Fact sheet

Beneficiary Engagement and Incentives Models: Shared Decision Making Model

Beneficiary Engagement and Incentives Models: Shared Decision Making Model

The Centers for Medicare & Medicaid Services (CMS) identifies strengthening beneficiary engagement as one of the agency’s goals to help transform our health care system into one that delivers better care, smarter spending, healthier people, and puts individuals at the center. Specifically, the “CMS Quality Strategy envisions health and care that is person-centered, provides incentives for the right outcomes, is sustainable, emphasizes coordinated care and shared decision making, and relies on transparency of quality and cost information.”[1]

Beneficiary engagement broadly refers to the actions and choices of individuals with regard to their health and health care, and these decisions impact cost, quality, and patient satisfaction outcomes.[2],[3] The Beneficiary Engagement and Incentives (BEI) Models -- the Shared Decision Making Model and the Direct Decision Support Model -- will test different approaches to shared decision making, acknowledging that beneficiaries make decisions regarding treatment options in a variety of ways. The Center for Medicare and Medicaid Innovation is testing the BEI Models under the authority of Section 1115A of the Social Security Act (as added by Section 3021 of the Affordable Care Act).

The Shared Decision Making Model (SDM Model) will test a specific approach to integrate a structured Four Step shared decision making process into the clinical practice of practitioners who are participating Accountable Care Organizations (ACOs). The shared decision making process is a collaboration between the beneficiary and the practitioner.


A Presidential Commission in 1982 first coined the term “shared decision making,” urging adoption of the process to improve physician-patient communication and informed consent in health care. Although it has been 30 years since the Commission urged the adoption of shared decision making, beneficiary preferences and values about medical treatment choices are still routinely left out of important discussions between practitioner and beneficiary.[4]

Shared decision making can ensure that treatment decisions, for the many medical conditions that do not have one clearly superior course of treatment, better align with beneficiaries’ preferences and values. One facet of shared decision making is the use of patient decision aids (PDAs)—tools that present information about common medical choices. A 2014 systematic review of Patient Decision Aids (PDAs) concluded that using PDAs can help patients gain knowledge; have a more accurate understanding of risks, harms, and benefits; feel less conflicted about decisions; and rate themselves as less passive and less often undecided.[5] These tools do not supplant physician-beneficiary conversations about treatment options; instead, they supplement and/or encourage it by better preparing beneficiaries to engage in those conversations.[6]

Despite the inherent value of shared decision making, and being a required component of efforts like the Medicare Shared Savings Program, the literature indicates that practitioners have found it difficult to integrate shared decision making into their routine workflows for various reasons such as overworked physicians, insufficient practitioner training, inadequate clinical information systems, lack of consistent methods to measure that shared decision making is taking place, and uncertainty as to whether, or how, to promote change and invest in the time, tools, and training required to achieve meaningful shared decision making.[7],[8],[9]

Model Details:

The SDM Model will test how to best integrate a specific structured shared decision making process into routine clinical practice. The model will directly address a number of the barriers identified in research studies in peer-reviewed scientific literature and by experts in the field of shared decision making, such as inadequate time and lack of resources to implement shared decision making in a busy clinical practice.

CMS is providing participating ACOs with financial support to invest in a structured process that it believes will reduce or keep neutral Medicare spending while maintaining or improving quality, and will also result in improvements in patient engagement and experience with care.

The SDM Model aims to integrate a specific, structured Four Step process of shared decision making into the routine clinical practice of practices of participating ACOs, resulting in more informed and engaged beneficiaries who collaborate with their practitioners to make medical decisions that align with their values and preferences.

The overall aim of the SDM Model is to have informed and engaged Medicare beneficiaries collaborate with their practitioners using a Four Step Shared Decision Making (SDM) Process, which includes: identifying SDM eligible beneficiaries, distributing the PDA to eligible beneficiaries, furnishing the SDM Service, and SDM tracking and reporting. The SDM Service must be provided by a SDM practitioner. The terms SDM Service and SDM practitioner are defined below.  

The SDM Model focuses on six preference-sensitive conditions: stable ischemic heart disease, hip osteoarthritis, knee osteoarthritis, herniated disk and spinal stenosis, clinically localized prostate cancer (cancer that is confined to the prostate gland) and benign prostate hyperplasia (BPH). A preference-sensitive condition is a medical condition for which the clinical evidence does not clearly support one treatment option, and the appropriate course of treatment depends on the values or preferences of the beneficiary regarding the benefits, harms, and scientific evidence for each treatment option.[10]

CMS plans to operate the SDM Model in an intervention group of practices participating in 50 ACOs nationwide with an equal number of comparison group ACOs. Only those ACOs participating in the Medicare Shared Savings Program or Next Generation ACO Model are eligible for selection to participate in the SDM Model. The SDM Services will be offered to Medicare FFS beneficiaries who receive services from a practitioner participating in a participating Next Generation ACO Model or Medicare Shared Savings ACO with one of the relevant preference-sensitive conditions. The SDM Model expects to engage over 150,000 Medicare beneficiaries annually through the efforts of participating ACOs.

