CMS asked how
accountable care organizations and Part D sponsors in the Medicare Shared
Savings Program “could structure the financial terms of these arrangements to
reward Part D sponsors’ contributions towards achieving program goals.” There was
also a request for information in that rule regarding “barriers to developing
In this article, Milliman’s Matt Kramer, Simon Moody, and Michael Hunter provide a summary of the key issues providers need to consider before taking on Part D risk, an increasingly common ask from MA organizations, and highlight some of the complexities and common barriers observed when advising provider clients on their strategies for Part D risk.
The Medicare Shared Savings Program (MSSP) final rule includes changes to the financial benchmark methodology that measures the gross savings or losses of an accountable care organization (ACO) under the MSSP. Four key elements of the financial benchmark methodology changed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend.
In this paper, Milliman’s Jill Herbold, Cory Gusland, Charlie Mills, and Matt Kramer discuss these changes and important implications for Medicare ACOs. Each of these changes in the MSSP’s financial benchmark methodology will have significant implications for most ACOs. Given the increase in the agreement period length from three to five years, it is critical that ACOs assess how the final rule will affect their financial benchmarks and related strategies.