With 51 Direct Contracting Entities (DCEs) currently participating in the Implementation Period of the Direct Contracting Model for Global and Professional Options, it’s an exciting time for the healthcare community. This period began in October 2020 and will run through March 31 of 2021.

Direct Contracting is “a set of 3 voluntary options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in Medicare fee-for-service (FFS).” The payment model options allow diverse organizations and medical professionals to participate in risk-sharing arrangements to produce better healthcare results by participating with the Centers for Medicare and Medicare Services (CMS) in an innovative payment model. Physicians and other medical professionals can essentially share the financial burden of healthcare costs without compromising high-quality care.

diverse healthcare workforce

The 4 types of DCEs with distinguishing features regarding operation and perimeters include Standard DCEs, New Entrant DCEs, High Needs Population, and MCO-based DCEs

Let’s take a look at the changes DCEs are bringing to healthcare.

What are the goals of the payment model options?

The core goals of the payment model option for DCEs focus on 4 core areas:

  • the payment model transforms risk-sharing arrangements by offering fixed population-based payments
  • it also works to empower beneficiaries by voluntarily aligning with these entities and possibly receiving benefit enhancements
  • it allows beneficiaries to receive access to innovative care that they previously didn’t
  • it will also reduce provider burden and allow numerous healthcare professionals to work together to meet the patient’s needs

What are the participation options? 

The 2 risk-sharing payment options available are Professional and Global. Professional offers lower risk-sharing with 50% savings/loss. Global is highest risk-sharing with 100% savings/loss.

Both options “aim to attract a range of healthcare providers operating under a common governance structure, with attention given to advancing primary care as a means to better managing healthcare overall.” They also both include features designed to inspire healthcare organizations “focused on care for patients with complex, chronic conditions, and seriously ill populations to participate.”

young nurse with patient

How will participants be paid?

For participants in the Professional option, CMS will offer primary care fixed pricing equal to 7% of the complete cost of care for enhanced primary care services and 50% of shared savings/shared losses with CMS.

For participants in the Global option, CMS will offer them either Primary Care Capitation or Total Care Capitation, plus 100% shared savings/losses. 

How will participants be selected?

Potential participants will be required to submit a letter of intent for application. CMS will review those letters, and then work with the group to ensure that the program is a good fit moving forward.

What is the program timeline? 

Applicants for 2021 have already received their participation notification. Healthcare organizations can expect to see a Request for Applications (RFA) for both participation options in early 2021. That will be the first RFA to include MCO-based DCEs. Those entities will begin participating in January 2022.

Key date for this year’s participants include:

  • Implementation period began
  • First performance period begins
  • Performance period ends

Expect to see more coverage on DCEs from the Harmony Trends Team, including a more in-depth look at the value they bring to healthcare and news on the first performance period.

Learn more about the types of DCEs here.

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