Stakeholders Praise CMS’ ACO Primary Care Flex Model

March 19, 2024
CMS Innovation Center model will provide a one-time advanced shared savings payment and monthly prospective primary care payments to ACOs

A new voluntary model announced March 19 by the CMS Innovation Center seeks to empower primary care providers in smaller accountable care organizations (ACOs) to treat people with Medicare using team-based, person-centered proactive care. The announcement drew praise from primary care groups participating in the Medicare Shared Savings Program.

The ACO Primary Care Flex Model will provide a one-time advanced shared savings payment and monthly prospective primary care payments (PPCPs) to ACOs. The advanced shared savings payments provide ACOs with needed resources and flexibility to cover costs associated with forming an ACO (where relevant) and administrative costs for required model activities. PPCPs will be distributed by ACOs to primary care practices, giving them improved resources and flexibility to provide care that best suits individuals’ needs.  

The model also incentivizes team-based care approaches to medical and social needs, which will create total-cost-of-care savings while preserving or enhancing the quality of care, HHS said.
“By giving ACOs more flexibility and additional funding and support to deliver high-value primary care, the ACO PC Flex Model can help providers identify and address people’s unmet health-related needs,” said Liz Fowler, CMS Deputy Administrator and Director of the CMS Innovation Center, in a statement. “This model strengthens incentives for more providers to form ACOs and meet CMS’ goal of increasing the number of people with Medicare who are in an accountable care relationship.” 

The CMS Innovation Center will test this new model within the Medicare Shared Savings Program. The model will focus on low-revenue ACOs, which tend to be smaller and mainly made up of physicians. Low-revenue ACOs 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 ACO PC Flex Model’s payment structure also promotes competition by providing a pathway for low-revenue ACOs, which often have fewer resources, to continue serving people with Medicare while providing an alternative for physicians to stay independent. 

The ACO PC Flex Model is a five-year voluntary model that will begin on Jan. 1, 2025. CMS is planning to select approximately 130 ACOs to participate. Organizations interested in participating must first apply — either as new ACOs or renewing ACOs — to the Shared Savings Program.

The immediate response from stakeholders was enthusiastic. In a tweet, Farzad Mostashari, M.D., founder and CEO of value-based primary care network company Aledade, said: “If you wanted to craft a CMS Innovation Center model with the best chance of improving care and reducing cost, this would be it. CMS nails it with the ACO PC Flex Model.”

In a statement, Clif Gaus, Sc.D., president and CEO of the National Association of ACOs (NAACOS), said that his organization has been advocating for this approach, “which will bolster primary care practices in ACOs. Shifting to prospective payments provides primary care practices with stable and predictable cash flow needed to transform care delivery and provide comprehensive, team-based care.”

Gaus added that this model builds on the success of MSSP while recognizing we must continue to evolve the program in order to grow the program. However, he added that NAACOS asks that CMS “reconsider excluding high-revenue ACOs, which prevents independent primary care practices who have partnered with their local health systems from taking advantage of these much-needed innovations.”

In a statement, Premier also praised the model, while joining NAACOS is expressing disapproval of the exclusion of high-revenue ACOs. Premier "continues to strongly urge CMS to eliminate arbitrary distinctions between high- and low-revenue ACOs and ensure that the ACO Primary Care Flex model is open to all ACOs regardless of their revenue status or structure."

“Experience shows that Medicare’s physician-led ACOs have produced superior results in terms of quality improvements and shared savings, and this new model could boost their performance further,” said Susan Dentzer, president and CEO of America’s Physician Groups, in a statement.

She noted that although Primary Care Flex will not enable participating clinicians to take on full risk for the costs and quality of care – unlike, for example, the ACO REACH model – it is nonetheless a useful addition to the range of alternative payment models that are delivering positive results for patients and taxpayers. “In particular, getting some portion of shared savings in advance could help many physician practices make the needed investments in infrastructure and care redesign that are integral to advanced primary care,” Dentzer said.


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