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Dear Direct Contracting Entities (DCEs),
We have received a number of questions over the past few weeks about whether the GPDC Model will make adjustments to its financial methodology related to the COVID-19 Public Health Emergency, for example pursuant to Section VI.G of Appendix B of the Participation Agreement (PA) (‘extreme and uncontrollable circumstances’), Section I.E.4(c) (or equivalent sections, as applicable) of Appendix B of the PA (‘Regional Trend’), or by virtue of an Amendment to the PA.
The GPDC Model team has analyzed COVID-19 related impacts on PY2021 and does not plan to make any changes to the existing financial methodology and COVID-19 policies. We describe our rationale below for each of the three primary concerns / proposed changes raised by DCEs. We will continue to monitor expenditure trends during the pandemic.
DCEs asked us to consider modifying the retrospective trend adjustment because of COVID-19 fluctuations:
- While we understand that retrospective expenditure trends create uncertainty, as of Q4 the retrospective trend adjustment is tracking very closely to the ~5.3% Aged & Disabled trend (ESRD trend shows similar results) communicated with the Preliminary Benchmark reports prior to the start of the Performance Year (and before participation agreements were signed).
- There is evidence that ACOs have achieved high savings in COVID-impacted performance years in other models and programs (MSSP and NGACO), so retrospective trending during COVID-19 does not preclude financial success.
- As such, the GPDC Model team will not offer a PA Amendment for PY2021 to change how the retrospective trend adjustment functions (e.g., by adjusting the retrospective trend adjustment by the 1% guardrail or limiting it to remain above a fixed trend).
DCEs asked us to consider adjusting risk scores and expenditure trends to account for regional variation during COVID-19:
- We observe only slight increases in regional variability for both expenditure trends and risk score growth rates for PY2021 relative to earlier years, such as 2017-2019. These increases are minimal relative to the degree of inherent variability consistently observed in year-to-year county expenditure trends and risk score growth rates.
- Moving from a national approach to regional approaches would have significant and varied impacts across DCEs, and we have not seen sufficient evidence of COVID-19 impacts to merit such adjustments.
- As such, the GPDC Model team will not replace the national trend with DCE-specific regional trends for PY2021 pursuant to Section I.E.4(c) (or equivalent sections, as applicable) of Appendix B of the PA. We will also be maintaining the risk score policies as described in the PA.
DCEs asked us to consider removing COVID-19 episodes from financial calculations & limiting downside risk:
- The GPDC Model began in April 2021. At that time, vaccinations were widely available in the Medicare population, and COVID-19 impacts had declined relative to a peak in January/February 2021. For this reason, GPDC model adjustments for COVID-19 were intentionally limited in scope, recognizing that the Model would need to function in a period with uncertain COVID-19 impacts.
- While there have been new COVID-19 variants, we have not seen inpatient COVID-19 costs exceed that January/February peak as of the close of PY2021.
- DCEs were also given the option to defer to January 2022 to avoid potential PY2021 impacts.
- As such, the GPDC Model team will not limit downside risk pursuant to Section VI.G of Appendix B of the PA or offer a PA Amendment to remove months impacting by COVID episodes from financial calculations.
Thank you,
The GPDC Model Team
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