ACO Primary Care Flex Model Frequently Asked Questions

General FAQs

  • What is the Accountable Care Organization Primary Care Flex (ACO PC Flex) Model?
     
    The ACO PC Flex Model is a 5-year voluntary primary care payment model that is being  tested within the Medicare Shared Savings Program (Shared Savings Program), which began January 1, 2025. ACOs that participate in the ACO PC Flex Model (PC Flex ACOs) will jointly participate in the Shared Savings Program.

    The ACO PC Flex Model seeks to reduce program expenditures and improve quality of care and health care outcomes for Medicare beneficiaries through the alignment of financial incentives for primary care, an emphasis on flexibility and primary care innovation, and strong monitoring to ensure that beneficiaries receive access to high-quality, person-centered primary care. The model tests whether alternative payment for primary care services will empower ACOs participating in the Shared Savings Program and their primary care providers to use more innovative, team-based, person-centered, and proactive approaches to care that positively impacts health care outcomes, quality, and costs of care.

    The model provides more flexibility in the use of funds for primary care providers (defined in Section 8.04 of the ACO PC Flex Participation Agreement), increases resources for primary care, and strengthens incentives for organizations to participate in the Shared Savings Program. This includes, for example, newly formed low revenue ACOs and ACOs that include federally qualified health centers (FQHCs) or rural health clinics (RHCs) as ACO participants.

  • 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 fee-for-service Medicare. 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 Advance Shared Savings Payment and monthly Prospective Primary Care Payments (PPC Payment).

    The Advance 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 Advance Shared Savings Payment amount.

  • How does the ACO PC Flex Model impact Medicare beneficiaries? 

    Beneficiaries with Traditional Medicare retain all of their rights, coverage, and benefits, including the freedom to see any Medicare health care provider. Like previous ACO models, ACO PC Flex Model requires ACO participants to make medically necessary covered services available to beneficiaries in accordance with applicable law and prohibits restricting a beneficiary’s freedom to choose where he or she receives care.  Even if a beneficiary is assigned to an ACO participating in the ACO PC Flex Model, they always have the freedom to see any Medicare-enrolled provider or supplier.

    CMS expects that beneficiaries whose primary care provider is part of an ACO participating in the ACO PC Flex Model will see and feel improvements in the quality and experience of care they are getting because of the ACO PC Flex Model. We refer to this model test as the ACO PC Flex Model given the flexibility in care delivery enabled by the PPC Payments. This includes flexibility to coordinate primary care delivery and enhance coordination with specialists. The PPC Payment rate is derived from the average county primary care spending and amplified by payment enhancements based on characteristics of the ACO and the assigned patient population. Deriving the rate from average county spending rather than the historical volume of services rendered by an ACO is a critical feature for increasing payment for primary care and supporting flexibility in how services are delivered. The model tests whether this flexibility would improve the beneficiary experience by allowing providers to arrange for services in a manner that best serves Medicare patients and pays for care management, patient navigation, behavioral health integration, and other care coordination services. Moreover, the health equity-promoting aspects of the model’s payment design are expected to provide greater access for underserved communities, reaching beneficiaries who have not previously received coordinated care.

    If at any time a Medicare beneficiary or their caregiver has concerns about the ACO PC Flex Model, the Innovation Center has a model liaison that is part of the Medicare Beneficiary Ombudsman team in the Offices of Hearings and Inquiries. The model liaison can be reached through 1-800-MEDICARE and will assist in facilitating communications with the Medicare Quality Improvement Organizations (QIOs), the CMS regional offices, and ACO PC Flex Model team to ensure the beneficiary’s concerns are heard.

  • How does the ACO PC Flex Model support the Innovation Center’s goal to drive participation in 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 underserved areas and increase the number of people with Medicare who are in an accountable care relationship.
  • 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.

  • 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.

  • 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 Advance Investment Payments (AIP) under the Shared Savings Program.

  • Will this model qualify as an Advanced or Merit-based Incentive Payment System (MIPS) Alternative Payment Model (APM)?

    Advanced APM status in the ACO PC Flex Model will be consistent with CMS’ Advanced APM determination for each Shared Savings Program risk track, where CMS has determined that Level E of the BASIC track and the ENHANCED track are Advanced APMs for performance year 2025. Eligible providers who are included on the participant list participating in the Level E of the BASIC track or the ENHANCED track will be eligible for Qualifying Quality Program (QPP) Participant (QP) determinations.

  • What is a PPCP-Eligible Participant List?

    The Prospective Primary Care Payment (PPCP)-Eligible Participant List reflects the individuals and entities that CMS approved for participation in the model. For any individual or entity on the list, claims-based payments for PPCP-Eligible Services provided to PPCP-Eligible Beneficiaries are subject to the PPCP Fee Reduction (a 100 percent fee reduction of Medicare claims-based payments for PPCP-Eligible Services provided to PPCP-Eligible Beneficiaries). CMS also uses this list to calculate the PPC Payment.

  • What is the difference between the PPCP-Eligible Participant List and the ACO Participant List or ACO Provider/Supplier List that I send to participate in the Medicare Shared Savings Program?

    The ACO PC Flex Model PPCP-Eligible Participant List is derived from the Shared Savings Program ACO Participant List and includes ACO providers and suppliers associated with ACO Participants (a) in the Provider Enrollment, Chain and Ownership System (PECOS) and (b) billing for primary care services used in assignment of beneficiaries to Shared Savings Program ACOs that CMS has approved for participation in the model and that have agreed to participate in the model. The list is restricted to providers and suppliers who will be subject to a 100% fee reduction of their claims-based payments for primary care services as part of the ACO PC Flex Model. For Performance Year (PY) 2025, PC Flex ACOs have the option to defer participation in the PPCP Fee Reduction for up to 25% of ACO Participants, as reflected in the PY 2025 ACO PC Flex Model Participation Agreement, Section 4.02(E). The PPCP-Eligible Participant List includes ACO Participants that are FQHCs or RHCs and ACO suppliers who are identified as primary care physicians or non-physician practitioners in either PECOS or claims data. Primary care physicians have specialty designations of internal medicine, general practice, family practice, geriatric medicine, or pediatric medicine, while non-physician practitioners include specialty designations of nurse practitioner, clinical nurse specialist or physician assistant.

    The specialty restriction described above means that the PPCP-Eligible Participant List is not the same as the list of ACO providers and suppliers used in Shared Savings Program beneficiary assignment, which includes additional specialist physicians in Step 2 of the assignment methodology. Additional information on the Shared Savings Program assignment methodology can be on the Program Guidance & Specifications webpage (https://www.cms.gov/medicare/payment/fee-for-service-providers/shared-savings-program-ssp-acos/guidance-regulations).

  • Can beneficiaries opt-out of CMS data sharing with ACOs?

    Yes, beneficiaries can opt out of having CMS share their claims data with an ACO PC Flex Model for care coordination and quality improvement purposes at any time by contacting 1-800-MEDICARE and indicating their preference that CMS does not share such data with the ACO.

  • Do beneficiaries retain freedom of choice in this model? Can beneficiaries switch primary care providers?

    Beneficiaries assigned to a participant in the ACO PC Flex Model are in traditional Medicare and retain all of their rights, coverage, and benefits, including the freedom to see any Medicare-enrolled provider or supplier. They may switch health care providers at any time.

Application

  • What is the model timeline?

    The ACO PC Flex Model will be tested over five performance years, from January 2025 – December 2029. Performance years will occur in the calendar years of 2025, 2026, 2027, 2028, and 2029, respectively.

  • How does an organization apply to participate in the model?

    The application period has closed for the ACO PC Flex Model.

  • Will there be another application cohort in the future?

    At this time, CMS is considering options for providing an additional application round. An announcement will be made upon a final decision.

Eligibility

  • Are Medicare Shared Savings Program ACOs that elect to be under preliminary prospective assignment with retrospective reconciliation able to participate in the ACO PC Flex Model, or is this limited to ACOs that elect prospective assignment?

