Toward the end of 2020 CMS announced its new model around Direct Contracting Entities (DCE) which begins its performance year on April 1, 2021. The new payment model aims to reduce healthcare costs while enhancing the quality of care for Medicare Fee For Service beneficiaries. Not a novel idea, but this program has far more skin in the game for providers and much more potential upside for beneficiaries.


Leading up to the roll out and implementation of CMS’ Direct Contracting program, providers and managed care organizations have had a lot of practice with heavily regulated quality and cost programs. In fact, that was one of the criteria CMS used to select the group of 51 Direct Contracting Entity finalists.

  • Experience with Risk-Based Programs
  • Organizational Structure
  • Leadership
  • Data Capacity
  • Clinical Care
  • Patient Centeredness/Engagement


All of these needed to be in place to even be considered for the program.


CMS breaks down additional program goals into four distinct categories:


  1. Transform risk-sharing arrangements in Medicare FFS by offering both capitated and partially capitated population-based payments that move away from traditional FFS.


  1. Broaden participation in CMS Innovation Center models by allowing model participation by organizations new to Medicare FFS, such as physician-managed organizations that currently operate exclusively in the MA program, and Medicaid MCOs that provide Medicaid benefits for full-benefit dually eligible beneficiaries.


  1. Empower beneficiaries to engage in their care delivery through voluntary alignment and potential benefit enhancements.


  1. Reduce provider burden to meet health care needs effectively, through for example, a smaller set of core quality measures and beneficiary engagement incentives.


Like all government-sponsored programs, Direct Contracting has a lot of moving parts. After I read all the specs, reviewed the financial methodology, and attended most of the webinars, I was reminded of how labor-intensive this is for admin and care management staff. But reducing provider burden is a worthwhile effort that allows them to focus 100% on patient care. I hope this program does provide some relief to clinicians. It couldn’t come a moment too soon. U.S. providers and clinicians are completely burnt out.


Now, if you are in administration, and are tasked with running and operating these initiatives, . CMS requires technical specifications related to infrastructure, reporting, analytics, staffing, workflows, and patient experience. It means a significant investment in time, money, and resources.


The good news is that the program is just a continuation of the Next Gen ACO model and has many of the same requirements that Medicare Advantage plans have been pushing out to providers for years.

  • Quality
  • Risk Adjustment
  • Patient Experience
  • Data Liquidity
  • Medical Management


I am confident that the first group of 51 to participate in the demonstration is poised for success.


I am also always eager to see what additional innovations, strategies, and partnerships emerge as these demonstrations evolve.


Here are some of the things I will be keeping my eye on:


How will remote patient monitoring and telehealth impact the total cost of care for these members, and will the beneficiaries be satisfied with the world of virtual care?

Remember, beneficiary choice and enrollment are critical to the program. If they are unhappy, they can leave, and with them goes any admin expense and revenue from risk adjustment.


What best-practices and partnerships will be developed in the home health care space?

Transitions of care is a huge cost driver and can impact quality scores drastically. Companies like CareLinx are aligning with DCEs to deliver skilled and non-skilled providers to beneficiaries’ homes post discharge. Bundle that effort with the invaluable services that address Social Determinants of Health (SDOH) and Activities of Daily Living (ADLs), and you will really start to see costs plumet, quality go up, and beneficiary experience skyrocket.

We are seeing coalitions like Moving Health Home form to advocate for payment reform, knowing that care at home will save the system money and improve quality of life for patients. This is a sector to really keep an eye on.


Care Coordination.

Clinical workflow orchestration and care management are being held captive by the expensive legacy EHRs and CRM tools. Providers have spent small fortunes on this technology, and they are still toggling from screen to screen and tracking patient progress across a multidisciplinary care team in Excel or Access. These tools are not creating efficiencies within care teams, and they have so many bells and whistles that do more tooting and jingling than creating a streamlined workflow that plots out a clear pathway for each member of the care team.

Companies like RoundingWell are cracking the code, giving clinicians what they need, when they need it, and are not breaking the bank. It will be interesting to see what solutions will be touted as having an impact on reducing admin burden and cost. Do not forget that data integration is still a problem… data is big, and it’s still everywhere!


Risk Adjustment.

My old friend – the mechanism to fund these programs and the only way to accurately state the severity of illness for the patient panel. The premise is still the same, but the timing and process are a bit different. The risk adjustment function needs to be performed concurrently, meaning after the encounter, but before the claim is dropped and submitted. This is not a huge undertaking, but it does take considerable oversight and a shift in mindset.

I’m sure the DCEs are being bombarded with calls from Risk Adjustment Vendors, but I am more interested in seeing how this will all play out from a Quality Assurance and Auditing perspective.

The DOJ and OIG are being more aggressive, and providers have walked away unscathed as the Health Plans pay the price. My hope is that when these DCEs pick their Risk Adjustment partners, they are building in tight SLAs for quality, accuracy, and completeness. Nobody looks good in an orange jumpsuit.


Like I said earlier, these are not novel concepts or programs, but what will spin out from them will be. Good luck to all the first 51, your success means that we are delivering better, more affordable care to the people that need it the most – our Seniors and those with complex chronic conditions.


Daniel Weinrieb

EVP, Government Programs