Geographic Direct Contracting Model

Update: The Geographic Direct Contracting Model is currently under review and will no longer begin on January 1, 2022. CMS looks forward to sharing additional information when available.

The Geographic Direct Contracting Model (also known as the “Model” or “Geo”) is a new payment and service delivery model being tested by the Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center). The Model will test whether a geographic-based approach to care delivery and value-based care can improve health and reduce costs for Medicare beneficiaries across an entire geographic region. Leveraging best practices and lessons learned from leveraging lessons learned from other Medicare Accountable Care Organization (ACO)shared savings initiatives, such as the Medicare Shared Savings Program (Shared Savings Program) and the Next Generation ACO (NGACO) Model, as well as innovative approaches from Medicare Advantage (MA), Medicaid Managed Care, and private sector risk-sharing arrangements Geo will enable Direct Contracting Entities (Geo DCEs) to build integrated relationships with healthcare providers and community organizations in a region to better coordinate care and address the clinical and social needs of Medicare beneficiaries.

Background

Geo builds on lessons the CMS Innovation Center has learned from prior Medicare shared savings initiatives, including the Medicare Shared Savings Program and the Next Generation ACO Model, as well as innovative approaches from Medicare Advantage, Medicaid Managed Care, and commercial health risk-sharing arrangements. Geo requires participants to take full risk with 100 percent shared savings / shared losses, with risk corridors, for Medicare Parts A and B services for Medicare fee-for-service beneficiaries in a defined target region. Geo will be tested over a six-year period in four to ten regions and will include two three-year Model Agreement Periods.

Direct Contracting Entities (DCEs) in Geo will assume financial risk in return for enhanced flexibilities, making it possible for these entities to offer Medicare beneficiaries an increased focus on care coordination through care delivery innovation. The additional tools and flexibilities available to DCEs include preferred provider networks, care coordination and clinical management, and payment  integrity and medical review. Beneficiaries will maintain all of their Original Medicare benefits including access to all Medicare enrolled providers and all existing appeal rights under Original Medicare. The unique, geographic focus of the Model allows DCEs to make investments in communities and build relationships based on their knowledge of a community’s specific local needs.

The Geographic Direct Contracting Model builds on the design of the Global and Professional Direct Contracting (GPDC) Model. For more information on the GPDC Model, please visit: https://innovation.cms.gov/innovation-models/direct-contracting-model-options.

What are Geo’s goals?

The goal of Geo is to test whether DCEs are able to improve quality and lower costs for Medicare beneficiaries across an entire region. Beneficiaries in the region will maintain all their Original Medicare benefits but may receive access to enhanced benefits and may have lower (but never higher) out-of-pocket costs for certain services than in Original Medicare. Providers and suppliers in the region will have the option to enter into value-based payment arrangements with DCEs. Providers and suppliers that choose not to enter into an arrangement with a DCE will continue to be reimbursed at 100% Medicare FFS rates. The primary goals of Geo are to allow beneficiaries to benefit from:

  • Better Care: DCEs will be incentivized to provide a less fragmented health care system that better coordinates care and focuses on preventive services. DCEs will also offer care management and other clinical programs to support care for beneficiaries with chronic and serious illnesses.
  • Benefit Enhancements and Beneficiary Engagement Incentives: Beneficiaries will have access to benefit enhancements, including enhanced telehealth access, easier access to home health care by modifying the homebound requirement, waiver of the three-day prior hospitalization requirement for skilled nursing facility care, and incentives for accessing care management programs such as smoking cessation and weight loss programs.
  • Lower Out-of-Pocket Costs: DCEs will have the option to reduce beneficiary out-of-pocket costs through mechanisms including reduced cost sharing in Part A and Part B as well as offering a Part B premium subsidy.
  • Strong Beneficiary Protections: Beneficiaries will keep all of the protections of Original Medicare, including access to all Medicare providers and suppliers, a strong appeals system, the ability to choose and switch among DCEs to find the organization that best fits their needs, and strong CMS oversight of DCE performance.

What is the model timeline?

CMS completed a Letter of Interest (LOI) process from December 3 – December 21, 2020.

The Geo Model will be tested over a six-year period in four to ten regions and will include two three-year Model Agreement periods. The Geo Model is currently under review and will no longer begin on January 1, 2022. CMS will share additional information when available.

If you are interested in additional information about Geo, please contact DCGEO@cms.hhs.gov.

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Additional Information

Last updated on:
04/08/2021