When it comes to healthcare payments, direct contracting (DC) is yet another structural payment mechanism. For medical billing services, the DC is between Medicare and healthcare providers for incentivizing quality care, which is also based on affordable economics for taxpayers and patients.
In comparison to other value-based care models, which reimburse healthcare providers for offering specific services, the DC works with a capitated payment system. Here, providers get monthly payments, which comply with historical care costs. Such care revolves around the concepts of primary care services for patient panels, in addition to bonus payments based on the quality of care and savings realized.
Furthermore, DC incentivizes innovation inside the primary care clinical model, which line up better with the system-level and patient goals.
The primary goals of DC include the following:
The DCEs are liable to form relationships with two types of providers or suppliers, for instance, Participant and Preferred Providers.
Ideally, there are two major differences between these relationships. First and foremost, the beneficiaries only align with participant providers and not just any preferred providers. Second, the participant providers must enter a pre-negotiated payment arrangement with DCE. While preferred providers can sometimes elect to receive the pre-negotiated payment or not.
The DCEs must consider the above mentioned differences before deciding what type of relationship to formulate with which providers.
Centers for Medicare & Medicaid Services (CMS) considers that the DCEs controlling funds with their downstream providers shall enable them to improve care delivery and coordination effectively. It can also help better manage the health needs of their aligned beneficiary populations, resulting in better outcomes and reduced costs.
The projection of payment mechanism will be paid monthly, and that too directly to the DCE. The faith here is that DCE shall invest in technological advancements, for expanding resources for VBC (value-based care), and reimburse providers via payment arrangements.
DC as a healthcare model was launched back in 2021, with a number of 53 DCEs participating. Some others who file applications have the option to defer enrollment in the program till 2022. Furthermore, CMMI is not accepting any new/additional applications for future performance years.
Many providers and other stakeholders are not happy with this announcement as they position Direct Contracting in healthcare as a promising opportunity for progressing a physician’s exposure to healthcare risk. Additionally, DC as a medium leads physicians’ independence to engage with patients in the frequencies and modalities appropriate to manage health outcomes. Furthermore, whether or not CMMI will offer future application opportunities, is yet to be seen.
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