Blog | Value-Based Payment

CMMI announces Direct Contracting participants but cancels second round of applications

Blog | Value-Based Payment

CMMI announces Direct Contracting participants but cancels second round of applications

The Center for Medicare & Medicaid Innovation announced the 53 entities that were accepted as participants in the new Global and Professional Direct Contracting (GPDC) model, a five-year demonstration that began April 1.

In a departure from previous plans, the agency also announced it would not accept applications starting next year to participate in a second round of the model. Organizations that previously applied but deferred their start to Jan. 1, 2022 can begin on that date as scheduled.

CMMI did not state a reason for the cancellation of the second set of applications, but the agency likely wants to gauge how the first cohort fares before proceeding further.

Features of the new model

GPDC is described as an effort to use “the redesign of primary care as a platform to drive broader healthcare delivery system reform.” Specifically, CMMI hopes to transform risk-sharing arrangements in Medicare fee for service (FFS) by emphasizing population-based payments.

The model also represents an effort to incorporate organizations that are new to Medicare FFS in value-based payment (VBP) efforts. Some of the participants are:

  • Physician-managed organizations that historically operate exclusively in Medicare Advantage
  • Medicaid managed care organizations that serve full-benefit dually eligible beneficiaries

Of the 53 DCEs, 39 chose the Global risk-sharing option, which is a full-risk option (subject to risk corridors) with partial or total capitation. The remainder chose the Professional option, which involves 50% shared savings/shared losses and capitation generally equal to 7% of the performance-year benchmark.

A DCE uses the capitated payments to establish payment arrangements with its network of downstream providers, who also will continue to submit claims to Medicare.

Participating DCEs fall into one of three categories:

Standard. Organizations with substantial experience serving Medicare FFS beneficiaries (including Medicare-only and dually eligible beneficiaries) who are aligned to a DCE through voluntary or claims-based alignment.

New Entrant. Organizations with less experience serving a Medicare FFS population and/or taking risk for Medicare FFS beneficiaries.

High Needs Population. DCEs that serve Medicare FFS beneficiaries with complex needs (including dually eligible beneficiaries) who are aligned to the DCE through voluntary or claims-based alignment.

Efforts to serve beneficiaries better

CMMI has touted the GPDC model as the latest evolution in VBP, building on lessons from the Medicare Shared Savings Program and the Next Generation ACO model while also drawing ideas from Medicare Advantage and private risk-sharing arrangements.

The homepage for the model highlights some of the patient-centered goals:

“The GPDC Model is expected to increase beneficiaries’ access to innovative, affordable care while maintaining all original Medicare benefits.” DCEs “may offer benefit enhancements and beneficiary engagement initiatives to beneficiaries with no requirement that beneficiaries accept these benefits or services.

“Relative to prior CMS initiatives, the GPDC Model places an emphasis on voluntary alignment, empowering beneficiaries to choose the healthcare providers with whom they want to have a care relationship. The GPDC Model also aims to improve beneficiaries’ experience of care by reducing administrative burdens on practitioners, so that they can focus on what is most important: spending time with patients.”

The GPDC Model is separate from the Geographic Direct Contracting Model, which was scheduled to begin in 2022 before implementation was paused while the model undergoes further review.

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (

Sign up for a free guest account and get access to five free articles every month.


Related Articles | Value-Based Payment

News | Strategic Partnerships Mergers and Acquisitions

Healthcare M&A activity for Q3 remains low in volume but high in impact, firms report

The number of M&A transactions involving hospitals and health systems remained at historically low levels, but the average revenue involved was far higher than in recent years.

News | Strategic Planning

Consumerism and the transition to value are among the trends drawing strategic reactions from healthcare providers, survey finds

A recent survey finds healthcare providers working to ensure their strategic planning incorporates key trends, spurring innovations in care delivery models.

News | Cost Effectiveness of Health

The stakes are only growing in efforts to improve the cost effectiveness of health, CMMI’s Elizabeth Fowler says

The head of the Center for Medicare & Medicaid Innovation spoke with an HFMA audience about the importance of efforts at the federal level and beyond to improve the cost effectiveness of health.

News | Medicare Payment and Reimbursement

Report by Medicare trustees describes a daunting payment picture for healthcare providers

The Medicare Hospital Insurance Trust Fund is on course to run out of money by 2026, and that assessment wasn’t the only concerning part for hospitals in a new government report.