What if your best route to viability was the high-risk path you feared the most, because that failure might destroy you?
That’s the question Accountable Care Organizations (ACOs) have been asking this week—whether to participate in Medicare’s new Direct Contracting (DC) initiative. With a shift in payments from Fee for Service (paid per-provider service), to Global Capitation (paid per-beneficiary), DC completely changes the incentives for the health care system.
Whether Direct Contracting is a boon or a bust to ACOs depends on their ability to control the costs of patient care long-term—and whether they have the leverage to do so. How ACOs answered that question this week will be interesting to evaluate, since applications for Direct Contracting were due February 25. But one certainty is that Direct Contracting and its payment mechanisms of Global and Partial Capitation, now introduced by CMS, won’t be going away anytime soon.