On December 4th, the Center for Medicare and Medicaid Innovation (Innovation Center) announced a letter of intent for an additional new value-based care option, Geographic Direct Contracting. This new model will create another option for physician organizations that want to take on financial risk and the opportunity for reward for their traditional Medicare patients.
“Physicians of SW Washington (PSW) has been on a value journey since 2016 through our Medicare Advantage contracting and the Next Generation Accountable Care Organization model,” said Melanie Matthews, CEO of PSW. “We are fully committed to the evolution of payment and delivery models and look forward to continuing to work with the Innovation Center as the Direct Contracting model portfolio develops.”
The Direct Contracting model builds on the success of the Next Generation and Medicare Shared Savings Program Accountable Care Organizations. These total cost of care models change the Medicare payment system from one that rewards for volume to one that rewards for improved patient outcomes and lower costs. The Geographic Option tests this on a potentially larger scale in specific test markets.
“The COVID-19 pandemic has underscored the vulnerability of the fee-for-service payment system” said Matthews. “Bold steps forward are necessary to continue to drive change in the way healthcare is delivered and paid for.”
Additional information on the Geographic Direct Contracting model is available here.