Under the DC model, so-called Direct Contracting Entities (DCEs) are paid monthly by the Centers for Medicare and Medicaid Services (CMS) to cover a specified portion of a patient's medical care—a significant shift from traditional Medicare's direct reimbursement of providers.

DCEs are allowed to pocket the funding they don't spend on care, an arrangement that critics believe will incentivize the private middlemen to skimp on Medicare patients—many of whom could be auto-enrolled into DCEs without their knowledge or permission.

According to a policy brief released by PNHP, "Virtually any company can apply to be a DCE, including investor-backed startups that include primary care physicians, [Medicare Advantage] plans and other commercial insurers, accountable care organizations (ACOs) or ACO-like organizations, and for-profit hospital systems."

"Applicants are approved by CMS without input from Congress or other elected officials," the group notes.

At present, the pilot includes 53 DCEs in 38 states, Washington, D.C., and Puerto Rico. Drs. Richard Gilfillan and Donald Berwick pointed out in a September article for Health Affairs that 28 of the current DCEs are controlled by investors, not healthcare providers. A second tranche of DCEs is expected to debut in January 2022.