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Medicare, Direct Contracting & You



Interested providers must sign a Letter of Intent with Pearl Health by September 3, 2021 in order to participate with them in Medicare's Direct Contracting program for 2022.

To learn more, or request a participation agreement, reach out to the Pearl team: 

Email: join@pearlhealth.com
Phone: 833-655-0997

How a New Medicare Program Opens the Door to DPCs

One of the biggest decisions for providers entering into a DPC model is how to handle their relationship with Medicare. PCPs have spent years caring for patients as they’ve aged, and opting out of Medicare can risk their opportunity to care for some of their complicated seniors when they need attention the most. Fortunately for physicians practicing in the direct primary care (DPC) model, as CMS policy has evolved, we’ve seen Medicare pull towards many of the same tenets for patient care that the DPC community knows to be true, including “value over volume”. The result is a new Medicare program that will sound pretty familiar to anyone who’s been around direct primary care.

“Direct Contracting” is a new Medicare program aimed at enabling providers to improve the healthcare outcomes of patients enrolled in traditional Medicare. It allows for the forming of “Direct Contracting Entities” (DCEs), which contract directly with Medicare in the way a health plan does. Providers who participate receive stable monthly payments, reduced administrative burdens, and additional benefits for their patients—all while allowing providers to share in the rewards of delivering better care outcomes for their patients.

For hybrid DPC clinics and concierge practices that are already participating in Medicare, this means moving your Medicare patients into a capitated payment model. For practices that are 100% DPC, this means opening your doors to Medicare patients but in a more DPC-friendly way than has ever been allowed by CMS.

Watch the Webinar

To help providers understand the pros and cons of this opportunity, we invited the folks at Pearl Health, who believe—as we do—that healthcare compensation is fundamentally misaligned with healthcare outcomes, to share some insights with direct primary care clinicians who might be interested in participating in Medicare’s new Direct Contracting program.


To learn more, or request a participation agreement, reach out to the Pearl team at: 

Email: join@pearlhealth.com
Phone: 833-655-0997


6 ways Medicare is using DCEs to align with partial or full membership models

1. Stable payments, distributed monthly for your aligned patients
Similar to a membership fee, providers receive monthly payments for the traditional Medicare patients under their care, whether the patient receives care or not during that month. So providers are incentivized to prioritize high quality care over volume. Payments vary regionally and tie to historic utilization of your panel.

2. An aligned incentive model
Providers earn shared savings tied to reductions in the total cost of care. This means providers directly share in the value they create for their Medicare patients, without relying on private health plans or needing to jump through hoops to participate.

3. Addition of voluntary patient alignment
Patients are able to select you as their PCP, instead of attribution based entirely on claims. This eliminates the back and forth of trying to figure out attribution through claims, and allows providers to focus on managing your whole Medicare panel.

4. Supplemental patient benefits for aligned beneficiaries
When you participate with a DCE, your patients can receive additional benefits on top of their regular Medicare coverage. This will be similar to benefits they receive from a Medicare Advantage plan – like dental vouchers, reduced cost sharing, transportation, or wellness benefits.

5. Reduced administrative workload
The quality measures for the Direct Contracting program are based on either patient experience surveys or utilization (e.g. reducing admissions). That means, quality is determined by patient outcomes–not what’s documented in a chart. When combined with no prior authorizations on an open access network, this results in a significant reduction in the administrative workload required to serve Medicare patients.

6. Localized, preferred networks - all while remaining open access
There are no referral requirements, but patients are incentivized to follow the care plans laid out by their PCPs. While DCEs create incentives for patients to go to the specialists recommended by their physicians, there are no more administrative headaches or surprise charges if they choose to go elsewhere. This reverses the pains of the HMO model that requires prior authorizations and often results in surprise charges if a patient goes out of network.


Most common questions (and answers)


Question: How would DCE work for a new solo practice? Can I recruit and enroll new patients throughout the year?

Answer: The DCE program does allow for medicare patients to select you as their primary care physician. This means there will be an opportunity for these patients to align with you to help you grow your panel throughout the year. Pearl will also work with you to ensure that every patient you're serving as a PCP is aligned to you under this model. One thing to call out here is the importance of equity. There are rules and guidelines to ensure there are no unintended consequences to voluntary alignment. CMS has strict non-discrimination policies, so it's important you make sure you are not selectively choosing who you are bringing to your practice.


Question:Is this program only open to patients who are not on a MA plan?

Answer: Correct; this program is for patients on traditional medicare, who have not opted to enroll on a Medicare Advantage (MA) plan. With that said, a provider can still see MA patients, but it will be outside of the DCE program.


Question: Once you opt back into Medicare, can you require that you accept Medicare patients only via the Pearl pathway?

Answer: No, and the core of this answer ties to the non-discrimination provisions within Medicare.  Every patient you are treating with Traditional Medicare coverage, you are eligible in aligning them to this model. Said another way, if you are serving as their primary care doctor, they can align to you either through claims or a patient voluntarily selecting you. Driving equity is very important for both Medicare and the Health Care system at-large, so we're highly conscious of ensuring there are no discriminatory practices.


