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Over the past several years, the big trend in healthcare has been to inch away from fee-for-servicereimbursement and toward value-based care, in which a provider's reimbursement is tied more to clinical quality than to volume. The industry, policymakers and the federal government have attempted this shift through a number of legal and regulatory means, and one policy that has proven popular in this regard, among both providers and payers, is direct contracting.
In basic terms, direct contracting is a population-based model that allows for the use of capitation. This is what sets it apart: Aside from Next Gen and Pioneer, virtually all of the other compensation-based models from the Centers for Medicare and Medicaid Services are billed as fee-for-service, with a reconciliation 18 months later.