Home Health Providers Likely to Play ‘Very Important Role’ in Direct Contracting

Direct contracting is quickly becoming one of the most prominent examples of the overall shift to value-based care. And home health providers will likely play a critical role in the payment model’s success.

Although the Center for Medicare & Medicaid Innovation (CMMI) paused certain direct-contracting options when the new administration took over, it remains an area that forward-thinking home-based care companies are pursuing.

“Home health care has a tremendous track record of being effective and efficient,” Michael Barret, the VP of direct contracting for Collaborative Health Systems, told Home Health Care News. “Every system can’t afford to put clinicians moving through the community at the scale that needs to happen. I think home health has a unique asset base.”


Tampa, Florida-based Collaborative Health Systems is a population health management services organization. It works with providers — specifically primary care providers — on switching to value-based models.

The company currently operates in 14 states and the District of Columbia.

“[Home health agencies] have the logistics expertise in moving clinicians through the community in a timely way, collecting key information and feeding it back to the care team in appropriate fashion,” Barret continued. “And [direct contracting] is a tremendous opportunity for the home health industry to play a very important role as the evolution of this new care design model comes to us.”


That’s under the assumption that the Biden administration will move forward with direct contracting. The Centers for Medicare & Medicaid Services (CMS) blocked the Global and Professional Direct Contracting Model to new applicants in order to review it further earlier this year.

After all, CMS recently announced that another alternative payment model — the Next Generation ACO Model — would conclude at the end of the year. The model was originally launched in 2016.

Broadly, the Next Generation ACO Model was one of the more advanced value-based arrangements that CMS had tried its hand at, with risk-bearing entities taking between 80% and 100% of upside and downside risk.

In the end, though, the model did not achieve what CMS had hoped it would, whether from a cost-savings or patient-satisfaction perspective.

Direct contracting — despite hiccups — appears to be the future, as organizations formerly participating in the Next Generation ACO Model have now been offered the opportunity to enter themselves into direct contracting.

Direct contracting involves private health care companies in risk-sharing arrangements for traditional Medicare. Similar to other alternative payment models, the goal is to lower costs while improving care for Medicare-eligible patients.

While only 53 direct contracting entities (DCEs) were admitted into CMMI’s Global and Professional Direct Contracting Model before it was paused, the termination of the Next Gen ACO program has enabled more entities to become involved.

Of the 53 existing participants who began the program on April 1, in-home medical care provider Landmark Health, whole-person senior care company Lifesprk and complex care group ConcertoCare are among those most tied to the home.

“We have a group of organizations here who are truly trying to make the health care system better, and they get energized about this,” Barret said. “So any delay causes some frustration. But the intent here is to make care significantly better.”

The environment surrounding alternative payment models has, however, created new opportunities for both providers and liaisons like CHS.

“That’s why we’re moving into direct contracting,” CHS President Anthony Valdés told HHCN. “We kind of see it as the next Next Generation model. And so we’re converting [some of our providers] from the Next Generation model over to Global DCE.”

While participants in the Next Generation model have been granted an opportunity to become involved with the new direct contracting models, some will remain “blocked out,” as Valdés put it.

Still, CHS believes that CMS will continue offering up direct contracting opportunities at a greater scale to providers in the future. When and if that happens, it will encourage providers — including home-based care providers — to get involved where they can.

“The assumption is that the DCEs continue with the new administration,” Valdés said. “And so I would say our goal at CHS goals is to be that entity that empowers providers to take on risk in the fee-for-service world.”

Companies featured in this article: