Direct Contracting Has a New Voice in Washington. Here's What It Wants to Change.

Direct contracting has been gaining traction among employers seeking alternatives to traditional healthcare purchasing. Now the model has an organized voice in Washington.

The Association for Direct Care (ADC) launched September 23, bringing together employers, clinicians, healthcare companies, and purchaser organizations to advocate for federal policies that expand direct contracting and reduce administrative and regulatory barriers.

Participants named at launch included Nomi Health, the American Academy of Family Physicians, the National Alliance of Healthcare Purchaser Coalitions, the ERISA Industry Committee, and the Employers' Forum of Indiana.

Led by Executive Director Taylor Hittle, the coalition intends to work with Congress and the administration to expand direct contracting in commercial health coverage and federal programs.

DirectContract covered the coalition's launch in September. The more consequential question now is whether its policy agenda can make direct arrangements easier to operate at scale.

Cost pressure is sharpening the argument

According to KFF's 2026 Employer Health Benefits Survey, average annual premiums for employer-sponsored family coverage reached $28,303, up 5% from 2025. Workers contributed an average of $7,471 toward family coverage—up 9% from the prior year.

Those figures help explain the interest in alternatives to conventional carrier-negotiated networks.

Direct contracting allows employers and other healthcare purchasers to negotiate arrangements directly with hospitals, physician groups, primary care practices, and specialty providers. An agreement might set specific prices, quality expectations, access terms, and payment arrangements without relying exclusively on a traditional network contract.

But negotiating a direct agreement is often easier than implementing it.

Six policy changes the coalition is pursuing

ADC has identified six federal priorities intended to address barriers to wider adoption.

1. Establish a federal ERISA framework. The coalition wants clearer federal rules governing direct agreements between employers and healthcare providers. Greater regulatory certainty could make purchasers and providers more comfortable with direct arrangements.

2. Enable joint purchasing. Allowing employers to aggregate purchasing demand through a common contract could open direct contracting to smaller organizations without enough covered lives or leverage to negotiate independently.

3. Remove restrictive contracting provisions. The association is targeting terms such as anti-steering, anti-tiering, and all-or-nothing provisions that can impede employers' ability to direct members toward selected providers offering better value.

4. Guarantee access to healthcare data. Employers and plan fiduciaries would gain stronger rights to claims, pricing, and audit information needed to assess spending and evaluate contract performance.

5. Protect multistate arrangements. Clarifying federal preemption could reduce uncertainty for employers and providers operating direct contracts across state lines.

6. Support implementation. Grants, training, and technical assistance could help smaller providers and benefits administrators build the operational infrastructure needed to participate.

These are policy proposals, not enacted federal requirements. The extent and timing of any legislative changes remain uncertain.

The opportunity extends beyond negotiating rates

The coalition's agenda addresses a fundamental challenge: the gap between signing a direct contract and operating one successfully.

An employer may secure a competitive bundled surgical rate, for example, but still needs member navigation, eligibility verification, claims administration, provider payment, quality reporting, and performance measurement.

Access to underlying claims data is also essential to assess whether a contract is producing meaningful savings rather than shifting utilization or administrative expense.

Federal reform could lower barriers, but it would not eliminate those operating requirements. That creates opportunities for contract administration, direct-payment infrastructure, provider analytics, member navigation, and purchasing intelligence.

It also raises the possibility that pooled purchasing and more standardized implementation models could bring direct contracting within reach of smaller employers.

What happens next?

ADC's emergence gives direct contracting a coordinated federal policy agenda. In an October 22 interview with Ambulatory Surgery Center News, Hittle discussed potential legislation covering ERISA certainty, data access, implementation support, multistate arrangements, and restrictions that obstruct direct contracting.

But long-term growth will depend on more than legislative support.

Employers still need evidence of competitive costs, convenient access, and measurable quality improvements. Providers need predictable reimbursement without another layer of unnecessary administration.

The next milestones are whether the coalition's priorities become specific legislation, whether employers gain meaningful control of their healthcare data, and whether direct arrangements become easier to implement across markets.

The bigger story is the potential shift from direct contracting as a customized employer benefit strategy to a more standardized way of buying healthcare.

ADC is trying to build the policy framework for that transition.

Sources

• Association for Direct Care — launch announcement
• Association for Direct Care — policy priorities
• KFF — 2026 Employer Health Benefits Survey
• Ambulatory Surgery Center News — October 22 interview with ADC's Taylor Hittle