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Direct Contracting Participation Agreement: Everything You Need to Know

As healthcare evolves, so do the various models of care delivery. One such model that has gained traction in recent years is Direct Contracting, an initiative of the Centers for Medicare & Medicaid Services (CMS). Direct Contracting is a value-based care program that aims to enhance healthcare quality while reducing costs for Medicare beneficiaries. In this article, we`ll delve into the Direct Contracting Participation Agreement, what it is, and what it means for healthcare providers.

What is the Direct Contracting Participation Agreement?

The Direct Contracting Participation Agreement is a contract between the CMS and healthcare providers, in which the providers agree to participate in the Direct Contracting model. The agreement sets out the terms and conditions of participation and outlines the responsibilities of both parties. The agreement is a critical component of the Direct Contracting model, as it ensures that providers are aware of the expectations and requirements of participation.

Who is Eligible to Participate in Direct Contracting?

Direct Contracting is open to a broad range of healthcare providers, including accountable care organizations (ACOs), physician group practices, and other healthcare entities. There are three different participation options available under Direct Contracting:

1. Professional

2. Global

3. Geographic

The Professional option is designed for healthcare providers who want to participate in a limited-risk model. The Global option is for providers who are comfortable with taking on more risk in exchange for higher rewards. Finally, the Geographic option is for providers who want to focus on a specific geographic area.

What are the Key Provisions of the Direct Contracting Participation Agreement?

The Direct Contracting Participation Agreement covers a wide range of issues, including financial arrangements, quality measures, and compliance requirements. Here are some of the critical provisions of the agreement:

1. Payment: The agreement outlines the payment methodology, including the amount and timing of payments.

2. Quality Measures: The agreement establishes quality metrics and performance standards that providers must meet to receive payment.

3. Risk Adjustment: The agreement details the risk adjustment mechanism used to account for differences in patient health status.

4. Consumer Protections: The agreement outlines consumer protections that healthcare providers must follow, such as informing patients of their rights and ensuring that patients can access care from other providers.

5. Compliance: The agreement sets out the compliance requirements that providers must meet, such as ensuring that they are using accurate billing codes and complying with all federal and state regulations.


The Direct Contracting Participation Agreement is a crucial component of the Direct Contracting model, as it ensures that healthcare providers understand their responsibilities and obligations. By participating in Direct Contracting, healthcare providers can improve patient outcomes, reduce costs, and enhance the overall quality of care. As healthcare continues to evolve, Direct Contracting offers a promising model for delivering high-quality, cost-effective care to Medicare beneficiaries.