CMS Extends Deadline for Direct Contracting Letters of Intent

The Center for Medicare and Medicaid Innovation (CMMI) will accept Letters of Intent from hospices and other providers that seek to participate in the professional or global Primary Care First Direct Contracting models until July 6. 

The direct contracting options include three voluntary payment models that are designed to help the U.S. Centers for Medicare & Medicaid Services (CMS) and health care providers reduce the cost of care and improve quality within Medicare fee-for-service programs. The three models include the professional, global and geographic options. The models adapt and integrate concepts from other programs such as Accountable Care Organizations, the Medicare Shared Savings Program, and Medicare Advantage, as well as strategies used in the private sector.

“The payment model options available under direct contracting seek to reduce program expenditures and improve quality of care and health outcomes for Medicare beneficiaries through alignment of financial incentives and an emphasis on beneficiary choice and care delivery while maintaining access to care for beneficiaries, including patients with complex, chronic conditions and seriously ill populations,” according to CMS. “Specifically, to help ensure that care quality is improved and beneficiary choice and access are protected, CMS will tie a meaningful percentage of the benchmark to performance on quality of care, while also monitoring to ensure that beneficiaries’ access to care is not adversely affected as a result of the model.”


The direct contracting program is associated with the agency’s Primary Care First Initiative, which also consists of a general payment option and a Serious Illness Population (SIP) option. All of these programs were slated to launch Jan. 1, 2021, but CMS has pushed back the SIP and direct contracting implementation dates to April 1 of that year.

Under direct contracting professional model, providers would accept the risk for 50% of shared savings or losses for all Medicare Part A or Part B services for patients that fit the Primary Care First eligibility requirements. Organizations working in this model would receive a risk-adjusted monthly payment for primary care services equivalent to 7% of the total cost of care.

Within the global model, providers would also bear 100% of the risk associated with eligible patients. Contracted agencies would have to choose between a Total Care Capitation option or a Primary Care Capitation option. Similar to the Professional direct contracting option, this would be a capitated, risk-adjusted monthly payment for enhanced primary care services equal to 7% of the total cost of care.


CMMI at first indicated that only large practices of more than 5,000 patients were eligible to participate in these models. However, CMMI later developed a pathway in the first year for smaller organizations with a threshold of 250 patients. This is designed to address a high-needs population, which the agency defines as patients with a hierarchical condition category (HCC) score greater than 3, or a lower HCC score with multiple unplanned hospital admissions and demonstrated frailty or disability.

Health care organizations would assume 50% risk or 100% total risk for these patients.

“The critical feature of [direct contracting models] is the ability for a [direct contracting entity (DCE)] to receive stable monthly payments directly from CMS, which provides a DCE with improved cash flow and allows them to control funds being passed on to providers,” said Corey Rosenberg, direct contracting model co-lead at CMMI, in a recent CMS conference call. “The DCE can make investments necessary to improve the care provided to their beneficiaries. Second, they can develop tailored value-based arrangements directly with the downstream providers that provide the right incentives for their providers to deliver high-quality, low-cost care to beneficiaries.”