Dr Michael Chernew Addresses the Direct Contracting Model’s Change to ACO REACH

The Global and Professional Direct Contracting model is going to be replaced with a new accountable care organization (ACO) model, which addresses some of the pushback there had been on the direct contracting model, said Michael Chernew, PhD, Leonard D. Schaeffer Professor of Health Care Policy and director of the Healthcare Markets and Regulation Lab at Harvard Medical School; chair of the Medicare Payment Advisory Commission; and co-editor-in-chief of The American Journal of Managed Care®.

Transcript:

What are the benefits of a direct contracting model? How is it supposed to address and improve outcomes?

A direct contracting model, in my view, is really just a version of the accountable care model. And in fact, you can see when they move from direct contracting over to ACO REACH, they've renamed it an ACO model, which I think in a number of ways, is more appropriate. And the advantage of this particular model, of course, is in many ways, it's a high-powered model. There's significant symmetric risk. You could have done that in any other ACO model. You could have done it, for example, in versions of MSSP [Medicare Shared Savings Program], if you made some of these changes.

So, the direct contracting piece of it, I think, is relatively minor. There are people that believe the nature of the change in the cash flow and the opening it up to some organizations will enable entities to enter that may be able to perform better than some of the traditional ACOs, and they will like some of the cash flow rules associated with that. That may end up proving to be true, I'm not sure that it will. And of course, that same expansion of the people participating, in many ways, is what has caused some of the pushback from some quarters.