The Centers for Medicare and Medicaid Services (CMS) announced a suggested voluntary financing plan aimed at expanding care across entire geographic areas, in late 2020. The Geographical Direct Contracting Model is a test to determine whether direct contracting organizations can maximize the productivity of recipients and minimize costs. Providers can enter into value-based care payment plans. The theory is based on the CMS Direct Contracting paradigm and its implementation may happen in as many as 15 sectors, including potentially Miami.

The model will enable providers to work in a regional area and take advantage of a beneficiary’s established provider relationships and create a care management method that meets the local needs of the region. For initial Medicare beneficiaries in their region, model participants would coordinate healthcare and clinical administration, which may include patient management services, telemedicine, and encouragement for recipients to recognize which providers have a cost-effective history of producing successful results. Suppliers may then plan to create a network of favored suppliers to proceed with alternative payment arrangements.

There will be two mutual payment schemes for participating providers: total capitation and restricted capitation. With total capitation, providers can select a monthly capitalized rate proportional to the estimated decrease in fee-for-service cost and are responsible for all downstream payments to all providers. Based on restricted capitation, providers will earn a recurring credit equal to the reduced fee-for-service billings of no more than 50 percent.

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