Dive Brief:

• Controversy around a direct contracting model the Biden administration rebranded and redesigned earlier this year following pressure from progressive Democratic lawmakers and single-payer advocates was excessive and not based in fact, according to some members of the accountable care community.
• Grassroots opposition to the Trump-era model, in which physicians can accept either full or partial capitation as payment in traditional Medicare, ramped up late last year and reverberated up to Capitol Hill in 2022. Critics slammed direct contracting as a thinly veiled effort to privatize the Medicare fee-for-service program, even as hundreds of providers voiced their support.
• The National Association of Accountable Care Organizations felt these concerns were "very false and misleading," said David Pittman, NAACOS senior policy adviser, at NAACOS spring conference on Friday. "If politics could kill an ACO model, that would be devastating."

Dive Insight:

The Trump administration unveiled the original direct contracting model in 2019, with the goal of coordinating primary and specialty care, while allowing access to enhanced benefits. It offered a higher level of risk and reward than other ACO models at the time, which garnered it strong support from many health systems, physicians and medical group organizations.

Supporters said holding physicians accountable for outcomes meant patients would be more likely to receive team-based, preventative care that improved outcomes while lowering costs.

However, critics argued the model was a step toward privatizing Medicare by allowing a variety of entities, including those owned by private equity firms, to manage patient care, and would increase costs in the cash-strapped program while harming patient access.

Antagonistic rhetoric around the model grew in intensity late last year, with members of Physicians for a National Health Program, which supports a single-payer system, staging a protest in front of the HHS building in Washington, D.C., in December.

The issue eventually caught the attention of lawmakers. Direct contracting came under increased fire during a February hearing of the Senate Finance Committee.

Chairwoman Elizabeth Warren, D-Mass., called on the administration to end the model immediately, saying in opening remarks that direct contracting would open the door for "insurers that are already scamming Medicare and dozens of investor-owned organizations" to cover beneficiaries while pocketing "as much as 40% in profits."

"President Biden should not permit Medicare to be handed over to corporate profiteers," Warren said.

However, regulators maintained it would be disruptive to cull the model completely. More than 200 provider groups called on the government to amend direct contracting instead.

In late February, the CMS announced it would retain the model — albeit with numerous changes and a new name: Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model.

Now, ACOs are saying the issue was blown out of proportion.

The discussion on Capitol Hill was rooted in a "real lack of understanding" around the beneficiary protections and cost investments inherent in ACOs, said Melanie Matthews, CEO of physician group Physicians of Southwest Washington.

"The unfortunate thing is that a number of us share the opinion that a lot of that discussion was just not grounded in fact. And that was not a positive thing that came out of this," Corey Rosenberg, ACO REACH model lead at the CMS Innovation Center, said.

Gary Jacobs, executive director for VillageMD's Center for Public Policy, said that the value-based primary care network anticipated direct contracting would be a political issue after it was introduced late in the Trump administration.

But "the argument that we can game the system to make money is bullsh--," Jacobs said.

Panelists noted the negative rhetoric — which some argued was initially based on well-founded concerns around private equity in healthcare before snowballing — also challenged the ongoing push toward value-based care.

"This is just as threatening to the underlying ACO movement as it is to the underlying direct contracting model," Matthews said.

According to Andrew Allison, CEO of direct contracting entity On Belay Health Solutions, it's important for healthcare organizations to "never assume" that elected representatives understand the minutiae of their industry or the programs they're involved in. Many ACOs assumed the heat would blow over, but quickly found themselves on the wrong side of the messaging debate as public opinion swung against the model.

"We need to stay on the offensive and keep the rhetoric positive," Allison said.