Medicare's Direct Provider Contracting: To Primary Care and Beyond

Direct provider contracting (DPC) is coming to Medicare. 

Under a new announcement about reforming health care payment and delivery, the Centers for Medicare and Medicaid Services (CMS) has announced forthcoming DPC models as part of the effort to “deliver value-based transformation in primary care.” In particular, the agency seeks to implement models that enable it to directly contract with providers and suppliers and hold them accountable for the cost and quality of care of defined patient populations. Direct contracting shares and extends some features of existing primary care payment reforms, such as an emphasis on financial accountability over outcomes. However, DPC differs from existing primary care payment models primarily by allowing Medicare to contract with providers for a population of beneficiaries’ entire health care spending via global capitated payments. This incorporates approaches from Medicare Advantage (through which Medicare contracts with health plans for beneficiaries’ entire health care spending), while adding flexibility and emphasis on beneficiary choice. 

As more detail and information emerge, it is important for policy makers, clinicians, and health care organizations to recognize that, although relevant for primary care services, new DPC programs based on capitated population-based payment are not solely primary care models.