1. How do Accountable Care Organizations (ACOs) apply for the ACO PC Flex Model?
To be eligible to participate in the ACO PC Flex Model, both new and renewing ACOs must first apply to the Shared Savings Program. ACOs that are currently participating in the Shared Savings Program and are interested in also participating in the ACO PC Flex Model must apply to the Shared Savings Program as a Renewal Applicant and begin a new agreement period. ACOs can indicate their interest in the ACO PC Flex Model by checking a box on the Shared Savings Program Application. Shared Savings Program Applications are open May 20, 2024, to June 17, 2024. CMS intends to release the ACO PC Flex Model Request for Applications (RFA) in the second quarter of 2024 and anticipates that ACO PC Flex Model applications will be due in early August 2024. If a currently participating Shared Savings Program ACO in an existing agreement period decides it does not want to be considered for the ACO PC Flex Model after the RFA is released, it can withdraw its ACO PC Flex Model application and stay in the Shared Savings Program. Similarly, a new ACO that applies to the ACO PC Flex Model but ultimately does not participate may either finalize or withdraw its Shared Savings Program application.
2. How will ACOs and their primary care providers benefit from participating in the ACO PC Flex Model?
Primary care is the foundation of a high-performing health care system and fundamental to improving the health of the United States. ACOs have been limited in their ability to provide advanced primary care because of visit-based payment mechanisms and financial incentives in both fee-for-service Medicare and the Shared Savings Program, respectively. The ACO PC Flex Model will test enhanced and prospective primary care payments to enable more team-based, proactive, and person-centered care by ACOs and their primary care providers. These payments include a one-time Advanced Shared Savings Payment and monthly Prospective Primary Care Payments (PPCP).
The Advanced Shared Savings Payment is intended to cover costs associated with forming an ACO (where relevant) and administrative costs for required model activities. This payment will not be risk adjusted or based on the number of beneficiaries assigned to an ACO. All ACOs will receive the same Advanced Shared Savings Payment amount.
3. How does the Prospective Primary Care Payment work?
The PPCP is a monthly payment for primary care services provided by primary care providers who participate in the ACO and provide primary care to the ACO’s assigned beneficiaries. The PPCP is made up of two parts, a County Base Rate to cover PPCP-eligible services (Prospective Primary Care Payment County Base Rate) and an Enhanced Amount for providing enhanced primary care services (Prospective Primary Care Payment Enhanced Amount).
The amount of payment made by CMS to the ACO will depend on the County Base Rate, which is derived from the average primary care spending in its county, and the Enhanced Amount(s) based on characteristics of the ACO and its assigned patient population. For most model participants, CMS expects that the PPCP will increase primary care funding relative to ACOs’ historical expenditures. CMS expects that participation decisions will also be driven by the flexibility afforded by prospective payment and its perceived value for care delivery relative to the status quo and the impact of operational and payment adjustments on the final PPCP rate.
ACOs participating in the ACO PC Flex Model will jointly participate in the Shared Savings Program. The calculation of the total cost of care benchmark for ACOs participating in the ACO PC Flex Model will be unchanged from the Shared Savings Program’s methodology (as codified at 42 C.F.R. Part 425 Subpart G). Regarding the financial settlement process, participating ACOs will be subject to risk on the County Base Rate portion of their total PPCP. The monthly cash flow received by the ACO through the PPCP County Base Rate will be included as a performance year expenditure in the calculation of Shared Savings Program Shared Savings/Shared Losses for the performance year. The County Base Rate will not be reconciled against actual claims expenditures, so it will not be impacted by the amount of the actual primary care claims submitted by providers. ACOs will not be subject to risk on the Enhanced Amounts of their total PPCP. This means that Enhanced Amounts will not be recouped by CMS as part of performance-based risk arrangements.
4. ACOs that participate in the Shared Savings Program receive the PPCP for primary care services in lieu of fee-for-service payments. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) do not receive fee-for-service payments. How will the ACO PC Flex Model drive participation in the Shared Savings Program for RHCs and FQHCs? Are there special considerations for FQHCs and RHCs, who are not paid fee-for-service like other primary care providers?
