New CMS Models – AHEAD and ACO Flex – Promising Opportunities for Better Quality Care and Health Equity 

In September 2023 and March 2024, CMS announced two new care models – the States Advancing All-Payer Health Equity Approaches and Development Model (AHEAD Model), and the ACO Primary Care Flex Model, respectively – that offer promising opportunities for better care delivery, outcomes, and health equity for people with serious illness.

The goal of the AHEAD Model is to collaborate with states to curb healthcare cost growth, improve population health, and advance health equity by reducing disparities in health outcomes at the state and federal level. One of the major tenants of this model focuses on reducing the rate of growth in healthcare spending by developing a different reimbursement structure for hospitals in participating states. This will ensure a cap on hospital spending that is outpacing the overall total that states are spending. One of the drivers of hospital spending relates to preventable and unnecessary visits to the hospital by people with serious illness who do not have an alternative to accessing timely care at home or in the community.

The Center for Medicare and Medicaid Innovation (CMMI) plans to select up to 8 states in three cohorts for an 11-year demonstration process with the first cohort of states beginning implementation in July 2024. All states will start with 18 months of planning to collect community feedback related to areas of focus to expand health equity and data collection. This gives states enough time to revise state regulations needed to operationalize their pilots, introduce new legislation or new waivers that would support their strategic plan, and introduce waiver initiatives. In addition, states may receive up to $12 million from the Centers for Medicare & Medicaid Services (CMS) to design and implement their model, and a federal match for the payment changes that they make. This provides states with resources to support their plans through community infrastructure investments and to lower the cost of healthcare, an anticipated as an outcome of this pilot.

Building on the successes of previous total cost of care models, states will be required to change the payment structure for participating hospitals and to work with at least one private payer to revise their payment and reimbursement structures. The penultimate goal is to establish an all-payer or global budget type payment model and to work with communities to shift services delivered in the hospital to other care settings, such as at home or in the clinic. This model would impact Medicaid beneficiaries, dually eligible beneficiaries, and individuals who are covered by one or more private payers. Of note, the model does not include changes to the reimbursement structure for specialists, so states may encounter issues related to unregulated and expensive specialty payments (e.g., oncology or cardiology) and will need to address them. This provides additional opportunities for providers caring for people with serious illness to partner with the state, hospitals, and communities to achieve the goals under this model by increasing access to advance care planning, palliative care services, community health integration, and hospice care.

To achieve their goals, states cannot simply lower overall hospital costs, while creating lower quality care. Health equity requirements built into the model include a state health equity plan, adjusting payment rates according to people’s health and social risk factors, and bonus payments for hospitals who meet equity and performance targets. States are required to develop a new measurement framework and track measures related to prevention and wellness, chronic condition management, behavioral health, and quality of care. States also must develop a population health strategy that includes people’s experience of care through the Consumer Assessment of Healthcare Providers and Systems(CAHPS), creating a standardized way of tracking social determinants of health and the level of chronic conditions in their population. This directly impacts how states and health systems identify and deliver care to vulnerable populations, including those with serious illness and their caregivers, across the continuum of care.

Similarly, the ACO Primary Care Flex Model aims to grow participation in ACOs and the Shared Savings Program and increase the number of Medicare beneficiaries in an accountable care relationship. To be eligible to apply, ACOs must participate in the Shared Savings Program and be a low revenue ACO. This aims to impact people in rural communities most often, where value-based care has been slow to be adopted because of low healthcare volume. People with serious illness in these regions have struggled to receive adequate care, as their providers often do not have the resources to address their needs holistically. This model aims to change that.

Specifically, the goals of the ACO Flex Model are to:

• Expand access to high-quality, accountable care and improve the patient experience for people with Medicare.
• Enhance primary care payment and spur innovative approaches to care delivery.
• Narrow disparities in healthcare outcomes.
• Reduce program expenditures while preserving or enhancing the quality of care for people in the Shared Savings Program.
• Strengthen participation incentives for new and low revenue ACOs in the Shared Savings Program.

Set to begin January 1, 2025, ACO Flex is a 5-year model within the Shared Savings Program that features a Prospective Primary Care Payment (PPCP) option designed to shift payment for primary care away from fee-for-service to value-based payment. The PPCP consists of a County Base Rate (based on a county’s average primary care spending) and Payment Enhancements to enable ACOs to increase access to primary care, support the provision of care, and improve care coordination. The model also includes a one-time Advanced Shared Savings Payment to help cover costs associated with forming an ACO and administrative costs for model activities. This will allow practices to increase competency in things like advance care planning and screening for health-related social needs and to add nursing, social work, and other resources to improve care coordination and address a person’s needs.

The ACO Flex model addresses health equity through its favorable payment structure, which is attractive to ACOs with Federally Qualified Health Centers and Rural Health Clinics. Moreover, the model will improve health equity and outcomes for underserved populations by:

• Increasing access to higher-quality primary care.
• Aligning more Medicare beneficiaries to ACOs by incentivizing the formation of new ACOs, supporting existing ACOs, and attracting safety net providers, including FQHCs and RHCs to either form or join ACOs.
• Directing healthcare dollars toward underserved populations.
• Providing primary care practices with flexible funding necessary to improve care coordination and identify and address people’s unmet health-related social needs.

For people with serious illness, care coordination and caregiver support are critical. However, the limiting factor in increasing access to these services has historically been payment to augment staffing, increase provider competency, and adjust clinical workflows. With revised payment and infrastructure support for participating providers and states, these models have the opportunity to improve care significantly for those in need of extra support in the community and at home. As both the AHEAD Model and ACO Primary Care Flex Model get underway, we will be watching to see if these new models deliver on improved care delivery, health outcomes, and health equity.