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February 25, 2022

CMS Innovation Center redesigns direct contracting model and releases applications for revised ACO REACH Model

On February 24, the Center for Medicare and Medicaid Innovation (CMS Innovation Center) announced a redesign of the Global and Professional Direct Contracting (GPDC) Model and a transition to the re-named ACO Realizing Equity, Access and Community Health (REACH) Model. According to the news release, the redesigned model "better reflects the agency's vision of creating a health system that achieves equitable outcomes through high quality, affordable, person-centered care." The GPDC Model will continue until December 31, 2022, and then will transition to the ACO REACH Model. In the meantime, CMS says they will "operate the GPDC Model with more robust and real-time monitoring of quality and costs for model participants" and that model participants that do not meet the requirements will face corrective action and potential termination from the model. The CMS Innovation Center also announced it is permanently cancelling the Geographic Direct Contracting Model (also known as the "Geo Model") effective immediately, which was initially paused in March 2021.

The redesign comes amid pushback from progressive lawmakers who demanded an end to the Direct Contracting models, criticizing the model design that they said allows funds leftover from capitated payments to be kept as profit, creating a "perverse motive to decrease the quality and volume of seniors' care." Provider groups, however, have been advocating to retain the model amid concern it would shatter confidence in value-based care participation and instead advocated for tweaks to ensure beneficiary protections.

Additional information is available in the attached Tax Alert.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Heather Meade (
   • Laura Dillon (