In the case of health care services for subscribers, more options is usually not a bad thing unless providers are sacrificing quality care. Medicare’s most recent initiative, put into place January 1, 2021, focuses on modifying Direct Contracting models to emphasize positive outcomes. This shift places less focus on services rendered by providers at any given time. By making this trailblazing move toward value-based care, the Centers for Medicare and Medicaid Services hope to set a trend that state Medicaid programs will soon follow.

What is Direct Contracting and what does it mean for insurance networks?

The Direct Contracting Model is a voluntary program set forth to elicit greater participation from large health care organizations. Models that focus on Direct Contracting aim to give more autonomy to subscribers as they make decisions about their health and the way they receive medical services. Medicare Direct Contracting offers more than one traditional payment option for services provided under Part A and Part B, which departs from the single method used in traditional Fee-for-Service. Current Medicare payment methods have caused a great deal of fragmentation so this new model will remedy some of that while encouraging expanded partnerships and innovation between providers and the health plans they accept.

More avenues for payment also means clinicians will receive separate reimbursement for each service they provide. This allows insurance companies to view each service for the value it conveys as opposed to its associated dollar amount. At the end of the day, the main goals of Medicare Direct Contracting also help health care professionals better engage in the work they do and ultimately provide more effective care. This may even indirectly retain providers across health care disciplines, which is much-needed in professions such as primary care and behavioral health.

By adding more Direct Contracting services, the Centers for Medicare and Medicaid are also projecting a decrease in costs and overall utilization with greater attention given to continuous management of chronic and medically complex conditions. To maintain a focus on preventive care and its cost-saving impact, Direct Contracting providers will also be responsible for hitting benchmarks to complete routine exams, such as blood pressure checks and cancer screenings. Added benefits such as low-cost prescription vouchers and medical transportation will also help patients who are at risk for certain health conditions due to a lower socioeconomic status.

As a result of these changes, Direct Contracting is expected to appeal to a wide range of health organizations, including physician practices that were not previously a part of the program. This is expected to be a positive trend that will help insurance companies create more robust networks with enough participating providers to support the needs of all their subscribers.