    Yes, both assignment methodologies are permitted in the ACO PC Flex Model.  More information about assignment options and impact on the PPC Payment) may be found in Appendix E of the RFA or Appendix A Section V of the ACO PC Flex Participation Agreement.

  • Must all ACO Participants and ACO Providers/Suppliers in an ACO participate in claims reduction and prospective payment if the ACO participates in the ACO PC Flex Model? Must all NPIs under a TIN participate or may a TIN elect specific NPIs to participate in ACO PC Flex?

    Similar to the Shared Savings Program requirement for “whole TIN” participation, all ACO Providers/Suppliers that provide services on behalf of a PPCP-Eligible Participant participating the ACO PC Flex Model that meet the definition of a PPCP-Eligible Professional must participate in the model. PPCP-Eligible Participants and PPCP-Eligible Provider/Suppliers are subject to PPCP Fee Reductions. In PY 2025, ACOs may defer PPCP Fee Reductions for up to 25 percent of ACO Participants included on the PPCP-Eligible Participant List, as reflected in the PY 2025 ACO PC Flex Model Participation Agreement, Section 4.02(E).

  • Are all non-physician practitioners (NPPs) included in the model, regardless of their specialty?

    Only NPPs designated as primary care NPPs by PC Flex ACOs will be included in the model. Claims for services furnished by NPPs designated as specialty practice NPPs by PC Flex ACOs are not subject to the PPCP Fee Reduction. This process is identified during the submission of the PPCP-Eligible Participant List.

  • 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. One exception is the Guiding an Improved Dementia Experience (GUIDE) Model, for which CMS 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.

  • What is a low revenue ACO? How does my ACO know if it is low or high revenue?

    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.

    The Shared Savings Program provides revenue determinations to ACOs in the ACO Management System (ACO-MS) as part of the Shared Savings Program application process. Eligibility for the ACO PC Flex Model will be based on final revenue determinations provided by CMS during phase 1 final dispositions in October.

    Financial Model

  • How does the Prospective Primary Care (PPC) Payment work?

    The PPC Payment 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 PPC Payment 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 county average primary care spending, and the Enhanced Amount based on characteristics of the ACO and its assigned patient population. For most model participants, CMS expects that the PPC Payment will increase primary care funding relative to ACOs’ historical expenditures.

  • ACOs that participate in the Shared Savings Program receive the PPC Payment 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 add-on payment to the PPC Payment is included for beneficiaries who receive the plurality of primary care services based on allowable charges at FQHCs or RHCs (beneficiaries with FQHC or RHC focused care). Because the all-inclusive payment rate is different for FQHCs and RHCs, there will be a different primary care per-beneficiary per-month (PBPM) add-on amount for each of these settings to encourage FQHCs and RHCs to participate in the ACO PC Flex Model.

    Additionally, we are providing a guardrail for PPC Payment amounts for beneficiaries with FQHC or RHC focused care.  If the ACO’s paid PPC Payment (excluding Flex Enhancement) for these beneficiaries is less than the actual claims reductions (evaluated YTD on a quarterly basis), we will make additional payment in the next available payment cycle to make up the difference.  This means that the payment for these beneficiaries will not be less than actual fee reductions while preserving the Flex Enhancement.  Note that this calculation is done at the ACO level and not at the beneficiary level.

  • How will FQHC Prospective Payment System (PPS) rates be impacted if they participate in ACO PC Flex? Will FQHCs still be able to bill for Care Management Services?

    All claims billed by FQHCs or RHCs for beneficiaries assigned to the PC Flex ACO in which the FQHC or RHC is participating will be considered primary care services and zero-paid.  Claims billed by FQHCs or RHCs for other beneficiaries will be paid normally.

  • How is the Enhanced PPC Payment calculated? Will CMS provide ACOs with the data sources used to calculate the PPC Payment?

    The PPC Payment consists of several components, including the PPC Payment County Base Rate, Add-on amounts for beneficiaries with FQHC- or RHC-Focused Care respectively, the PPC Payment Enhanced Amount, PPC Payment Adjustments, and Primary Care Prospective Administrative Trend (PCPAT).

