Summary List Placement
The US government just unveiled which healthcare companies are taking part in a program that aims lower costs for Medicare, the federal health program for the elderly and some disabled people.
The Centers for Medicare & Medicaid Services said 53 organizations are participating in the “direct-contracting” program that kicked off April 1.
It’s the first year for the program, which is expected to run for six years. Among those that got a contract are insurance upstarts like Clover Health, and primary-care startups, including Iora Health, Oak Street Health and VillageMD. Subsidiaries of big insurers like Humana and Anthem are also taking part.
Shares of Clover, which went public through a SPAC in January, soared more than 20% on the news of its landing a contract, while Oak Street’s shares jumped 5%.
Companies like Clover have been buzzing about the direct-contracting program for months because it has the potential to give them thousands of new members and a new source of revenue.
“This is a revolutionary program to bring innovative and high-quality primary care services to more Medicare beneficiaries,” Erin Page, president of value-based care at VillageMD, told Insider in an emailed statement. “As a leader in primary care offerings, we firmly believe CMS’ program is the right decision for the American people who need these enhanced healthcare services.”
The direct-contracting program is an experiment to improve care and save money
The voluntary program is an experiment to improve the health and lower the costs of people enrolled in traditional Medicare, and it draws in part from lessons learned through Medicare Advantage, the private alternative to Medicare.
Companies that participate in the program are held accountable for the quality and cost of their patients’ healthcare. They are paid monthly fees to provide care, rather than receiving payments every time a patient visits the doctor.
Clover, which …read more