CMS to provide incentive payments to ACOs and primary care providers in 2025

A version of this article was published in the April 2024 edition of Healthcare News.

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 healthcare 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 Jan. 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.