    The ACO PC Flex PY 2025 Preliminary Rate Book (XLSX) is on the model webpage, the ACO PC Flex PY 2025 Updated Rate Book will be published later this year. To the extent possible, ACO-specific variables, such as the Primary Care Outside of ACO (PCOA) Adjustment factor will be made available to PC Flex ACOs in advance of each performance year.

    Each month, PC Flex ACOs will receive a payment detail report that includes the detailed build up of the PPC Payment at the beneficiary-month level.

  • Is the rate for the prospective payment that is paid to ACO participants by the ACO established by CMS or by the ACO?

    The PPC Payment will be paid by CMS to PC Flex ACOs based on the methodologies described in Section 8, Appendix A, and Appendix B of the ACO PC Flex Participation Agreement. Payment terms for downstream payment arrangements will be negotiated between the PC Flex ACO and the ACO Participants and must be detailed in writing in an ACO participant agreement in accordance with the Section 3.03 and 8.03 of the ACO PC Flex Participation Agreement. PC Flex ACOs will be required to report quarterly the total amount paid to ACO Participants at the TIN or CCN level, and for what purpose.

  • What is the shared savings or shared losses rates in ACO PC Flex?

    PC Flex ACOs are simultaneously participating in the Shared Savings Program, which governs the shared savings and losses rates based on the participation option (BASIC track levels A through E and ENHANCED track) that is selected.

  • How does the county rate get established for multistate ACOs?

    The County Base Rate and County Enhancement, where applicable, are used at the beneficiary level based on the beneficiary’s county of residence. For PC Flex ACOs that span multiple counties or states, the average county rate for the PC Flex ACO is the beneficiary-month weighted average of the county rates of the PC Flex ACO’s assigned, PPCP-Eligible Beneficiaries. In practice, the PPC Payment is calculated at the beneficiary-month level.  PC Flex ACO level averages are not used to calculate payment but may be of interest to PC Flex ACOs for informational purposes.

  • Can the ACO retain a portion of the PPC Payment to invest in infrastructure or does all the PPC Payment money need to be paid out to Participant Providers?

    So long as PC Flex ACOs satisfy the minimum spend requirements described below (e.g., at least 90% of PPC Payment must be spent on Category 1 during performance year 1, at least 95% spent on Category 1 in subsequent performance years), there are no additional restrictions or limitations on when PPC Payment need to be spent by PC Flex ACOs. PC Flex ACOs are not required to spend all PPC Payment each performance year.

    Allowable uses of the PPC Payment are detailed in Section 8.04 of the ACO PC Flex Participation Agreement.  There are three expenditure categories, each with requirements about how much of the PPC Payment must be used for that category:

    Expenditure CategoryFirst Payment YearSubsequent Payment Years
    1. Provision and Support of Advanced Primary Care
    At least 90%At least 95%
    1. Operations of PC Flex ACO
    Not more than 10%Not more than 5%
    1. Prohibited Uses
    0%0%
  • What will financial settlement look like under ACO PC Flex?

    Because PC Flex ACOs will still be participating in the Shared Savings Program, PC Flex ACOs will be subject to the Shared Savings Program financial settlement process codified in federal regulations. At a high level, financial settlement for PC Flex ACOs will compare the performance year benchmark to performance year expenditures to calculate gross savings and losses. The performance year benchmark represents the average Medicare beneficiary total cost of care for assigned beneficiaries and refers to the target expenditure amount that will be compared to Medicare expenditures for items and services furnished to ACO PC Flex assigned beneficiaries during a performance year.  The calculation of the  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).

    Financial Settlement in ACO PC Flex will generally follow the procedures in the Shared Savings Program; however, several adjustments to Shared Savings & Losses calculations are required for ACO PC Flex. Any Other Monies Owed or portion of the Advance Shared Savings Payment determined to be owed as a result of a settlement report or revised settlement report upon reopening shall be paid in accordance with Section 8.06(B) and 8.06(C)of the ACO PC Flex Participation Agreement.

Page Last Modified:
01/17/2025 04:15 PM