On Tuesday, Sep. 5, officials at the federal Centers for Medicare & Medicaid Services (CMS) unveiled a new alternative payment model (APM), one that will give state governments more flexibility in managing chronic disease, and which builds on lessons learned from existing state-based models, including the Maryland Total Cost of Care Model, the Vermont All-Payer ACO Model, and the Pennsylvania Rural Health Model.
A press release posted to the agency’s website on Tuesday afternoon began thus: “Today, the Centers for Medicare & Medicaid Services (CMS) unveiled a transformative step to test a state’s ability to improve the overall health care management of its state population. The States Advancing All-Payer Health Equity Approaches and Development Model (“States Advancing AHEAD” or “AHEAD Model”) aims to better address chronic disease, behavioral health, and other medical conditions. Under the AHEAD Model, participating states will be better equipped to promote health equity, increase access to primary care services, set health care expenditures on a more sustainable trajectory, and lower health care costs for patients. The AHEAD Model represents the next iteration of the CMS Innovation Center’s multi-payer total cost of care models. States participating in AHEAD will be accountable for quality and population health outcomes, while reducing all-payer avoidable health care spending to spur statewide and regional health care transformation,” the press release states, adding that, “Through this new voluntary Model, CMS will partner with states to redesign statewide and regionwide health care delivery to improve the total population health of a participating state or region by improving the quality and efficacy of care delivery, reducing health disparities, and improving health outcomes. AHEAD also includes specific payment models for participating hospitals and primary care practices as a tool to achieve Model goals. Through AHEAD, CMS aims to strengthen primary care, improve care coordination for people with Medicare and Medicaid, and increase screening and referrals to community resources like housing and transportation to address social drivers of health.”
The press release goes on to quote CMS Administrator Chiquita Brooks-LaSure, who said in a statement that, “In our current health care system, fragmented care contributes to persistent, widening health disparities in underserved populations. The AHEAD Model is a critical step towards addressing disparities in both health care and health equity while improving overall population health.”
And it quotes Deputy CMS Administrator and Innovation Center Director Liz Fowler, who in a companion statement said that “Primary care is the foundation of a high-performing health system and essential to improving health outcomes for patients and lowering health care costs. For that reason, the CMS Innovation Center has invested significant time and resources over the years testing models to strengthen primary care and improve care coordination and linkages to organizations that address health-related social needs. Through AHEAD, more states will have the exciting opportunity to both improve the overall health of their population, support primary care, and transform health care in their communities,” Fowler stated.
The press release goes on to note that “CMS will issue awards to up to eight states. Each state selected to participate in the AHEAD Model will have an opportunity to receive up to $12 million from CMS to support state implementation. Recognizing that some states are more ready than others to implement change, states interested in participating in the model may apply during two different application periods and elect to participate in one of three cohorts with staggered start dates and performance years. The Notice of Funding Opportunity (NOFO), which includes the specific application requirements, will be released in late fall 2023. States will have 90 calendar days to apply for a cooperative agreement award during this first application period. The second NOFO application period is anticipated to open in Spring 2024 with a 60-day application period. States must apply to the NOFO during the application period to participate in the AHEAD Model. For additional information on the NOFO application timeline, please refer to the model website. The pre-implementation period is scheduled to begin for the first cohort in summer 2024. The model performance period for states is scheduled to begin in January 2026 or January 2027, depending on the cohort, and the model will conclude for all state participants in December 2034. CMS is offering a longer pre-implementation, or planning period, for states that need additional time to prepare for the care redesign required under the Model. CMS is also testing this Model over a longer period to allow time for early investments in primary care services and enhanced care coordination to result in better health and lower spending.”
Further, the press release states, “The AHEAD Model will test state accountability for constraining overall growth in health care expenditures while increasing investment in primary care and improving population health and health equity. More specifically, the AHEAD model will:
Focus resources and investment on primary care services, giving primary care practices the ability to improve care management and better address chronic disease, behavioral health, and other conditions.
Provide hospitals with a prospective payment stream via hospital global budgets, while including incentives to improve beneficiaries’ population health and equity outcomes.
Address health care disparities through stronger coordination across health care providers, payers, and community organizations in participating states or regions.
Address the needs of individuals with Medicare and/or Medicaid by increased screening and referrals to community resources like housing and transportation.
States have existing relationships with hospitals, primary care providers, payers, local government and communities, and non-profit organizations, which can be leveraged to improve population health and advance health equity,” the press release notes. “Under the AHEAD Model, participating states will take accountability for health care spending, population health, and health equity improvements. State participants will partner with hospitals and primary care practices to redesign care. Additionally, a primary role of states participating in the AHEAD Model will be to leverage existing relationships to recruit and partner with hospitals for purposes of the hospital global budgets — participating hospitals will receive a fixed payment amount in advance of a prospectively set budget per year.”
And, it emphasizes, “These payments would be for both Traditional Medicare and Medicaid, while other payers may also choose to pay participating hospitals based on a global budget for their enrolled populations or specific patient groups. Additionally, states will recruit primary care providers to participate in multi-payer primary care transformation, which will include increased investment by Traditional Medicare and an advanced primary care program aligned between Medicaid and Traditional Medicare. Other payers may also choose to align with this advanced primary care program by offering prospective care management payments, rewarding performance on aligned quality measures, and focusing provider efforts on behavioral health integration and addressing health-related social needs.
Each participating state will have a Medicare total cost of care growth target in the AHEAD Model determined by CMS and participating states during the pre-implementation period; this target should incentivize states to control unnecessary spending by reorienting care towards prevention and providing care in the safest, lowest acuity setting. The all-payer cost growth targets, which will be set by states, will encourage states to align payer efforts to slow the growth of health care costs while driving transformative change. States will also have a Medicare and an all-payer primary care investment target to enhance primary care delivery.”
Further, the press release states, “The AHEAD Model builds on lessons learned from existing state-based models, including the Maryland Total Cost of Care Model, the Vermont All-Payer ACO Model, and the Pennsylvania Rural Health Model. The Model’s flexible framework capitalizes on existing state innovations while testing one suite of interventions across all states. It offers additional states the opportunity to curb growth in health care spending, improve population health, and advance health equity by reducing disparities in health outcomes.”
Healthcare Innovation has been tracking developments in this area over time. As Senior Contributing Editor David Raths wrote in a Nov. 10 article entitled “Progress Report on Multi-Payer Alignment From State Transformation Collaboratives,” “Last December [December 2021], CMS Administrator Chiquita Brooks-LaSure announced the launch of a state-based initiative for the Health Care Payment Learning & Action Network (LAN) to accelerate the movement toward advanced payment models. The State Transformation Collaborative program started in Arkansas, California, Colorado and North Carolina. At this week’s LAN Summit, leaders from those states shared stories about progress on multi-payer alignment. The LAN, launched in March 2015 by the U.S. Department of Health & Human Services (HHS), brings together public, private, and nonprofit sectors to link healthcare payments to quality and value through the increased adoption of alternative payment models (APMs).”
In that article, Raths quoted Kate Davidson, the director of the learning and diffusion group at the Center for Medicare and Medicaid Innovation (CMMI), who “began the panel discussion by saying that multi-payer alignment is a priority for the CMS Innovation Center. “In fact, we've set a goal to include a multi-payer alignment strategy in all new models where applicable by 2030. Our goal is to reduce provider burden and make it easier for providers to engage in value-based care arrangements so we can expand the reach of value-based care to more patients regardless of the payer,” she said. The multi-payer nature of the U.S. healthcare system has meant that any changes in financial incentives by one payer type only have an incremental effect on overall spending and provider finances, she added.”
