ACOs looking to make greater investments in, and receive prospective payments for, advanced primary care services may want to consider the recently announced ACO Primary Care Flex Model.

Starting in 2025, CMS is offering advance shared savings payments and enhanced prospective primary care payments for up to 130 MSSP ACOs through PC Flex. Just how much CMS will enhance primary care payments is not yet known; we expect that additional details on this and other parameters for the model will be released in the forthcoming request for applications. While this model may not be the right fit for all ACOs, we anticipate it will garner significant interest.

What are the key features of ACO Primary Care Flex?

ACO Primary Care Flex Model (PC Flex) is a voluntary five-year program running from 2025 through 2029 and a relatively simply payment model structure compared to other Center for Medicare and Medicaid Innovation (CMMI) models. The Centers for Medicare and Medicaid Services (CMS) will make a one-time advance shared savings payment of $250,000 to each model participant and replace primary care fee-for-service (FFS) payments with monthly prospective primary care payments (PPCPs). To establish the monthly PPCPs, CMS will use a county-level Rate Book derived from three years of historical primary care spending. Enhancements will be made to the PPCPs based on characteristics of the accountable care organization (ACO). CMS also announced they will make an upward adjustment to counties with low levels of historical spending relative to national averages. Additionally, CMS will apply an enhancement to all participating ACOs regardless of location or utilization, intended to increase investment in primary care. CMS will adjust the PPCPs based on “operational, payment, and health equity goals.” This will include beneficiary-level adjustments for Federally Qualified Health Center (FQHC), or Rural Health Clinic (RHC) assigned beneficiaries.

CMS has explicitly stated that the “PPCP will increase primary care funding for most model participants.”¹ While these enhancements may sound promising on the surface, CMS has not provided any indication of the level of these enhancements. Additionally, there will be guardrails in place to ensure enhanced funds are used appropriately; details on these model parameters have yet to be released.

Which ACOs can apply for PC Flex participation?

To be eligible for PC Flex, an ACO must establish a new MSSP agreement period for 2025, be classified as a low-revenue ACO,² and elect prospective assignment. This complicates participation for ACOs not planning on renewing in 2025 or currently electing retrospective alignment, as these provisions could materially change the ACO’s financial benchmark. ACOs currently receiving Advance Investment Payments (AIPs) under Medicare Shared Savings Program (MSSP) or participating in other Innovation Center shared savings initiatives like ACO Realizing Equity, Access, and Community Health (REACH), are not eligible for PC Flex.

What types of ACOs will find PC Flex most attractive?

At this point, it is difficult to determine which ACOs will find PC Flex attract but until more details are released in the request for applications (RFA). The most likely candidates for this program are ACOs with primary care expenditures lower than the average primary carespending levels in their region, or those in counties with historically low amounts of primary care spending. We expect for these ACOs the PPCP will increase primary care funding relative to their historical primary care revenue. The enhanced payments will need to exceed any potential negative benchmark impact that starting a new agreement period in 2025, or electing prospective assignment, might have on their financial benchmarks and/or the additional administrative burden of participating in the program. Given the the short timeline to make some of these decisions, we recommend ACOs develop an analysis and decision-making plan to evaluate this opportunity.

What does the application process look like and how can my ACO make an informed decision about participating?

CMS plans on releasing the RFA sometime in the second quarter of 2024. Medicare ACOs need to either apply or renew in a new agreement period starting in 2025 and elect prospective attribution by June 17. ACO PC Flex applications will be due in August 2024. We see a couple challenges for ACOs interested in this program. Firstly, essential details about primary care payment enhancements are unlikely to be available until the RFA is released and an exact RFA release date has not been specified. The lack of specifics about how the program will work makes it difficult to evaluate the opportunity with any level of certainty. Secondly, although the PC Flex application is not due until August, the MSSP application is due in mid-June. In light of this, Medicare ACOs will need to quickly assess payment model details upon the RFA release and make a decision about whether to participate. Alternatively, ACOs can implement a strategy where they keep their options open by opening an application for an early renewal even if they are uncertain they will pursue the PC Flex application process. This will give ACOs additional time to make the most informed decision.

Please reach out to your Milliman consultant if you need help evaluating the PC Flex program. CMS provides additional details and highlights in its overview, fact sheet, FAQ, and webinar.

¹ CMS (April 4, 2024). Accountable Care Organization Primary Care Flex Model (ACO PC Flex): Model Overview Webinar. Retrieved May 8, 2024, from https://www.cms.gov/files/document/aco-pc-flex-overview-webinar-slides.pdf.

² CMS defines "low-revenue ACO" as an ACO whose combined Medicare Parts A and B fee-for-service revenue from its participants amounts to less than 35% of the total Medicare Parts A and B fee-for-service expenditures for the beneficiaries assigned to the ACO, within the most recent calendar year.