Frequently Asked Questions
Pathways Health Partners is in the Direct Contracting Model for Medicare. Most people know us as an Accountable Care Organization (ACO). As a DCE, we provide value-based care and cater to patient needs.View All Areas
Q: What is the Direct Contracting Model?
The Direct Contracting Model creates a new opportunity for the Centers for Medicare & Medicaid Services(CMS) Center for Medicare and Medicaid Innovation (Innovation Center) to test an array of financial risk sharing arrangements expected to reduce Medicare expenditures while preserving or enhancing the quality of care furnished to beneficiaries. The Direct Contracting Model leverages lessons learned from other Medicare Accountable Care Organization (ACO) initiatives, such as the Medicare Shared Savings Program and the Next Generation ACO (NGACO) Model, as well as innovative approaches from Medicare Advantage (MA) and private sector risk-sharing arrangements. This model is part of a strategy by the CMS Innovation Center to use the redesign of primary care as a platform to drive broader health care delivery system reform. The model creates a variety of pathways for participants to take on financial risk supported by enhanced flexibilities. Because the model reduces burden, supports a focus on complex, chronically and seriously ill patients, and aims to encourage organizations to participate that have not typically participated in Medicare fee-for-service (FFS) Innovation Center models, we anticipate that this model will appeal to a broad range of physician organizations and other types of health organizations.
Q: What are the benefits of participating in Direct Contracting?
Direct Contracting is intended to test whether the risk-based payment strategies available under the model align financial incentives and offer model participants (Direct Contracting Entities or DCEs) flexibility in engaging health care providers and patients in care delivery that results in preserving or enhancing quality of care while at the same time reducing the total cost of care. Specifically, Direct
• Multiple risk-sharing arrangements,
• Flexible beneficiary alignment options, including enhancements to voluntary alignment relative to existing Medicare initiatives,
• Capitation payment options that vary by risk-sharing arrangement,
• Benefit enhancements and payment rule waivers to improve care coordination and service delivery,
• A focus on complex chronic and seriously ill beneficiaries, and
• Options for organizations that have not participated in Medicare FFS previously
Q: What eligibility criteria do providers need to meet to participate as part of a DCE?
Each DCE must contract with one or more DC Participant Providers. At least 25 percent control of the DCE’s governing body must be held by DC Participant Providers or their designated representatives. DCEs may also elect to enter into arrangements with Preferred Providers. DC Participant Providers and
Preferred Providers may include, but are not limited to:
• Physicians or other practitioners in group practice arrangements
• Networks of individual practices of physicians or other practitioners
• Hospitals employing physicians or other practitioners
• Federally Qualified Health Centers (FQHCs)
• Rural Health Clinics (RHCs)
• Critical Access Hospitals (CAHs)
Q: What are some examples of benefit enhancements and beneficiary engagement incentives that will be offered in Direct Contracting?
In order to emphasize high-value services and support the ability of DCEs to manage the care of beneficiaries, CMS has designed policies using the authority under section 1115A of the Social Security Act to conditionally waive certain Medicare payment requirements as part of testing Direct Contracting. Beneficiary engagement and coordination of care could be further enhanced by providing additional incentives to beneficiaries that would potentially motivate and encourage beneficiaries to become actively involved in their care.