Direct Contracting

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Direct Contracting (DC) is a set of voluntary payment model options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in Medicare fee-for-service (FFS).  The payment model options available under DC create opportunities for a broad range of organizations to participate with the Centers for Medicare & Medicaid Services (CMS) in testing the next evolution of risk-sharing arrangements to produce value and high quality health care.  Building on lessons learned from initiatives involving Medicare Accountable Care Organizations (ACOs), such as the Medicare Shared Savings Program (MSSP) and the Next Generation ACO (NGACO) Model, the payment model options available under DC also leverage innovative approaches from Medicare Advantage (MA) and private sector risk-sharing arrangements. 

DC creates three payment model options for participants to take on risk and earn rewards, and provides them with choices related to cash flow, beneficiary alignment, and benefit enhancements.  The payment model options are anticipated to appeal to a broad range of physician practices and other organizations because they are expected to reduce burden, support a focus on beneficiaries with complex, chronic conditions, and encourage participation from organizations that have not typically participated in Medicare FFS or CMS Innovation Center models.  In an effort to further refine one proposed payment model option, CMS is seeking additional input from the public through a Request for Information (RFI) regarding their perspectives on specific design parameters for a Geographic Population-Based Payment (PBP) option

Additional Resources:

Direct Contracting Fact Sheet

RFI Fact Sheet

CMS Primary Care Initiatives Fact Sheet

Last updated May 2019
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