The ACO Primary Care Flex Model (ACO PC Flex Model) is a voluntary model that will focus on primary care delivery in the Medicare Shared Savings Program (Shared Savings Program). It will test how prospective payments and increased funding for primary care in Accountable Care Organizations (ACOs) impact health outcomes, quality, and costs of care. The flexible payment design will empower participating ACOs and their primary care providers to use more innovative, team-based, person-centered and proactive approaches to care.
The model, which starts January 1, 2025, aims to grow participation in ACOs and the Shared Savings Program and increase the number of people with Medicare in an accountable care relationship.
Highlights
- People often experience better health outcomes and greater life expectancy when they receive high-quality, coordinated primary care.
- Improved funding for primary care has the potential to amplify these positive outcomes, especially for underserved populations.
- The ACO PC Flex Model aims to increase access to high-quality primary care for people with Medicare by improving funding and other resources to enhance primary care in ACOs.
- It will incentivize the development of new ACOs, particularly those that will support underserved communities, and can help address health disparities.
Background
Primary care is the foundation of a high-functioning health care system and serves as an important first point of contact for people seeking care. The aim of primary care is to deliver evidence-based, person-centered care that provides continuity and is comprehensive and coordinated. People who have access to high-quality primary care are more likely to receive preventive health services and screenings and to experience improved health outcomes related to mortality, disease progression, and chronic condition management. Access to high-quality primary care also can narrow disparities in health outcomes and lower the total cost of care. Yet, in the United States, primary care faces workforce shortages and other challenges that highlight a need for increased funding. ACOs play a key part in addressing these challenges, but have been hampered in their ability to pay for advanced primary care because of the way incentives are structured in the traditional fee-for-service system.
Model Overview
The ACO PC Flex Model is a five-year voluntary model test within the Shared Savings Program that begins January 1, 2025. It aims to increase the number of low revenue ACOs in the Shared Savings Program. Low revenue ACOs tend to be mainly made up of physicians and might include a small hospital or serve rural areas. They have historically performed better in the Shared Savings Program, demonstrating more savings and stronger potential to improve the quality and efficiency of care delivery.
The model’s new Prospective Primary Care Payment (PPCP) option will shift payment for primary care away from fee-for-service, visit-based payment to enhance the predictability and amount of primary care funding for low revenue ACOs, thus increasing their flexibility to meet the needs of people with Medicare. The model also includes a one-time Advanced Shared Savings Payment to help cover costs associated with forming an ACO and administrative costs for model activities. Recent Shared Savings Program results continue to underscore the importance of high-quality primary care to the program’s success. The model is based on a recommendation made by the National Academies of Sciences, Engineering and Medicine in a report titled “Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care,” which recommended funds flow to primary care through ACOs to better support team-based care and provider infrastructure.
The goals of the ACO PC Flex Model are to:
- Expand access to high-quality, accountable care and improve the patient experience for people with Medicare.
- Enhance primary care payment and spur innovative approaches to care delivery, such as team-based care that is proactive and person-centered and drives quality improvement.
- Narrow disparities in health care outcomes.
- Reduce program expenditures while preserving or enhancing the quality of care for people in the Shared Savings Program.
- Strengthen participation incentives for new and low revenue ACOs in the Shared Savings Program
The ACO PC Flex Model advances payment arrangements within the Shared Savings Program in four main ways:
- A regionally consistent rate for primary care spending. The PPCP is a monthly payment made up of two parts: a County Base Rate and Payment Enhancements, where relevant.
- The PPCP County Base Rate will not be based on the historical experience of the ACO, but on a county’s average primary care spending (before social and clinical risk factors are applied).
- PPCP Payment Enhancements — which are intended to provide additional resources to ACOs to support increased access to primary care, provision of care, and care coordination — will not be put at risk, meaning they will not be recouped by CMS. This will increase the long-term predictability and stability of primary care resources.
- Specific policies to ensure PPCP funds are used to support primary care. A one-time Advanced Shared Savings Payment to help cover costs associated with forming an ACO and administrative costs for model activities.
Health Equity Strategy
Improving primary care is a cornerstone of the Innovation Center’s strategy to increase access to high-quality, person-centered care. The ACO PC Flex Model supports this strategy by focusing on driving accountable care and advancing health equity.
The design of the PPCP as a flexible, predictable revenue stream that can exceed existing payment levels is expected to appeal to many low revenue ACOs. There are key components of the model payment methodology that promote equity to make the PPCP an attractive option to ACOs with Federally Qualified Health Center and Rural Health Clinic participants. These components include basing an ACO’s PPCP rate on its average county primary care spending rather than on its historical spending. This enables the model to pay an ACO the same rate for a given person in a region (before social and clinical risk factors are applied) thereby increasing payment for providers that have entrenched patterns of inappropriately low spending for underserved areas and populations. The PPCP also includes, where appropriate, payment enhancements and adjustments to the county rate to provide additional resources to providers caring for underserved populations.
The ACO PC Flex Model will address health equity and drive better outcomes for underserved populations by:
- Increasing access to higher-quality primary care, which can include unique services such as proactive care management, patient navigation, and behavioral health integration.
- Aligning more people with Medicare to ACOs by incentivizing the formation of new ACOs, supporting existing ACOs, and attracting safety net providers, including Federally Qualified Health Centers and Rural Health Clinics to either form or join ACOs.
- Directing health care dollars toward underserved populations.
- Providing primary care practices with flexible funding necessary to improve care coordination and identify and address people’s unmet health-related social needs.
Model Participation
An ACO must participate in the Shared Savings Program and be a low revenue ACO (as defined under 42 CFR § 425.20) to be eligible to participate in the ACO PC Flex Model. Organizations interested in participating must first apply — either as new ACOs or renewing ACOs — to the Shared Savings Program. ACOs that are currently participating in the Shared Savings Program and are interested in also participating in the ACO PC Flex Model must apply to the Shared Savings Program as a Renewal Applicant and begin a new agreement period. ACOs will be asked to indicate their interest in participating in the ACO PC Flex Model in Phase 1 of the Shared Savings Program application. An ACO PC Flex Model Request for Applications is expected to be released in the second quarter of 2024. The initial submission period to apply to the Shared Savings Program closes June 17, 2024.
ACOs may not participate in the ACO PC Flex Model and receive Advance Investment Payments (AIP). Primary care providers not affiliated with a participating ACO are ineligible to participate.
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