The Centers for Medicare & Medicaid Services (CMS) recently announced the ACO Primary Care Flex Model (ACO PC Flex Model or Model), a new voluntary payment model for primary care furnished through low-revenue Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program (MSSP). ACOs that participate in the Model will receive monthly prospective payments for primary care services, along with a one-time advanced payment to cover administrative costs. For most Model participants, CMS expects that these monthly payments will increase primary care funding relative to ACOs’ historical expenditures.
The Model is expected to run for a five-year period beginning on January 1, 2025, and is part of CMS’s continued effort to improve funding for primary care, foster equitable access to high-quality primary care, promote competition in healthcare, and transition all Medicare fee-for-service (FFS) beneficiaries (and most Medicaid beneficiaries) into an accountable care relationship by 2030.
Payment Mechanisms
Under the Model, CMS will make the following payments:
- Advanced payment – Each participating ACO will receive a one-time advanced shared savings payment of $250,000. The advanced payment is intended to cover costs associated with forming an ACO (if applicable) and administrative costs for required Model activities. It will not be risk adjusted or based on assigned beneficiaries; all ACOs will receive the same advanced payment amount.
- Prospective payments – Each participating ACO will receive monthly prospective, population-based primary care payments (PPCPs) that replace FFS reimbursement for most primary care services provided by the ACO’s participating primary care providers (PCPs). The PPCPs will include a base rate derived from the average primary care spend in the ACO’s county and an enhanced amount calculated based on certain ACO characteristics and the ACO’s assigned beneficiary population.
The ACO PC Flex Model’s payments are aimed at providing ACOs with flexibility and additional funding to provide more convenient care (e.g., virtual or at-home care), furnish additional preventive health services, and better manage chronic disease through a team-based and patient-centered approach.
The Model will include policies to ensure the PPCPs are used to support primary care and flow to the ACO’s PCPs. ACOs will be required to submit periodic reports of spending and plans that describe how they intend to use the PPCPs. The Model will also include allocation requirements for defined spend categories and other guardrails to ensure that the majority of funds are spent to improve primary care.
Eligibility
Participation in the Model will be at the ACO level, and PCPs who are not affiliated with a participating ACO will be unable to participate. To be selected for the Model, an ACO must participate in the MSSP, qualify as a low-revenue ACO under the MSSP, and satisfy the eligibility requirements outlined in the Model’s forthcoming Request for Applications (RFA).
Providers participating in another CMS model involving shared savings will be prohibited from participating in the ACO PC Flex Model, unless otherwise permitted by CMS (e.g., overlap will be permitted with the Guiding an Improved Dementia Experience (GUIDE) Model).
Application Process and Timeline
Entities interested in participating in the Model must first apply to the MSSP, and, if currently participating in the MSSP, must reapply as a renewal applicant and begin a new agreement period. The MSSP application period will be open May 20, 2024 through June 17, 2024.
Participants must then also meet requirements in the forthcoming RFA, which CMS intends to release in May 2024. CMS expects that Model applications will be due in early August 2024. At this time, CMS is planning to select approximately 130 ACOs to participate in the Model.
If you have any questions about the ACO PC Flex Model, please contact the authors.