More on Medicare & Medicaid

CMS announces new Geographic Direct Contracting model to advance regional value-based care

The model is part of CMMI's suite of direct contracting models and offers incentives to improve care across geographic regions.

Jeff Lagasse, Associate Editor

Seema Verma

The Centers for Medicare and Medicaid Services on Wednesday announced the new voluntary payment value-based Geographic Direct Contracting model.

The model will test an approach to improving health outcomes and reducing the cost of care for Medicare beneficiaries in multiple regions and communities across the country. 

Through the model, participants will take responsibility for beneficiaries' health outcomes, which gives participants a direct incentive to improve care across geographic regions. Within each region, organizations with experience in risk-sharing arrangements and population health will partner with healthcare providers and community organizations to better coordinate care.


Model participants will work within defined geographic regions to maintain and improve care coordination.

Specifically, model participants will coordinate care and clinical management for beneficiaries in original Medicare in their region. This coordination may include care management services and telehealth, as well as help for beneficiaries to understand which providers have a history of delivering better results and lower costs over the long term.

To help with delivering improved outcomes, participants may create a network of preferred providers. Participants and preferred providers may choose to enter into alternative payment arrangements, including prospective capitation and other value-based arrangements.

Participants will also work to augment Medicare's current program integrity efforts, with the aim of reducing fraud, waste, and abuse in their region and decreasing costs for beneficiaries and taxpayers.

Model participants will have the ability to reduce beneficiary cost-sharing for Medicare Part A and Part B services, as well as to offer beneficiaries a Part B premium subsidy. Lower out-of-pocket costs are intended to allow beneficiaries to seek high-value care while maintaining the choice they have in the original Medicare program.

While providers and participants may choose to voluntarily enter into value-based arrangements, the model will not change how Medicare-enrolled providers care for beneficiaries in original Medicare.

Beneficiaries in the model will maintain all of their existing original Medicare benefits, including coverage rights and the ability to see any provider. Beneficiaries may also receive enhanced benefits, including additional telehealth services, easier access to home care, access to skilled nursing care without having to stay in a hospital for three days, and concurrent hospice and curative care. 

Beneficiaries keep all of the protections of original Medicare, including access to all Medicare providers and suppliers, the freedom to choose and change providers, and a strong appeals and Ombudsman system.

Organizations that are potentially interested in participating in the Model should submit a non-binding Letter of Interest to CMS by 11:59 p.m. P.T. on Monday, December 21, at Geographic Direct Contracting Model Letter of Interest. Letters of Interest will be used to determine the final regions in which CMS will solicit participants.

The Request for Applications will be made available in January 2021, and applications will be due on April 2, 2021. Model participants will be selected by June 30, 2021. The first three-year performance period will run from January 1, 2022, through December 31, 2024. A second three-year performance period will run from January 1, 2025, through December 31, 2027.


Geographic Direct Contracting follows an announcement of participants in the new direct-contracting Accountable Care Organization risk model from the Center for Medicare and Medicaid Innovation. Fifty-one providers are participating in direct contracting, the new risk model that has evolved from Next Generation.


"The need to strengthen the Medicare program by moving to a system that aligns financial incentives to pay for keeping people healthy has long been a priority," said CMS Administrator Seema Verma. "This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality, and lower the cost of care for Medicare beneficiaries in a community."

"The Geographic Direct Contracting Model is part of the Innovation Center's suite of Direct Contracting models and is one of the Center's largest bets to date on value-based care," said CMMI Director Brad Smith. "The model offers participants enhanced flexibilities and tools to improve care for Medicare beneficiaries across an entire region, while giving beneficiaries enhanced benefits and the possibility of lower out-of-pocket costs. By initially testing the model in a small number of geographies, we will be able to thoughtfully learn how these flexibilities are able to impact quality and costs."

Twitter: @JELagasse
Email the writer: