Direct Contracting Model Strategies that Drive Innovative Healthcare

2021 Alliance sponsor feature article courtesy of Pearl Health

It’s no secret that the U.S. healthcare system could benefit from a healthy dose of creativity and innovation. Over the past several decades, healthcare costs have been rising at an unsustainable rate, while patient outcomes have been less than ideal. Efforts to create a more value-based healthcare system, which have featured an especially concerted effort over the last decade, have thus far not succeeded. In recognition of this reality, the Centers for Medicare/Medicaid Services (CMS) has recently introduced its Direct Contracting model. Specifically designed to encourage innovative healthcare ideas, Direct Contracting will hopefully lead us toward a more value-based healthcare system.

Many healthcare organizations and providers believe the Direct Contracting model has tremendous potential. While the model is currently being used only for Medicare beneficiaries, many hope that its central themes–provider capitation, quality measures with minimal administrative overhead for practices, and global risk sharing–may soon be adopted by private payers and providers furnishing care in the commercial sector. Such proliferation will depend on the model’s initial success in managing costs of the Medicare population and how well providers adapt. If the model works as planned, it will incentivize innovative healthcare strategies, leading to better outcomes and lower costs. With this in mind, it’s essential that healthcare professionals understand ways to innovate in this environment.

Innovative Healthcare Strategy #1 – Enhance Workflow Efficiencies

It is well known that many healthcare systems lack efficient operational workflows. This is especially true in coordinating care among different care settings in and out of various facilities. Therefore, innovative healthcare ideas are needed to streamline many of these more complex care activities. The Direct Contracting model accomplishes this by linking rewards to value-based outcomes. As a result, all stakeholders are motivated to develop more efficient and coordinated processes of care. Healthcare organizations can leverage the Direct Contracting model’s investment capital construct (i.e. the ‘enhanced cap’) to pursue better workflow efficiencies. Likewise, they can encourage the use of standardized workflows that are patient-centric in an effort to reduce care variations. Similar to Lean Six Sigma approaches, these efforts reduce waste while improving the capacity for predictable and reproducible results. This is an area of innovation needed for many healthcare systems today.

Innovative Healthcare Strategy #2 – Advance Digital Integrations

Advancing and streamlining digital integrations across the healthcare system may lead to more efficient healthcare delivery. Interoperability, the ability of different digital healthcare platforms to communicate, has been a barrier for efficient and effective healthcare. Healthcare systems can use the Direct Contracting model to encourage improved connectivity and interoperability by incentivizing such investment through outcomes alignment. This inherently reduces waste by limiting duplication services and increases access to information for better decision-making. Such connectivity can also improve the insight of analytics efforts, providing healthcare systems with better data to drive future changes. By investing in these types of activities, organizations can better thrive under the Direct Contracting model and reap the rewards.

Innovative Healthcare Strategy #3 – Effective Provider Incentives

Under CMS’s Direct Contracting model, Direct Contracting Entities (DCEs) have the ability to structure bespoke risk contracts with the providers that they engage. A DCE may choose different risk tracks, taking on 50% or 100% of the risk and shared savings benefits. While past ACO programs allowed for similar risk-sharing, DCEs are afforded greater freedom to create more targeted risk-based and capitated contracts with providers that incentivize them to develop innovative healthcare solutions. This is one of the major advantages of the Direct Contracting model that did not exist with prior CMS approaches to value-based healthcare.

Innovative Healthcare Strategy #4 – Engage and Involve Patients

The Direct Contracting model places the burden to develop innovative healthcare solutions on DCEs and member providers. Yet the involvement of patients is critical to the success of efforts to achieve performance improvement in value-based care. By empowering and incentivizing patients to engage in this manner, DCEs can make better, more informed choices about which strategies they will invest in and patients can contribute to self-care and self-monitoring. DCEs and providers should therefore invest resources in educating and training patients in these areas. In doing so, they are better able to utilize patient resources that reduce costs and lead to better results. These types of activities also broaden care coordination across additional care settings that include the patient’s home environments.

Embracing a Culture of Innovation in Healthcare

Each of the above strategies can help organizations and providers realize more innovative healthcare practices. The Direct Contracting model simply serves as a framework by which these efforts can be used. Over time, however, DCEs and providers alike can embrace a culture of value-based innovation to achieve healthcare goals.

1. Adams, K. (2021). 6 big ideas in healthcare innovation. Becker Hospital Review. Retrieved from

2. Ibid.

3. Ibid.

4. Ibid.

Efficient and Effective Pathways to Value-based Care

By Dr. Kenneth Persaud

2021 Alliance sponsor feature article courtesy of Sharecare

Partnering to Create an Expandable Framework
for Value-based Care Success


White-Wilson Medical Center Fort Walton Beach, Florida employs 80 physicians and advanced practice clinicians and had a goal to move to value-based care contracts with payors to improve care and reimbursement.

About White-Wison:

Founded in 1946, White-Wilson Medical Center occupies a unique position on Florida’s Emerald Coast as the largest, multi-specialty, outpatient physician group in the region. With locations in Fort Walton Beach, Crestview, Destin, Navarre, and Niceville, White-Wilson has the community’s largest team of physicians, specializing in more than 20 areas of medicine. In addition to primary and specialty care, White-Wilson offers immediate care services for any urgent care needs at each of its clinics.

The amount we learned from Sharecare is incredible. I can’t say enough about how much they taught us about the value-based care business, the market, and how to apply that learning going forward. Sharecare has been crucial to that process.

Mark Wiacek, Chief Operating Officer, White-Wilson Medical Center

The challenge:

Decreasing reimbursements from the fee-for-service model was limiting growth in revenue and patient outcomes and satisfaction. It was critical to the practice to remain independently owned in a competitive market. Value-based care contracts with Medicare and other payers offered a path to greater growth and better patient care, but the White-Wilson team had no experience in this area and needed expert resources to help them drive these programs. They found that just hiring people didn’t work – they needed processes and technologies to support this transition to value-based care.

Creating an ACO involves putting a framework, including a governing board, into place to provide the coordinated, high-quality, efficient, and effective care that is the goal of the ACO program. The program also offers benefits to providers: when an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program. The program is not without risk, however, as ACOs that do not deliver effective care can lose money. Sharecare engaged as a full partner in this case, offering a contract that shared both risk and reward.

In addition, the coordinated care that is at the core of an ACO program increases emphasis on patient services that positively impact outcomes, such as wellness visits and transition care upon hospital release. These services also offer expanded opportunities for reimbursement and revenue growth.

Sharecare’s team offered expertise, guidance, processes, and technologies to support White-Wilson in their transition to value-based care. In 2016, White-Wilson started their journey by participating in the Medicare merit-based incentive payment system (MIPS), with Sharecare offering technologies that augmented the White-Wilson electronic health record (EHR) systems to produce the data required for value-based care. By 2017, the team had the data benchmarks they needed to create the White-Wilson ACO. In 2018, White-Wilson added risk-adjustment audit services to their ACO contract with Sharecare. By 2019, White-Wilson had won a value-based service contract with a major payor in the market.

Consultative collaboration was the key to success.

The augmentation of the White-Wilson EHR system with Sharecare technology bridged deficiencies in the EHR system to enable the value-based care reporting required by the MIPS program while putting off a costly upgrade to the EHR system that would otherwise have been necessary. The collaboration ensured that White-Wilson’s MIPS program stayed out of penalty and was awarded a “Top Performer” bonus.

The White-Wilson ACO, now serving around 100,000 patients, demonstrated quality improvement scores in the 94th percentile in each year, cost reductions of more than $3M over three years, and improved patient-satisfaction scores through the program along with over $6M in revenue on value-based payments with other payors. White-Wilson was able to put the necessary systems into place to ensure that they avoided penalties, and in those three years, 2017-2019, they saved between $700,000-$1,400,000 a year with Medicare.

White-Wilson’s ACO generated substantial revenue gains by doubling annual wellness visits and post hospitalization transition visits over the same period, with 2021 already on track to continue this trend. Most importantly, White-Wilson’s patients have received better, more coordinated, and effective care through these programs.

White-Wilson was able to develop payor-agonistic strategies and has already expanded the framework to private-payor value-based contracts. With this framework, they found that they could build an organization to manage a larger population and generate higher revenue without adding any full-time employees. In 2019, White-Wilson landed a sizeable multi-year agreement that will bring significant revenue to the practice. The momentum is built in the direction of more of these kinds of private-payor contracts in the future.

White-Wilson has adopted other Sharecare solutions, including diabetes management programs to optimize care, close gaps, and maximize revenue for their more than 24,000 eligible diabetes patients. The practice is also an early adopter of the Sharecare telehealth platform, which allows them to address patients’ important healthcare needs safely and conveniently remotely.

In the future, White Wilson is planning to expand to commercial private-payor value-based contracts and continue the partnership with Sharecare to offer more services to patients and expand revenue in key markets.

About Sharecare:

Sharecare value-based care enables payors to work with providers to offer the right care at the right time, improve population outcomes and the member experience while reducing per capita costs for healthcare. Sharecare is an all-inclusive value-based payments platform to help achieve better and more sustainable financial outcomes.

Sharecare offers the strength of many trusted individual solutions, with options to bundle each component and create unified actionable metrics that drive intelligent decision support for the entire healthcare ecosystem.

All together, better.

Want to know more about how to duplicate White-Wilson’s success? Contact us!

New APM flexibilities for COVID-19

The Centers for Medicare & Medicaid Services (CMS) announced new flexibilities to current and future Innovation Center alternative payment models (APMs) to address the public health emergency, as detailed in a new chart. The agency previously made changes to the Medicare Shared Savings Program, summarized in the MGMA COVID-19 Action Center, but did not address other APM policies until this announcement.

Adjustments include:

  • Extending the Next Generation accountable care organization (ACO) model through December 2021 and reducing 2020 downside risk.
  • Delaying the start of new Direct Contracting and Kidney Care Choices models until April 1, 2021, and creating a new application cycle for 2022. The new Primary Care First model will still begin Jan. 1, 2021, but the Serious Illness component is delayed until April 1.
  • Allowing participants in the Bundled Payments for Care Improvement (BPCI) model the option to eliminate upside and downside risk for 2020.
  • Additional changes to these and other models are further detailed in the chart.

MGMA advocated for CMS to extend the Next Gen ACO program as it was previously set to end this year and also called on the agency to make adjustments to APM policies in response to COVID-19. We are pleased to see that CMS heeded our advice and is in the process of evaluating individual model changes.

MGMA advocates for additional relief for physician practices, ACOs

Last week, Democratic leadership in the U.S. House of Representatives introduced the ‘‘Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act,” which includes several provisions that directly pertain to medical practices. The legislation would make further amendments to the PPP, Medicare’s Advance Payment Program, and the Provider Relief Fund. While this bill is not expected to pass due to lack of bipartisan support, MGMA offered several key recommendations for consideration as Congress works to come to a bipartisan agreement.

Additionally, MGMA and other industry-leading associations have urged the Centers for Medicare & Medicaid Services (CMS) to provide flexibility for practices participating in a Medicare accountable care organization (ACO) and to protect them from potentially harmful losses created by the COVID-19 pandemic. Specifically, MGMA called on CMS to:

  • Adopt a policy to give ACOs an option to be protected from losses in exchange for a reduced shared savings rate, no less than 40%;
  • Extend the current June 1 Medicare Shared Savings Program (MSSP) deadline to voluntarily terminate to avoid financial losses to no earlier than Oct. 31;
  • Reverse its decision to cancel the 2021 MSSP application cycle; and

Pay ACO shared savings payments and advanced alternative payment model bonuses as soon as possible

Regulatory Alert: CMS Increases Telehealth Payments and Makes ACO Changes

Originally published on April 30, 2020 by MGMA
Reprinted with permission from MGMA

Today, the Centers for Medicare & Medicaid Services (CMS) issued another round of regulatory waivers through an interim final rule intended to expand care to Medicare beneficiaries and provide more flexibilities to the providers that treat them. The changes outlined below will be effective for the duration of the COVID-19 public health emergency (PHE).

Changes to telehealth policy:

  • Following MGMA advocacy, CMS is increasing payment for audio-only telephone E/M services (CPT codes 99441-99443) such that they are paid at the same rate as similar office and outpatient E/M visits, resulting in increased payments from $14-$41 to $46-$110. CMS believes that the resources required to furnish these services during the PHE are better captured by RVUs associated with level 2-4 established office/outpatient E/M visits. CMS is not increasing payment for CPT codes 98966-98968, which are intended for practitioners that cannot separately bill for E/M. This policy is retroactive to March 1, 2020.
  • For telehealth services other than CPT codes 99441-99443 and 98966-98968 (now added to the list of covered telehealth services), Medicare continues to require modalities that have both audio and video capabilities.
  • CMS is forgoing its typical rulemaking process to add new services to the list of Medicare services that may be furnished via telehealth. Instead, CMS will add new telehealth services on a sub-regulatory basis to speed up the process of adding codes to the list.

Changes to Medicare Shared Savings Program (MSSP):

  • There will be no application cycle for a Jan. 1, 2021 start date, and ACOs in the last performance year of their current agreement period (mainly Track 1 ACOs and Track 1+ Model ACOs) will be allowed to voluntarily extend their agreement period by an additional performance year in 2021.
  • ACOs participating in the BASIC track glide path will be permitted to maintain their current risk level under the BASIC track for PY 2021 and freeze progression to higher risk.
  • CMS is removing all Part A and B payment amounts for episodes of care involving the treatment of COVID-19 for the purposes of determining benchmark year and performance year expenditures.
  • The list of primary care services used for beneficiary attribution will be expanded to include additional telemedicine services.

