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Geographic direct-contracting model (GEO) is the latest CMS’ Center for Medicare and Medicaid Innovation (CMMI) model which allows Direct Contracting Entities to accept full financial risk for all traditional Medicare enrollees in their region.

“This model allows participating entities to build integrated relationships with healthcare providers and invest in population health in a region to better coordinate care, improve quality and lower the cost of care for Medicare beneficiaries in a community,” said CMS Administrator Seema Verma.

Under the model, healthcare providers which CMS calls “direct contracting entities,” or DCEs will competitively bid to manage 100% of the Medicare Part A and Part B costs for a certain number of Medicare beneficiaries within a geographic region, starting at a minimum of 30,000 enrollees.

“We anticipate interest from organizations that have significant experience taking risk in value-based care models including sophisticated Accountable Care Organizations (ACOs), health systems, health care provider groups and health plans,” CMS said about the new model. “We also anticipate some applications might include innovative partnerships between health plans and health care providers.” Providers who join one of the DCEs will still be able to stay in any other value-based care programs they’re already in, including ACOs and Medicare Shared Savings Plans.


Direct contracting is the next accountable care model from the CMS Innovation Center. To date, Next Generation has been the ACO of highest risk and reward.

Direct contracting builds upon lessons learned from the Medicare Shared Savings Program and the Next Generation ACO model. It also leverages innovative approaches from Medicare Advantage and private sector risk-sharing arrangements, CMS said. Under the model, providers will work in a specific region and leverage a beneficiary’s existing provider relationships to develop a care delivery solution that would take into account a region’s local needs.


The model will enlist direct contracting entities (DCEs), which can include accountable care organizations, health systems, and provider groups or health plans, to take responsibility for the total cost of care for all Medicare fee-for-service beneficiaries in their region.

Providers signing up with a DCE as a “GEO Preferred Provider” may be paid in a variety of ways, CMS said. “GEO Preferred Providers can be paid capitation, sub-capitation, quality bonuses, shared savings, or in any other arrangement agreed to between the DCE and Geo Preferred Provider.” In addition, “Geo Preferred Providers may qualify for an Alternative Payment Model (APM) Incentive Payment under the Quality Payment Program.” Providers may sign up with more than one DCE in their region.

The model has three types of participants: Standard, which is composed of organizations that generally have experience serving Medicare Fee-for-Service beneficiaries and may have previously participated in Next Generation, Pioneer or MSSP; new entrants; and high needs population direct contracting entities.

  • Risk-sharing arrangement of 50% savings and losses and has primary care capitation, a capitated, risk-adjusted monthly payment for enhanced primary care services.
  • The global option offers the highest risk-sharing arrangement of 100% savings and losses and provides two payment options: the primary care capitation of the first option or total care capitation, which is capitated, risk-adjusted monthly payment for all services provided.

Providers could decide to create a network of preferred providers that could enter into alternative payment arrangements such as prospective capitation and similar value-based models

“Specifically, model participants will coordinate care and clinical management for beneficiaries in original Medicare in their region,” the agency said. “This coordination may include care management services, telemedicine, as well as help for beneficiaries to understand which providers have a history of delivering better results and lower cost over the long-term.”

Direct contracting agencies will have the option to offer enhanced Medicare benefits, such as:

  • Home visits for beneficiaries following a discharge from an inpatient hospital, psychiatric facility, inpatient rehabilitation facility, long-term care hospital, or skilled nursing facility;
  • Home visits for care management; and
  • Increased access to home healthcare by waiving the homebound requirements for access to home health services in Medicare.
  • DCE’s can offer to waive Medicare’s three-day skilled-nursing facility rule. There is also the option to lower out-of-pocket costs for enrollees by lowering Part A or B copays or offering subsidies for beneficiaries’ Part B premiums.


GEO has a strong focus on social determinants of health and will offer DCEs several for beneficiary engagement. The model includes new tools that will assist beneficiaries in finding high-value care by offering things such as vouchers for over-the-counter medications, healthcare-related transportation, meal programs, chronic disease management programs, wellness programs, and vision and dental services. Participants can also provide items and services to help enrollees find non-medical assistance for home improvements such as home air-filtering systems and railing installation.

“The direct care entities are at risk, and so to perform well they need to keep patients healthy and they need to keep them out of the hospital,” Verma said on the call. “So we’re giving them the flexibility to provide additional benefits that may help keep these people healthy.” (See related article: 2021 Healthcare Outcomes Go Statewide and Regional).


Beneficiaries in areas covered by DCEs will have all the same benefits as other Medicare enrollees, but they also may have some additional benefits, such as lower out-of-pocket cost-sharing and access to enhanced home care services. Beneficiaries won’t be able to opt-out of the new model, but they will have the option to select a DCE in their region at the start of each performance period, as well as to change DCEs either quarterly or annually. (If they don’t select a DCE, they will be randomly assigned to one.) CMS officials said that they “expect beneficiaries will have the option of at least one.

Beneficiaries in a Medicaid managed care plan or ACO that is a DCE in their area will be matched with that entity. If claims data show a beneficiary to be receiving care from a preferred provider, they will be aligned with that provider’s DCE. Finally, any remaining beneficiaries will be randomly assigned. Members can change their DCE but not opt entirely out of the model. They do, however, maintain all their fee-for-service coverage rights.

The Geographic Direct Contracting Model will have two 3-year performance periods. The first performance period will take applications in 2021 and have a performance period from January 1, 2022, through December 31, 2024. The second performance period will take applications in 2024 and have a performance period from January 1, 2025, through December 31, 2027.

View the 51 direct contracting entities in 39 states as well as in the District of Columbia and Puerto Rico at:

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