CMS’s Direct Contracting Model

Compliance Requirements for Direct Contracting Entities
Author: Lorraine Ludwigsen, CP, CPC, CPCO, CHCC, CHCO, Vice President, Operations & Compliance

Dec 7, 2021 | CMS-OIG

In 2019, CMS began to request applications for its innovative Direct Contracting Model. This year was the beginning of the 5-year demonstration period. The compensation approach for Direct Contracting Entities (DCE) is intended to align positive outcomes with greater compensation from CMS. Building on lessons learned from previous initiatives like ACOs and experiences with private payers, Direct Contracting is expected to reduce administrative burdens. The new model will also empower primary care providers to spend more time caring for patients while reducing overall health care costs. Another focus is to remove barriers while delivering care for complex, chronically, and seriously ill populations The ideal result of the DCE is a win-win-win scenario with better, more predictable compensation for providers, lower overall costs for CMS, and improved outcomes for healthcare consumers.

CMS believes that “experience with innovative models, programs and demonstrations to date has shown that when incentives for primary care clinicians are aligned to reward the provision of high-value care, the quality and cost effectiveness of patient care improves.”

The new model will conditionally waive select CMS payment requirements which arises from part of the reduced administrative burden. These initial waivers will apply to telehealth expansion, care management home visits, and post-discharge home visits. Current requirements that will be abandoned include supervision and originating sites provided patients meet specific criteria.

Participating DCEs will have to develop and adhere to a compliance plan with at least the following attributes:

  • designated compliance officer with a minimum of 2 years compliance experience, who is not legal counsel to the DCE and who reports directly to the DCE’s governing body.
  • mechanisms for identifying and addressing compliance problems related to the DCE’s operations and performance.
  • compliance training programs that the DCE and its DC Participant Providers and Preferred Providers must complete periodically, including within their first 90 days in the model.
  • a method for employees or contractors of the DCE, DC Participant Providers, Preferred Providers, and other individuals or entities performing functions or services related to DCE activities to anonymously report suspected problems related to the DCE to the compliance officer.
  • a requirement for the DCE to report probable violations of law immediately to an appropriate law enforcement agency.
  • the DCE’s compliance plan must be updated, as necessary, to reflect changes in laws and regulations.

HCN recognizes these new regulatory standards may be difficult for healthcare organizations to navigate. We have broadened our services to include offering compliance services for the DCE model. Services are available ad hoc, to meet specific shortfalls, or as a complete bundle to ensure your organization is compliant. We are excited to help our clients take full advantage of the DCE opportunity.