Geographic Direct Contracting Model

Update: The Geographic Direct Contracting Model has been canceled because it does not align with CMS’s vision of accountable care and concerns  raised by stakeholders. Thank you for your feedback and patience as we reviewed this model. The CMS Innovation Center remains dedicated to developing models that build integrated relationships with health care providers and community organizations to better coordinate care and address the clinical and social needs of Medicare beneficiaries. 

The Geographic Direct Contracting Model (also known as “Geo”) was a new payment and service delivery model considered by the Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center). The Model would have tested whether a geographic-based approach to care delivery and value-based care can improve health and reduce costs for Medicare beneficiaries across an entire geographic region.


Geo was built on lessons the CMS Innovation Center learned from prior Medicare shared savings initiatives, including the Medicare Shared Savings Program and the Next Generation ACO Model, as well as innovative approaches from Medicare Advantage, Medicaid Managed Care, and commercial health risk-sharing arrangements. Geo would have required participants to take full risk with 100 percent shared savings / shared losses, with risk corridors, for Medicare Parts A and B services for Medicare fee-for-service beneficiaries in a defined target region. Geo would have been tested over a six-year period in four to ten regions with two three-year Model Agreement Periods.

Direct Contracting Entities (DCEs) in Geo would have assumed financial risk in return for enhanced flexibilities, making it possible for these entities to offer Medicare beneficiaries an increased focus on care coordination through care delivery innovation. The additional tools and flexibilities available to DCEs would have included preferred provider networks, care coordination and clinical management, and payment integrity and medical review. Beneficiaries would have maintained all of their Original Medicare benefits including access to all Medicare enrolled providers and all existing appeal rights under Original Medicare. The unique, geographic focus of the Model would have allowed DCEs to make investments in communities and build relationships based on their knowledge of a community’s specific local needs.


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