CMS will select ACOs that are willing to commit to an initial period of two years of model participation. CMS plans to offer up to three year-by-year renewals to participating ACOs that show evidence of alignment with model goals. The initial period and all potential renewals amount to up to five years of model operations.

Quality Payment Program:

The SDM Model will be considered an Alternate Payment Model (APM); but not an Advanced APM or MIPS APM.

ACO Participation in the SDM Model will not directly impact or change the amount of risk or any other criteria pertaining to Advanced or MIPS APMs, and therefore will not affect clinicians’ eligibility for payment adjustments or incentives through the Quality Payment Program. Instead, participation in the Next Generation ACO Model or Medicare Shared Savings Program will determine their Quality Payment Program adjustments or incentives status in either MIPS or as a Qualifying APM Participant (QP) in an Advanced APM.


The SDM Model will pay participating ACOs $50 for each SDM Service furnished by its SDM practitioners, as long as all required SDM Activities are completed.

The Four Steps of the SDM Process will include:

1. Identifying SDM-eligible beneficiaries;
2. Distributing the patient decision aid to eligible beneficiaries;
3. Furnishing the SDM Service (Shared Decision Making: Discussion, Decision and Documentation); and
4. Tracking and SDM Reporting.

Step 3 is considered a SDM Service (furnished by the SDM practitioner) and Steps 1, 2, and 4 are considered SDM Activities (completed by the participating ACO, and/or SDM practice or practitioner).

SDM Model Terminology/Definitions:

The SDM Model uses the following terms, as defined below: a participating ACO, a SDM practice, a SDM practitioner.    

A participating ACO is a Next Generation ACO Model or Medicare Shared Savings Program ACO that is participating in the SDM Model.

An SDM practice is an ACO participant, including a Medicare Shared Savings Program or a Next Generation Participant, or a Next Generation Preferred Provider that is participating in a Participating ACO.

An SDM practitioner is an ACO professional in an SDM Practice who will be furnishing the SDM Service to applicable beneficiaries under the SDM Model.

Application Process:

ACOs that are currently in the Medicare Shared Savings Program or Next Generation ACO Model and are interested in participating in the SDM Model must submit an electronic, non-binding Letter of Intent (LOI) for consideration for participation in the DDS and SDM Models, the first step of the application process. The LOI submission period begins on December 8, 2016 and closes on March 5, 2017. More information is available on the BEI Models website at:

For More Information please contact: or visit the Innovation Center webpage at


[1]       Centers for Medicare & Medicare Services. Quality Strategy, pp. 2. (2016). <>

[2]       Greene J, Hibbard JH, Sacks R, Overton V, Parrotta CD. When patient activation levels change, health outcomes and costs change, too. Health Affairs. 2015; 34(3):431-437.

[3]       Oshima Lee, Emily, and Ezekiel J. Emanuel. “Shared Decision Making to Improve Care and Reduce Costs.” New England Journal of Medicine 368, no. 1 (January 3, 2013): 6–8.

[4]       Alston, C., Berger, Z. D., Brownlee, S., Elwyn, G., Fowler Jr., F. J., Hall, L. K., Montori, V. M., Moulton, B., Paget, L., Shebel, B. H., Singerman, R., Walker, J., Wynia, M. K., & Henderson, D. (2014). Shared Decision-Making Strategies for Best Care: Patient Decision Aids. Institute of Medicine.

[5]       Stacey, D., Légaré, F., Col, N. F., Bennett, C. L., Barry, M. J., Eden, K. B., Holmes-Rovner, M., Llewellyn-Thomas, H., Lyddiatt, A., Thomson, R., Trevena, L., & Wu, J. H. C. (2014). Decision aids for people facing health treatment or screening decisions. Cochrane Database Syst Rev, 1.

[6]       Arterburn, D., Wellman, R., Westbrook, E., Rutter, C., Ross, T., McCulloch, D., Jung, C. (2012). Introducing decision aids at group health was linked to sharply lower hip and knee surgery rates and costs. Health Affairs (Project Hope), 31(9), 2094-2104. doi:10.1377/hlthaff.2011.0686 [doi]

[7]       Agency for Healthcare Research and Quality. (2015). Overcoming Barriers to Shared Decision Making [PowerPoint slides].

[8]       Friedberg, M. W., Busum, K. V., Wexler, R., Bowen, M., & Schneider, E. C. (2013). A Demonstration of Shared Decision Making In Primary Care Highlights Barriers to Adoption and Potential Remedies. Health Affairs, 32 (2), 268-275. doi: 10.1377/hlthaff.2012.1084 [doi]

[9]       Légaré F, Ratté S, Gravel K, Graham ID. Barriers and facilitators to implementing shared decision‐making in clinical practice: update of a systematic review of health professionals' perceptions. Patient Educ Couns. 2008 Dec; 73(3):526‐35. PMID: 18752915.

[10]     O’Connor AM, Llewellyn-Thomas HA, Flood AB. “Modifying Unwarranted Variations In Health Care: Shared Decision Making Using Patient Decision Aids.“ Health Aff (Millwood). 2004 Suppl. Web Exclusive: VAR63-72. October 7, 2004.