Question: How does this program affect my patients? Will it impact their insurance coverage or access to care? 

Answer: Patients who become part of a DCE will retain their Traditional Medicare rights and benefits, and DCEs are required to inform them of this at the outset of the Performance Year. They can still see any providers who accept Medicare. DCEs cannot employ barriers to care or punitive measures commonly used by Medicare Advantage or commercial insurance (e.g. prior authorization or referral requirements). Depending on the DCE they join, beneficiaries will likely see benefit enhancements, including low or no copays for preferred providers, incentives for healthy behaviors, etc. 

When you join a DCE as a Participating Provider, Medicare will look at the history of your claims submissions for the last few years and determine the patients you have been providing care to and enroll them in the DCE. Your additional patients can sign a simple form choosing you as their PCP — Pearl will help with this — which will enroll them into the DCE as one of your patients at the start of the following quarter.


Question: I haven’t seen many Medicare patients in the past few years at my DPC clinic, so how would you help me figure out how I would initially fit in to this program?tt

Answer: We (Pearl Health) have the ability to run your historical data and produce a financial analysis on how your current active panel might look until the DCE model.  If you want this analysis run for you, you can reach out to Pearl directly at join@pearlhealth.com to coordinate a 1 on 1 meeting to review your data.


Question: Since zero-dollar claims need to be submitted to Medicare, how thorough do they have to be? Do they have to include all of the supplemental codes for preventive care and other quality measures? Do these claims have significant impact, i.e. do they need to be "optimized" in some way?

Answer: There is no need for optimization for these primary care codes, as the services are being paid at zero dollars. Medicare is asking for data to be submitted, because it's important to collect information to understand what touch points are happening with beneficiaries (which can support their own data analytics!). Pearl is excited about the partnership with Hint because we think the DPC community will be able to provide better care and better outcomes. If we can demonstrate great results from the DPC community to Medicare, our hope is that the results can help spur more DPC-oriented programs in the future. For some practices this participation is a meaningful first step, and if we do it well, we can start having conversations with Medicare that we haven't been able to in the past. 


Question: Is this an HMO?

Answer: No, quite the opposite! HMOs are another form of controlling costs, but they often rely on narrow networks and high degrees of utilization-management that can be frustrating for patients. The DCE program maintains Medicare’s open access and never penalizes patients for the way they access care, but rewards them for listening to their doctor.


Question: Our practice is currently seeing about 25% medicare patients, I don’t know if it is worth the back work and exposure to medicare billing again.Our patients are well aware of the amount of access to us and the continuity from the hospital, we also admit our patients which maintains that continuity. That is the benefit that they recognize which is why we have a large population in our practice. We know we are saving Medicare money. That delta in the saved amounts would be interesting information for the DPC community.

Answer: Pearl would love to follow-up and show you what that data would look like. We can use your historical data to provide an estimate on what your potential shared savings might look like. We just need to schedule some time with you. There's variability in the DPC community and we can make this specific to you in a follow-up.



Question: Are there shared savings? Do I need to take downside risk?

Answer: Providers can earn a significant amount of additional revenue through shared savings. Medicare establishes a total-cost-of-care target for Participating Providers, based on the costs associated with the historical claims for their Traditional Medicare patient panel, the disease burden of that panel, and the regional costs of services–this is called ‘the benchmark’. Providers whose costs are below their benchmark in a given performance year will receive a portion of the savings they helped generate.

Pearl offers a range of risk arrangements based on providers’ tolerance for risk exposure, including upside-only arrangements (where providers are not responsible for repaying Medicare for any losses they incur) and upside/downside arrangements (where providers receive a greater portion of the savings they generate, but must also pay a portion of losses). Pearl will work with you to determine the most appropriate risk track based on your historical performance, care model and comfort.


Question:Is the PMPM risk-adjusted for each patient?

Answer: No, the PMPM is not risk adjusted. Your PMPM is based on the historical primary services (PQEM codes) provided to your panel, which is intended to generally keep the capitation payment revenue neutral compared to what you earn in a FFS arrangement. With that said, they tend to be correlated, as higher acuity patients tend to leverage primary care services more frequently.  For any procedures that are completed in the office, those are paid separately through the FFS model, so the practice still receives that revenue.  If you'd like to know more, Pearl can provide the exact code set that the capitation aligns to


Question: Are we penalized if our Direct Contracting patients go see another primary care doc?

Answer: You are not going to be penalized, but you should make sure patients understand and confirm you are the primary care provider. Patients will still be enrolled in the program as long as they indicate you are their primary care. The provider they do see that's not you will still count in the expenditure the patient is accruing throughout the year.

About Pearl Health

Pearl’s mission is to help support independent practices on navigating shifting waters, taking the right amount of risk for their practice, all while remaining wholly independent. By combining financial and regulatory mechanisms of Direct Contracting with bespoke tools and services, they’re helping independent providers move to value.

Tags: Concierge Medicine, Legal, Hybrid DPC, Medicare

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