The ACO Primary Care Flex
The Centers for Medicare & Medicaid Services (CMS) recently announced the ACO Primary Care Flex Model (ACO PC Flex), a new initiative that layers primary care capitation on top of the existing Medicare Shared Savings Program (MSSP). The model pushes for more direct primary care incentives within an ACO construct by introducing prospective primary care payments – which appear similar to what CMMI is testing in the ACO REACH primary care capitation option – along with more explicit transparency and oversight into how ACOs are distributing those funds.
The Financial Flex
The model introduces a "flex" in the way ACOs receive funding for primary care. Here's how it works:
One-Time Advanced Shared Savings Payment: All selected ACOs will receive an upfront Advanced Shared Savings Payment of $250,000 to support startup and infrastructure costs.
Monthly Prospective Primary Care Payments (PPCPs): This replaces the traditional fee-for-service payment system; ACOs will receive predictable monthly payments based on county-average primary care spending and specific patient population characteristics. There will be two parts to the payments: Base County Rate and the Enhanced Rate. ACOs will be responsible for distributing PPCPs to their primary care providers and will be encouraged to do so on a capitated basis.
Here are five things to know and five things to watch for as CMS continues to release details of the new model.
Five Things to Know
The model is only available to “low revenue” MSSP ACOs: To be considered low revenue, the ACO providers’ total Part A and B revenue (that’s all Medicare fee-for-service revenue, not just from services delivered to your ACO patients!) must be less than 35% of the total spend for the ACO’s attributed population.
ACOs that wish to participate in Flex must be starting an MSSP agreement period January 1, 2025: The ACO could be brand new, finishing its old agreement period in 2024, or opting to renew early.
ACOs can participate in any financial track of MSSP: The model is open to all levels of the Basic Track and the Enhanced Track. The model does not change anything about the benchmarking methodology or shared savings and loss rates of the current available MSSP tracks.
The County Base Rate portion of the PPCP will not be reconciled against actual claims and it will be included in ACO expenditure calculations.
ACOs will not be subject to risk on the Enhanced Amounts of their total PPCP: CMS states that these enhanced amounts “will not be recouped by CMS as part of performance-based risk arrangements.”
Five Things to Watch
How will RHC/FQHC PPCP payments work? CMS acknowledges that the PPCPs will need to work differently for RHCs and FQHCs as they do not bill via traditional Part B professional services (which is how CMS will identify claims for the PPCP reduction/capitation payments for non-RHC/FQHC participants) and we are eagerly awaiting more details on how CMS will adjust the model to encourage participation from these provider types.
How prescriptive will CMS be about how PPCPs are distributed? Based on the limited information available so far, it appears that participating ACOs will be required to submit spend plans and regular reports to CMS on how the PPCP funds are being distributed. Beyond that, we don’t know much yet.
Will CMS reconsider its policy of excluding “high revenue” ACOs? Even amidst the widespread support for this new model, stakeholders have questioned CMS’ decision to exclude high revenue ACOs. Given how much the designation can depend on an ACO’s providers’ Tax Identification Number (TIN) structure (e.g., whether a hospital and ambulatory clinics bill under the same TIN), this may be an area that CMS wants to take a closer look at to ensure the model is available to the intended prospective participants.
Will enhanced rates be recouped out of shared savings? CMS has stated that ACOs will not be at risk for the enhanced portion of the PPCP but the phrasing seems to leave room open for potential recoupment of those funds if the ACO generates shared savings. We may be reading too much into that wording but regardless, ACOs will want to make sure they know how the flex payments will affect their expenditures when considering participation.
What will uptake be and how will it affect participation in other CMMI models? With MCP agreement deadlines fast-approaching and the now annual surge of practice recruitment for MSSP and ACO REACH already underway, it will be interesting to see how this new model (which appears to be a one-time opportunity) will shake up those already wild and frantic decision-making timelines.
With a CMS webinar scheduled for next week and a Request for Applications expected later this spring, stay tuned for more details!
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