APG Letter to Secretary Becerra on Direct Contracting

January 10, 2021

The Honorable Xavier Becerra
U.S. Department of Health & Human Services
200 Independence Avenue SW
Washington, DC 20201

The Honorable Chiquita Brooks- LaSure
Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Re: Recent Criticisms against the Global and Professional Direct Contracting Pilot Program

Dear Secretary Becerra and Administrator Brooks-LaSure:

America’s Physician Groups (APG) and the undersigned organizations would like to thank both of you for your continued efforts in working to serve the nation and our healthcare system. As an association representing hundreds of healthcare organizations that are engaged in moving away from our dysfunctional, unsustainable fee-for-service reimbursement structure toward a clinically integrated, value-based healthcare system which lowers costs and improves patient care we recognize the important work your teams do in supporting alternative payment models and the providers who work within them.

It is in this spirit of partnership we write in response to recent criticisms of CMMI’s Global and Professional Direct Contracting (GPDC) model reported in The Hill and other publications, as well as a letter sent to you by Representative Pramila Jayapal and other Members of the U.S. House of Representatives.

About America’s Physician Groups
APG is a national professional association representing over 340 physician groups employing or contracting with approximately 195,000 physicians and providing care to nearly 45 million patients. Our tagline, “Taking Responsibility for America’s Health,” represents our members’ vision to move away from the antiquated fee-for-service (FFS) reimbursement system where clinicians are paid “per click” for each service rendered rather than on the outcomes of the care provided.

The opinion pieces referenced above express concerns about GPDC and allege the model has the potential to disrupt Medicare and patients’ access to the program. One piece characterized the pilot as a “middleman” between patients and Medicare that stifles patient choice. In the end, it recommended that to protect patient interests throughout Medicare, the Biden Administration stop the GPDC pilot program entirely. We strongly disagree with this sentiment.

Direct Contracting presents an invaluable opportunity to study in real-time the effect a capitated payment system has on primary care in the United States. The model also provides resources opening the door to expansion of primary care into distressed communities that have previously been unreachable by proactively empowering primary care doctors to serve underserved communities that are disproportionately affected by the consequences of health disparities and inequities.

APG seeks to work alongside HHS, CMS, and other agencies to allow those closest to Medicare beneficiaries and their care, such as physicians and physician groups, to not be encumbered by the FFS system and the barriers that exist within it; barriers which prevent physician groups from undertaking activities geared toward addressing social determinants of health, coordinating care, and other beneficial aspects of treatment. Recognizing these groups and paying them differently in accordance with their activities that allow for greater health outcomes and patient care, through programs such as GPDC, is positive for both Medicare beneficiaries and the Medicare program itself.

APG sees GPDC as a model which allows for the participation of physician groups and was designed with their inclusion and success in mind. GPDC should be a physician group focused model which enables physicians to provide care centered around attaining greater outcomes for patients in an efficient, coordinated manner. APG welcomes the opportunity to work with HHS, CMS, and other relevant agencies as regulations are formulated and drafted to provide a framework for how a physician group focused model would work.

We do share the view that reforms to HCC Coding are needed. We must, however, provide the following evidence to set the record straight on other inaccuracies and omissions made public over the past few weeks.

The arguments previously published reflect a lack of appreciation for the indispensable role risk adjustment plays in compensation under capitated models such as Medicare Advantage (MA) and GPDC. Risk adjustment is needed for risk stratification and the appropriate referral to care coordination and disease management programs. Risk adjustment is essential in these models because it estimates a beneficiary’s future healthcare costs and aligns compensation both with acuity and severity of disease. As our members have proven, risk adjustment encourages both the enrollment of the sickest patients and those who come from lower income communities; risk adjustment is widely used in both MA and the Medicare Shared Savings Program (MSSP).

Contrary to what is claimed in the opinion pieces, physicians, and beneficiaries across the country view GPDC as the next iteration of the ACO model which will empower primary care doctors’ (PCP) transition into performance-based risk contracting while delivering better value to patients through the coordination of care across multiple settings. Direct Contracting Entities build upon the learnings from earlier ACO models by introducing new concepts – including capitation and unique benchmarking – and represent a gradual, evolutionary path toward supporting physicians to manage a population and accept risk tied to quality outcomes.

The GPDC model is not without imperfections, but in addressing areas that can be improved, it is important we do not end the program prematurely; it can serve as a learning ground for groups moving into value-based care with the availability of capitated payments and unique program aspects.

Thank you for your attention to our perspective. We look forward to meeting with both of you soon. Please feel free to contact Valinda Rutledge, Executive Vice President, Federal Affairs, (vrutledge@apg.org) with the best available times to connect, if you have any questions, or if America’s Physician Groups can provide any assistance as you consider these issues.


Donald H. Crane
President and CEO
America’s Physician Groups

cc: Elizabeth Fowler, Deputy Administrator and Director, CMS Innovation Center


Anas Daghestani, President & CEO
Austin Regional Clinic

Dr. Greigh Hirata, President
Hawaii Independent Physicians Association

Kamal Jemmoua,
Providence Health Plan

President Mark O’Halla, President and CEO
Prisma Health

Tim Barry, Co-Founder and CEO

Rushika Fernandopulle, CIO
One Medical

James Brown, CEO
Prospects Medical Systems, Inc.

J. William Wulf, MD, CEO
Central Ohio Primary Care

Alan Bier, MD, President
Sharp Rees-Stealy Medical Group

Kenneth Roth, MD, President
Sharp Community Medical Group

Stacey Hrountas, CEO
Sharp Rees-Stealy Medical Centers

Chris Howard, President and CEO
Sharp Healthcare

Melanie Matthews, CEO

Chris Chen, CEO

David S. Kim, MD, Chief Executive, Physician Enterprise
Providence Health System

Srin Vishwanath, CEO
OPN Healthcare

Marc Harrison, MD, CEO
Intermountain Healthcare

William Gerard, MD, CEO
inVio Health Network

Mark Mantei, CEO
Vancouver Clinic

Terry Smith, COO
Arizona Health Advantage

Amar Desai, MD, President and CEO
Optum Pacific West

Mike Pykosz, CEO
Oak Street Health

Larry Wedekind, CEO
Integranet Health

Ronald Dixon, MD, CEO
CareHive Health

Steve Sell, CEO
agilon health