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What’s next for ACOs? CMS announces full details on the Flex Model
June 12, 2024

Applications are now open for the new Primary Care ACO Flex Model. What might that mean for your ACO?

By Casey Korba, Director of Policy

The Flex model builds on a decade of learning from the Medicare Shared Savings Program (MSSP) and early primary care models tested by the CMS Innovation Center.  MSSP is the permanent, flagship Accountable Care Organization (ACO) program that has generated more than $1.8 billion in savings while improving the quality of care received by Medicare beneficiaries. Flex will test whether providing ACOs with an advance on shared savings and paying for primary care within ACOs based on an enhanced, prospective payment, in lieu of traditional fee-for-service payments, will enhance participation in ACOs. Flex also will test whether these ACOs have the ability to generate cost savings and care improvements for Medicare beneficiaries. 

Flex aims to address the cash flow issue in MSSP while improving access to primary care

One of the longstanding challenges to the ACO model has been the delay between the time when providers improve care for Medicare beneficiaries and when they receive their payment for this work, which is typically late in the following year. Flex is an attempt to improve the cash flow in ACOs to encourage more physicians to participate and to improve the ability of ACOs to increase investment in care improvements.

Flex will consist of three new payments:  

  • A fixed one-time $250,000 payment to the ACO as an advance on shared savings.
  • A Prospective Primary Care Payment (PPCP) that CMS will pay the ACO on a monthly basis consisting of two pieces:
    • The County Base Rate, which will cover basic primary care services and be paid in lieu of normal fee-for-service billings by primary care practices. Because this rate is set as the average amount of spending for primary care in each county, by itself, the county base rate will be an increase in payment for some practices, but a decrease for others.  
    • The Enhanced Rate, which will supplement the county rate for all ACOs. Practices from the lowest spending counties will receive an additional enhancement. This enhanced payment will also be adjusted upward for beneficiaries living in historically underserved communities financed through downward adjustments for beneficiaries in communities that have not suffered deprivation.  

Shared savings for MSSP remains in place–the timing and calculation is the same for Flex and non Flex participants. ACOs participating in Flex will continue to submit claims for all services they provide, and CMS will zero out the claims for primary care services (evaluation and management services performed by the primary care practices, including Annual Wellness Visits, Transitional Care Management, Chronic Care Management, etc.) for beneficiaries assigned to the ACO. Practices will continue to bill and get paid for services such as vaccines, labs and procedures. For Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs), the payment structure applies as described, but CMS acknowledges that because these clinics spend more on primary care historically, there is an add-on amount per patient per year for patients who receive care through FQHCs and RHCs. 

What are the goals of paying ACOs differently and paying some of the money in advance?

Reducing dependence on the emergency department and urgent care is good for patients and reduces cost. We also know that encouraging a longitudinal relationship between the beneficiary and the primary care practice leads to better health outcomes. In addition to having the PPCP adjusted for both risk and health equity, CMS will make adjustments for primary care that the assigned beneficiary receives outside the ACO (i.e. when the patient is traveling, or goes to urgent care). Because CMS will be paying fee-for-service on that claim, that adjustment accounts for that discount. This adjustment is based on patient history and CMS will revisit it two years after the model begins, so that ACOs that improve on this metric will receive increases to their payment amounts. 

What makes Flex, which requires MSSP participation, so attractive, is that the core elements of  MSSP are baked into the model. This means that participating practices face few additional requirements to participate in Flex beyond the core work they are performing in MSSP. The quality reporting remains the same, with one additional Patient Reported Outcome Performance Measure in the form of a beneficiary survey that CMS will administer. 

What should ACOs be considering when considering participation in Flex?

  • Assessing the financials: To help ACOs with their decision as to whether to apply, Aledade is working with our member ACOs to assess participation based on the following factors:
    • their individual financials;
    • historical primary care spend; 
    • any rebasing impact; and 
    • effects on practices with robust Chronic Care Management programs, among others. 
  • Timing: The application period is now open, and the deadline for phase 1 (which is submitting a questionnaire) is August 1. The model launches January 1, 2025 and will run five years, through December 31, 2029.  
  • Decision is at the ACO level: Because the decision to participate in Flex is at the ACO level and not at the practice level, practices in participating ACOs that do not want to join Flex can join another ACO that is not participating, or the ACO can design a payment program that works for these practices. For example, an ACO can receive Flex funds and continue to pay fee-for-service.  
  • Because Flex and MSSP in general aim to innovate care at the ACO level, Flex implementation will look different from ACO to ACO. Consider what new partnerships and initiatives your ACO could implement with the additional funding from participation.

For a deeper dive on what is in the Flex application and the process for applying, watch our webinar. Enrollment is now open to join an Aledade ACO, and we are accepting applicants for the ACO PC Flex Model. Learn more here.