The ACO PC Flex Model includes special considerations for RHCs and FQHCs, who are not paid fee-for-service like other primary care providers. A beneficiary level adjustment to the PPCP is included for beneficiaries who receive the plurality of primary care services based on allowable charges at FQHCs or RHCs. Because the all-inclusive payment rate is different for FQHCs and RHCs, there will be a different primary care per-beneficiary per-month (PBPM) adjustment amount for each of these settings to encourage FQHCs and RHCs to participate in the ACO PC Flex Model.
5. Will this model qualify as an Advanced or Merit-based Incentive Payment System (MIPS) Alternative Payment Model (APM)?
The ACO PC Flex Model will not uniformly qualify as an Advanced APM. Separate Advanced APM determinations will be made for each Shared Savings Program participation risk option. A subsequent Qualifying Participant (QP) determination would be based on the Shared Savings Program risk track and option level in which the QP’s ACO participates. CMS anticipates that ACOs participating in the ACO PC Flex Model and the Shared Savings Program BASIC track option E and ENHANCED track will be in an Advanced APM. ACOs participating in option levels A through D of the BASIC track will not be in an Advanced APM.
CMS anticipates that the ACO PC Flex Model will qualify as a MIPS APM beginning in the 2025 performance year and all subsequent performance years of the model, subject to CMS’ annual APM determinations.
6. Can providers in ACOs participate in other Innovation Center models if they are a part of the ACO PC Flex Model?
Health care providers participating in another Innovation Center model that involves shared savings will not be allowed to participate at the same time in the ACO PC Flex Model unless otherwise permitted by CMS. An exception is the Guiding an Improved Dementia Experience (GUIDE) Model, which will permit provider and beneficiary overlap with all ACO initiatives, including the Shared Savings Program and the ACO PC Flex Model. Visit the Innovation Center’s model webpage for more information about models focused on other aspects of care.
7. Can ACOs participating in the ACO PC Flex Model receive Advance Investment Payments?
ACOs may not participate in the ACO PC Flex Model and also receive Shared Savings Program Advance Investment Payments (AIP).
8. What is a low revenue ACO?
The Shared Savings Program regulations define “low revenue ACO” under 42 CFR § 425.20 as an ACO whose total Medicare Parts A and B fee-for-service revenue of its ACO participants, based on revenue for the most recent calendar year for which 12 months of data are available, is less than 35% of the total Medicare Parts A and B fee-for-service expenditures for the ACO’s assigned beneficiaries, based on expenditures for the most recent calendar year for which 12 months of data are available. These low revenue ACOs often face greater financial challenges than high revenue ACOs with expanding access to high-quality primary care, because they tend to be less capitalized, more risk-averse, and less likely to take on performance-based risk than high revenue ACOs.
9. How will CMS ensure that enhanced capitated payments are used to improve primary care?
The model includes policies specifically designed to ensure that PPCPs made to ACOs flow to the ACO’s primary care providers and are used to support primary care. For example, the ACO PC Flex Model includes quarterly short-form spend reports and spend plan public reporting to make sure enhanced capitated payments are used for their intended purpose — to improve primary care. As part of the application and prior to subsequent performance years, ACOs will be required to submit a spend plan describing their intended use of the PPCP with percentage allocation to spend categories, subcategories, and types. The ACO PC Flex Model will include PPCP allocation proportion requirements for defined spend categories to ensure the majority of funds are spent on permitted uses related to the provision and support of advanced primary care. The ACO PC Flex Model spend categories and guardrails were informed by the approach being used for AIP in the Shared Savings Program, previous Innovation Center advanced primary care models that included reporting, input from interested parties, and the literature on advanced primary care.
10. How does the ACO PC Flex Model support the Innovation Center’s goal to drive accountable care?
Improving primary care is a cornerstone of the Innovation Center’s strategy to increase access to high-quality, person-centered care. The ACO PC Flex Model strengthens incentives for more providers to form ACOs in previously underserved areas and increase the number of people with Medicare who are in an accountable care relationship.
11. Is the model affiliated with HRSA’s Medicare Rural Hospital Flexibility (Flex) program?
No. HRSA’s Flex program provides funds to states for technical assistance to Critical Access Hospitals (CAHs). HRSA’s Flex program has no relation to the ACO PC Flex Model.
12. Is the ACO PC Flex Model affiliated with the Primary Care First Model?
No. The Primary Care First Model has no relation to the ACO PC Flex Model.