MGMA Government Affairs will continue to inform medical groups as the Administration releases additional waivers and further guidance on COVID-19 related regulatory changes. CMS’ press release on the changes can be found here and a fact sheet on MSSP changes can be found here.

March 17th Webinar: Community Collaboration and Addressing Social Determinants in the Evolving World of Value Based Care


Community Collaboration and Addressing Social Determinants in the Evolving World of Value Based Care

March 17 | 12:00 PM – 1:00 PM
Sponsored by Curi – a Medical Mutual Co.

Join us on March 17th from 12:00 PM – 1:00 PM as Dr. Brian Klausner presents “Community Collaboration and Addressing Social Determinants in the Evolving World of Value Based Care.”

Our Speaker

klausner1aDr. Brian Klausner
Physician, WakeMed Physician Practices
Medical Director, WakeMed Community Case Management
Chief Medical Officer, WakeMed Key Community Care
At WakeMed Health & Hospitals in Raleigh, N.C., Dr. Brian Klausner directs many of the hospital’s population health efforts – advocating for patients and vulnerable populations in the community and driving quality improvement.

In addition to his work as a full-time WakeMed primary care physician, Dr. Klausner serves as medical director for WakeMed Community Case Management, a program that is improving access and health outcomes for uninsured and homeless patient populations.

Dr. Klausner is also chief medical officer of WakeMed Key Community Care (WKCC), one of the top-performing accountable care organizations (ACOs) in the country, providing patients with high quality care and coordinated services for the best value. He serves as the co-chair for Wake County’s Family Faces task force. He was recognized as a 2017 Health Care Hero by the Triangle Business Journal and received the 2019 T. Reginald Harris Award, given each year by the North Carolina Medical Society to a physician with outstanding achievements in health care quality and service to the medical community.

He earned his undergraduate degree from the University of Notre Dame, his medical degree from Georgetown University School of Medicine and completed his internal medicine residency at University of Chicago Hospitals.


This webinar is complimentary for NCMGMA members and $50 for non-members. Space is limited so make sure to register early! After you register, you will receive an emailed confirmation with webinar and phone-in instructions.

Continuing education credit may be granted through your professional organization (MGMA, PAHCOM, AHIMA, etc.). Please self-submit for these organizations.

New Users to the NCMGMA Website
If you are not a member of the North Carolina Medical Group Management Association (NCMGMA) or have not previously registered for an online course, you will be asked to create a profile when you access the online registration link. Please follow the instructions for creating a new user profile and contact us at if you have any questions or concerns.


For questions or more information please contact the NCMGMA offices at


NCMGMA-NCMSF August 15th Webinar: Transformation to Value-Based Payments Under the ACO Model

NCMGMA-NCMS Webinar Series

Transformation to Value-Based Payments Under the ACO Model

August 15, 2017 | 12:00 PM – 1:00 PM


As the landscape of health care changes with the emphasis shifting onto the patient and improving overall community health, preparing for value-based payment models has become a priority for health care providers across the state of North Carolina. Lynn Barr, MPH, CEO of Caravan Health and Chief Transformation Officer of the National Rural Accountable Care Consortium (NRACC), will present on how to move your practice to the new reality of managing wellness and delivering value through operational improvements, staff development, community engagement, regional collaboration, and the effective utilization of data under the Accountable Care Organization model to improve MACRA performance.


Lynn Barr, MPH
CEO, Caravan Health and Chief Transformation Officer, The National Rural Accountable Care Consortium (NRACC)
Lynn Barr is a recognized leader in the movement to transform and improve our nation’s health care systems. Lynn organized NRACC to overcome barriers for rural health providers so they could participate in innovative payment models under health care reform. Ms. Barr has lead the development and execution of nationwide programs that bring better care to patients and help health care providers’ achieve financial success. She is a frequent collaborator with government and national organizations looking to improve our health care systems.


This webinar is complimentary but space is limited so make sure to register early! After you register, you will receive an emailed confirmation with webinar and phone-in instructions.

Click here to register

Continuing education credit may be granted through your professional organization (MGMA, PAHCOM, AHIMA, etc.). Please self-submit for these organizations.


