Policy Update: Introducing CMS’s New ACO Primary Care Flex Model, Medicare Payment Updates

April 3, 2024

The introduction of the new ACO Primary Care Flex Model has the potential to have a profound impact on value-based care in the United States. In our April update, we focus on Flex and updates involving both Medicare payments, Medicare Advantage and state policy. 

CMS announces the ACO Primary Care Flex Model

After years of Aledade advocating for the Medicare Shared Savings Program (MSSP) to be the chassis for innovation on which the CMS Innovation Center builds, the federal agency has now announced the Flex Model. This model’s central element is the requirement for dual participation in MSSP. Flex will test whether improved payment for primary care enables participating ACOs to focus even more on team-based, person-centered and proactive approaches to care. Flex also will test whether these improved payments – given through monthly and enhanced allotments – positively impact health outcomes, quality and costs of care. Additionally, the model has a one-time infrastructure payment to the ACO. 

A note on FQHCs and RHCs: CMS recognizes that FQHCs and RHCs are paid differently and has noted that prospective payments will be structured differently to factor that difference into account. CMS will be performing a beneficiary level adjustment for FHQCs and RHCs. While we do not yet know the specifics of what that adjustment looks like or how it will be determined, we have asked CMS to publish that information as soon as possible. 

We will continue to share more details on Flex as we learn more in the coming weeks and we are here to help your ACO evaluate the different variables so you can determine if the model is right for you. Read our summary here and check out our webinar

Medicare Fee Schedule Payment Updates

On March 9, President Biden signed the Consolidated Appropriations Act, 2024, which included a 2.93% update to the CY 2024 Physician Fee Schedule (PFS) Conversion Factor for dates of service March 9 through December 31, 2024. Therefore the conversion factor for CY 2024 for dates of service January 1 through March 8, 2024 is $32.74 and the conversion factor for March 9 through December 31 is $33.07. CMS is also releasing updated payment files, including the Medicare Physician Fee Schedule and associated abstract files, the Ambulatory Surgical Center Fee Schedule, and Anesthesia file. You can find more information here.

CMS Releases Medicare Advantage Rate Notice 

On April 1, CMS finalized proposed changes to the Medicare Advantage plan capitation rates and Part C and Part D payment policies for calendar year 2025. The rate notice implements expected changes to the Part C risk adjustment model that were finalized in last year’s rule, in addition to providing technical updates to the methodology for calendar year 2025. 

State Policy Corner

Many of our states with policy programs are in active legislative sessions. We are seeing progress across the nation on initiatives that we have actively supported, such as prior authorization reform. Similarly, we will be hosting our next National Policy Collaborative in May that will focus on administrative burden reduction. For more information, be on the lookout for email updates from your state policy leads.

In Maryland, Senate Bill 079, and its companion legislation House Bill 0932, would reform prior authorization in the state. Measures within the bill would, among other provisions, require insurance carriers to establish and maintain an online process for prior authorization and alter current requirements for prior authorizations for specific prescriptions. Both bills have been reported favorably out of their respective committees and are positioned for a second reading by their respective chambers. The 2024  legislative session ends on April 8th so we will be tracking these bills closely.