Top 5 Questions: New ACO Primary Care Flex Model

Primary care is a cornerstone of achieving various goals set by the Centers for Medicare & Medicaid Services’ Innovation Center (CMMI). Taking lessons learned from years of models tested, CMMI has found that increasing stable revenues and including upfront investment to develop advanced primary care capabilities are important elements.

With that in mind, CMMI announced a new model called the Accountable Care Organization (ACO) Primary Care Flex model.

What is the ACO PC Flex Model?

It is a primary care focused five-year voluntary model to be tested within the Medicare Shared Savings Program (MSSP). It will begin January 1, 2025. The aim is to incentivize more low revenue ACOs in the MSSP. Low revenue ACOs tend to be comprised of physicians, small hospitals or those that serve rural areas.

The model will include monthly prospective primary care payments (to replace fee-for-service), visit-based payments and a one-time advance to help cover costs associated with ACO start-up and administration. It also includes quality measures and a health equity focus, including looking to increase participation in the MSSP by those who serve underserved populations, such as rural health clinics (RHCs) and Federal Qualified Health Centers (FQHCs).

The model is limited to 130 participants.

Who Can Participate in the Model?

The model is open only to low revenue ACOs that are new entrants, renewals or current ACOs that start a new agreement in the MSSP. This includes both the Basic or Enhanced tracks of the MSSP. Participation is at the ACO level. As a reminder, the following are some examples of provider/supplier types that can participate in MSSP ACOs: physicians, hospitals, Critical Access Hospitals, FQHCs, RHCs etc.

What is a Low Revenue ACO?

Low revenue ACOs are defined under the MSSP program. These are ACOs where total Medicare Parts A and B FFS 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. Basically, this is a ratio that looks at the total FFS revenue for all TINs involved in the ACO for both their assigned and unassigned beneficiaries as compared to the Parts A/B expenditures for just the ACO’s assigned beneficiaries. Those ACOs with less than 35% are low revenue. Thirty-five percent or more are considered high revenue.

How Do Payments Work?

The model provides two main types of payments. The first is a one-time shared savings advance to all participating ACOs of $250,000. Funds can be used for costs to form an ACO or required model activities or administration.

The second payment is what is being called the “prospective primary care payment” or PPCP. It is a monthly capitation payment for primary care services and will replace FFS payments. Providers will still submit claims per usual, but CMS will “zero” those out. The PPCP is intended to serve as a stable, ongoing payment that helps encourage more team-based, person-centered and innovative care delivery.

The PPCP is a prospective, population-based primary care payment. The PPCP includes four components:

1. County base rate. The PPCP starts with a county base rate which is derived from the average county spending for primary care. A rate book will be created. There will be separate rates created for end stage renal disease (ESRD) and non-ERSD patients. The county rate will be risk standardized and all ACOs will receive the same county base rate for the counties they participate in.
2. Enhanced amount. The PPCP could then potentially see two enhanced amounts added: a county enhancement and a flex enhancement. The county enhancement is for counties with low primary care spending compared to national spending. The goal here is to increase primary care spending in underserved areas. The flex enhancement will be applied to all ACOs to enhance advanced primary care services.
3. Adjustments. Then the PPCP will be adjusted, if needed, to address specific situations, such as health equity and a beneficiary level adjustment for those who receive the plurality of primary services at an FQHC or RHC.
4. Trending. The final step for the PPCP will be to trend that amount forward using what’s called the “primary care prospective administrative trend.”   

What Are Next Steps?

As with all models when they are initially released, far more details come out with the Request for Application (RFA). The RFA is expected this spring, after which the application process will begin.

However, remember that one of the requirements to participate in the ACO PC Flex model is that you must also be in the MSSP.  The next MSSP application window opens on May 20, 2024, and will close on June 17, 2024.

In the meantime, you can find more information on:

• ACO PC Flex ACO Primary Care Flex Model | CMS
• MSSP Shared Savings Program | CMS

As always, reach out to CLA if you need assistance. We’re here to help.