For questions or more information please contact the NC Medical Society offices at

Washington Report from MGMA

The following information was originally published in the February 3, 2016 issue of MGMA’s Washington Connection
We are reprinting with permission from MGMA

Why all practices should submit a hardship exception to avoid the 2017 Meaningful Use penalty
MGMA updated its member-benefit resource, Overview of the Final Requirements for Meaningful Use – 2015 through 2017, to assist members applying for the 2017 hardship exception. MGMA encourages all eligible professionals (EPs) subject to the 2017 Medicare Meaningful Use penalty to apply for the hardship exception. The Centers for Medicare & Medicaid Services (CMS) recently stated that it will broadly accept hardship exceptions due to the delayed publication of program regulations and will require no supporting documentation if the application is submitted by March 15, 2016. In addition, CMS is now permitting group practices to submit one application for all of its EPs. As a reminder, applying for the hardship exception will not prevent an EP from earning an incentive, and EPs attesting that they have met the requirements for the 2015 Meaningful Use reporting period should still apply for the hardship exception.

For more information, access the CMS hardship exception instructions and application form.

MGMA to Congress: Fix Stark Law
Last week, in response to a solicitation for comments on the Stark Law, MGMA called on the Senate Committee on Finance and the House Committee on Ways and Means to seriously consider full repeal of the law, or, at a minimum, repeal of the confusing compensation relationship provisions. The notoriously complex law impacts the ability of practices to deliver ancillary services and regulates how physicians are compensated within group practices. In the letter, the Association emphasizes the inherently confusing nature of the law and how it never accomplished its original purpose of establishing clear compliance standards for the federal Anti-Kickback Statute and creating “bright line” standards that could be generally understood, easily implemented and equitably enforced. MGMA also questions whether such stringent regulation of physician financial incentives remains relevant or necessary in today’s modern, more value-based Medicare reimbursement environment. MGMA will continue to iterate its concerns with the Stark Law to Congress and track progress closely, reporting any updates through the Washington Connection.

CMS issues proposed changes to update Shared Savings ACO cost benchmarks
Last week, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would, among other changes, modify the methodology used to measure performance in the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACOs).

In the MSSP, ACOs can share in savings earned if they meet certain cost and quality benchmarks. One of the common criticisms with the current methodology is that CMS measures an ACO’s cost performance by comparing its historical cost performance to a benchmark based on national spending trends. Under the proposed rule, CMS would instead use regional spending trends to establish the benchmark. The MSSP’s current methodology of comparing savings to the same historic baseline also makes it difficult for ACOs to continue achieving high cost savings and meet cost benchmarks over time. The proposed rule would instead base the benchmark on a percentage difference between ongoing fee-for-service spending and the ACO’s historical spending, making it easier for ACOs to meet benchmarks and achieve continued success in the program.

The MSSP is currently in its fourth program year and up to this point has yielded mixed results. While it has grown gradually in size each year to 434 participants in 2016, over one-third of ACOs in the program exited in 2015. MGMA is reviewing the proposed rule and plans to respond to CMS within the 60-day comment period.

Washington Report from MGMA

Originally published in the January 27, 2016 issue of MGMA’s Washington Connection
Reprinted with permission from MGMA

CMS modifies Meaningful Use hardship exception process
The Centers for Medicare & Medicaid Services (CMS) released an updated hardship exception application for eligible professionals (EPs) seeking to avoid a 2017 penalty associated with the 2015 EHR Incentive (Meaningful Use) Program. Consistent with MGMA advocacy, the new process permits group practices to submit a single application for all of their EPs and reduces the amount of information required. To take full advantage of the new streamlined review process established by the Patient Access and Medicare Protection Act, EPs must submit applications by March 15. However, CMS will continue to accept hardship applications on a traditional case-by-case basis until July 1. EPs are not required to register for Meaningful Use or purchase an EHR in order to apply for a hardship exception. Visit the CMS website for additional information on the hardship exception process and to access the new application form.

MGMA offers recommendations to Senate Bipartisan Chronic Care Working Group
In December, the Senate Finance Committee’s Bipartisan Chronic Care Working Group released a document containing several proposals to improve the treatment of Medicare patients suffering from chronic illnesses. In response, MGMA submitted a letter of support commending the proposed expansion of Medicare coverage for high-severity chronic care management services and use of telehealth services for accountable care organizations (ACOs). The letter also urged the Committee to encourage the Centers for Medicare & Medicaid Innovation to engage the physician stakeholder community prior to rulemaking on any mandatory or significant payment model. In addition to our own letter, MGMA joined a group of stakeholders in submitting joint ACO-specific comments to the Committee.