On November 25, 2019, CMS released a Request for Application (RFA) describing how organizations can apply to participate in two of three Direct Contracting Model options. The Direct Contracting Model is a set of voluntary payment models that aim to lower costs and maintain or improve quality for Medicare fee-for-service (FFS) beneficiaries through risk-based contracts. The application to participate closes on Tuesday, February 25, 2020. To apply, organizations must first submit a Letter of Intent (LOI), indicating their interest in model participation. The LOI submission period ends on December 10, 2019.

Model participants, known as Direct Contracting Entities, collectively take accountability for a Medicare FFS population through a combination of capitation and shared savings and losses. These new payment model options are aimed at providers that were unable to participate in legacy models, such as the Medicare Shared Savings Program or the Next Generation Accountable Care Organization (NGACO) Model or both. CMS also states that the Direct Contracting Model offers an option for NGACO Model participants after the NGACO Model ends in December 2020.

The two Direct Contracting Model options currently available for participation include:

• The Professional Option – a lower-risk option with 50 percent shared savings/shared losses and a primary care capitation equal to seven percent of the performance year benchmark for enhanced primary care services; and
• The Global Option – full risk option with 100 percent shared savings/shared losses and either a primary care capitation or total care capitation.

As CMS explains, the Professional and Global options aim to:

• Transform risk-sharing arrangements in Medicare FFS by offering both capitated and partially capitated population-based payments that move away from traditional Medicare FFS.
• Broaden participation in CMS Innovation Center models by allowing model participation by organizations new to Medicare FFS, such as physician managed organizations currently operating exclusively in the Medicare Advantage program.
• Empower beneficiaries to engage in their care delivery through voluntary alignment and potential benefit enhancements.
• Reduce health care provider burden to meet health care needs effectively through, for example, a smaller set of core quality measures and waivers to facilitate care delivery.

CMS plans to release more details on the third model, the Geographic option, at a later date. The Geographic option is a full risk option with 100 percent shared savings/shared losses that will offer an opportunity to assume total cost of care risk for Medicare Parts A and B services for Medicare FFS beneficiaries in a defined target region.

The RFA, which includes more details on the Direct Contracting Model, is available here. CMS’s webpage to submit an LOI is available here.