CMS to Provide Incentive Payments to ACOs and Primary Care Providers in 2025
By Georgia Green, Senior Manager, Health Care Consulting Practice, Moss Adams
By Steven Hartley, Manager, Moss Adams
Original Publish Date: April 9, 2024
The Centers for Medicare & Medicaid Services (CMS) announced the Accountable Care Organizations Primary Care Flex Model (ACO PC Flex) on March 19, 2024, which will provide new payments designed to support person-centered care, improve health care outcomes, and address health disparities, particularly in underserved Medicare populations.
This voluntary initiative aims to support primary care practices in eligible ACOs by providing an advanced shared savings payment for infrastructure and monthly prospective primary care payments that replace fee-for-service payments.
The model starts on January 1, 2025. CMS intends to select 130 Medicare Shared Savings Program (MSSP) ACOs to participate.
Background
CMS will pilot the new ACO PC Flex Model within the MSSP, particularly targeting smaller, low revenue ACOs, which tend to consist of independent physicians. A low revenue ACO is defined as having total Medicare Parts A and B fee-for-service (FFS) revenue less than 35% of the total Medicare Parts A and B FFS expenditures of the ACO's assigned beneficiaries. This typically excludes ACOs with hospital participants. Historically, low revenue ACOs have achieved superior performance in generating savings and enhancing care quality and efficiency.
The model’s payment framework aims to increase competition by offering resource-constrained ACOs the ability to continue serving Medicare beneficiaries and supporting physicians who wish to remain independent.
The model will provide a one-time Advanced Shared Savings Payment and monthly Prospective Primary Care Payments (PPCPs). The advanced payment is designed to provide ACOs with up-front financial resources to cover the administrative costs required to invest in value-based care activities.
The PPCPs will be distributed by the ACO entities to their participating primary care practices, including federally qualified health centers (FQHCs) and rural health clinics (RHCs), and will replace traditional fee-for-service payments. ACOs will be encouraged to distribute the funds on a capitated basis.
Model Information
The ACO PC Flex Model will be conducted over five years beginning on January 1, 2025. CMS intends to select approximately 130 ACOs for participation during the Summer 2024 application period.
Selected ACOs will receive an up-front Advanced Shared Savings Payment of $250,000, intended to cover the costs of forming an ACO, if relevant, and the administrative costs for required model activities.
The PPCP will include a base rate based on the average primary care expenditure per county, ensuring a more precise representation of the costs involved in delivering extensive primary care services to underserved populations. Payments will be amplified by payment enhancements based on characteristics of the ACO and its assigned patient population.
Next Steps
If interested, organizations must first apply for the MSSP, either as a new or renewing ACO, with applications open from May 20, 2024, to June 17, 2024. ACOs in both the MSSP Basic and Enhanced tracks will be allowed to participate, and participation will be at the ACO level. ACOs participating in the ACO PC Flex Model will be ineligible to receive Advance Investment Payments (AIP).
The request for applications (RFA) for the ACO PC Flex Model will be released in Q2 2024.
We’re Here to Help
To learn more about the program, contact your Moss Adams professional. Our team can provide guidance such as financial projections and operational planning to help ACOs and their primary care providers evaluate and benefit from this unique funding opportunity.
Contact Georgia Green, Senior Manager, at Georgia.Green@mossadams.com or (916) 503-8251 for more information.
Additional Resources