New ACO model provides alternative for physicians to stay independent

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Accountable Care Organization stakeholders are applauding the capitation payments in the new ACO Primary Care Flex Model but lament that it leaves out high-revenue ACOs.

The Centers for Medicare and Medicaid Services announced the voluntary model for primary care ACOs that gives a one-time advanced Medicare Shared Savings payment and monthly prospective primary care payments.

The ACO PC Flex Model is designed to incorporate health equity and address health disparities in primary care by funding and incentivizing team-based-care approaches to medical and social needs, CMS said. Payment rates will be derived from county-average spending to more accurately reflect the cost of providing comprehensive primary care to underserved populations.  

The model will focus on and invest in low-revenue ACOs, which tend to be smaller and mainly made up of physicians, CMS said. 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, CMS said. 

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 January 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. Shared Savings Program Applications are open from May 20 to June 17. The ACO PC Flex Model Request for Applications (RFA) is planned to be released in the second quarter of 2024.

WHY THIS MATTERS

The population-based payments have long been advocated by the National Association of ACOs. Clif Gaus, president and CEO of the NAACOS, said this approach will bolster primary care practices in ACOs by providing a stable and predictable cash flow.

"While we are extremely pleased with the model, we ask 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," Gaus said.

Premier also applauded the model, which tests primary care capitation in the Medicare Shared Savings Program. But it is also disappointed that CMS is limiting the model to low-revenue ACOs, which will also limit the shift to value-based care, said Seth Edwards, VP of population health and value-based care for Premier.

THE LARGER TREND

The flex model is the latest from the CMS Innovation Center and another intended to strengthen primary care. CMMI was born out of the Affordable Care Act, which gave CMS the authority to test innovative payment and delivery models.

Last year, CMS released ACO REACH (Equity, Access, and Community Health) that replaced the Global and Professional Direct Contracting (GPDC) model. CMS announced changes in the model in August 2023 in response to stakeholder feedback.

ON THE RECORD

"We continue our work to improve the quality of care for people with Medicare by encouraging more primary care providers to participate in the ACO Primary Care Flex Model," said HHS Secretary Xavier Becerra. "Incentivizing greater investments in primary care will promote competition among healthcare providers and enable more people to receive coordinated, high-quality preventive care to keep them healthy – regardless of where they live. HHS will continue building on the Affordable Care Act, which not only brought more people coverage, but allowed us to develop innovative models that foster quality care, improve outcomes, reduce costs, expand access to services, and advance health equity."
 

Email the writer: SMorse@himss.org