CMS Announces Geographic Direct Contracting Model

AHA Special Bulletin
December 3, 2020

The Centers for Medicare & Medicaid Services (CMS) Dec. 3 announced the Geographic Direct Contracting Model (known as “Geo”) through which participants will take responsibility for the total cost of care (TCOC) for a portion of all Medicare fee-for-service (FFS) beneficiaries in a specific region. The goal of the model is to enable “Direct Contracting Entities” (DCEs) to build integrated relationships with health care providers and community organizations in a region to better coordinate care and address the clinical and social needs of Medicare beneficiaries. This model completes the Center for Medicare and Medicaid Innovation’s (CMMI) suite of direct contracting model options, joining the Global and Professional direct contracting options announced earlier this year.

Key Takeaways

The model will:

Launch in 2022, with a second, alternative launch date in 2025;
Require potential participants to submit a non-binding Letter of Intent by Dec. 21;
Be tested in four to 10 regions from a list of 15 that CMS identified;
Be open to ACOs, health systems, health plans and others that can apply to be DCEs and preferred providers that can align with the DCEs;
Require DCEs to take responsibility for the total cost of care for a portion of all beneficiaries in a region;
Require DCEs to bid a discounted payment amount against their region’s historical spending;
Enable DCEs and preferred providers to offer beneficiaries a variety of enhanced benefits and other incentives;
Feature two voluntary capitation payment options – total and partial capitation – for compensating preferred providers;
Evaluate participants’ financial performance against a regional benchmark;
Evaluate participants’ quality performance on seven quality measures, and utilize an increasing quality withhold that participants can earn back based on their quality scores.

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