Beneficiary Engagement and Incentives: Shared Decision Making (SDM) Model

The Centers for Medicare & Medicaid Services (CMS) identifies strengthening beneficiary engagement as one of the agency’s goals to help transform our health care system into one that delivers better care, smarter spending, healthier people, and puts individuals at the center. Specifically, the “CMS Quality Strategy envisions health and care that is person-centered, provides incentives for the right outcomes, is sustainable, emphasizes coordinated care and shared decision making, and relies on transparency of quality and cost information."


Beneficiary engagement broadly refers to the actions and choices of individuals with regard to their health and health care, and these decisions impact cost, quality, and patient satisfaction outcomes. The Beneficiary Engagement and Incentives (BEI) Models -- the Shared Decision Making Model and the Direct Decision Support Model -- will test different approaches to shared decision making, acknowledging that beneficiaries make decisions regarding treatment options in a variety of ways. The Center for Medicare and Medicaid Innovation is testing the BEI Models under the authority of Section 1115A of the Social Security Act (as added by Section 3021 of the Affordable Care Act).

The Shared Decision Making Model (SDM Model) will test a specific approach to integrate a structured Four Step shared decision making process into the clinical practice of practitioners who are participating Accountable Care Organizations (ACOs). The shared decision making process is a collaboration between the beneficiary and the practitioner.

Model Details

Despite the inherent value of shared decision making, and being a required component of efforts like the Medicare Shared Savings Program, the literature indicates that practitioners have found it difficult to integrate shared decision making into their routine workflows for various reasons such as overworked physicians, insufficient practitioner training, inadequate clinical information systems, lack of consistent methods to measure that shared decision making is taking place, and uncertainty as to whether, or how, to promote change and invest in the time, tools, and training required to achieve meaningful shared decision making.

The SDM Model aims to integrate a specific, structured Four Step process of shared decision making into the routine clinical practice of practices of participating ACOs, resulting in more informed and engaged beneficiaries who collaborate with their practitioners to make medical decisions that align with their values and preferences.

The SDM Model focuses on six preference-sensitive conditions:

  • stable ischemic heart disease,
  • hip osteoarthritis,
  • knee osteoarthritis,
  • herniated disk and spinal stenosis,
  • clinically localized prostate cancer (cancer that is confined to the prostate gland) and
  • benign prostate hyperplasia (BPH).

A preference-sensitive condition is a medical condition for which the clinical evidence does not clearly support one treatment option, and the appropriate course of treatment depends on the values or preferences of the beneficiary regarding the benefits, harms, and scientific evidence for each treatment option.

CMS plans to operate the SDM Model in an intervention group of practices participating in 50 ACOs nationwide with an equal number of comparison group ACOs. Only those ACOs participating in the Medicare Shared Savings Program or Next Generation ACO Model are eligible for selection to participate in the SDM Model. The SDM Services will be offered to Medicare FFS beneficiaries who receive services from a practitioner participating in a participating Next Generation ACO Model or Medicare Shared Savings ACO with one of the relevant preference-sensitive conditions. The SDM Model expects to engage over 150,000 Medicare beneficiaries annually through the efforts of participating ACOs.

CMS will select ACOs that are willing to commit to an initial period of two years of model participation. CMS plans to offer up to three year-by-year renewals to participating ACOs that show evidence of alignment with model goals. The initial period and all potential renewals amount to up to five years of model operations.

CMS is providing participating ACOs with financial support to invest in a structured process that it believes will reduce or keep neutral Medicare spending while maintaining or improving quality, and will also result in improvements in patient engagement and experience with care.


The SDM Model will pay participating ACOs $50 for each SDM Service furnished by its SDM practitioners, as long as all required SDM Activities are completed.

The Four Step Shared Decision Making (SDM) process must be provided by a SDM practitioner and includes:

  1. Identifying SDM eligible beneficiaries;
  2. Distributing the Patient Decision Aid (PDA) to eligible beneficiaries;
  3. Furnishing the SDM Service; and
  4. SDM tracking and reporting.

Step 3 is considered a SDM Service (furnished by the SDM practitioner) and Steps 1, 2, and 4 are considered SDM Activities (completed by the participating ACO, and/or SDM practice or practitioner).

Quality Payment Program

The SDM Model will be considered an Alternate Payment Model (APM); but not an Advanced APM or MIPS APM.

ACO Participation in the SDM Model will not directly impact or change the amount of risk or any other criteria pertaining to Advanced or MIPS APMs, and therefore will not affect clinicians’ eligibility for payment adjustments or incentives through the Quality Payment Program. Instead, participation in the Next Generation ACO Model or Medicare Shared Savings Program will determine their Quality Payment Program adjustments or incentives status in either MIPS or as a Qualifying APM Participant (QP) in an Advanced APM.

SDM Definitions

The SDM Model uses the following terms, as defined below: a participating ACO, a SDM practice, a SDM practitioner.

A participating ACO is a Next Generation ACO Model or Medicare Shared Savings Program ACO that is participating in the SDM Model. 

An SDM practice is an ACO participant, including a Medicare Shared Savings Program or a Next Generation Participant, or a Next Generation Preferred Provider that is participating in a Participating ACO.

An SDM practitioner is an ACO professional in an SDM Practice who will be furnishing the SDM Service to applicable beneficiaries under the SDM Model.

For more information, please contact

Additional Information