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CMS has just announced an exciting new accountable care model called ACO Primary Care Flex (ACO PC Flex, or just Flex), starting January 1, 2025. The Flex model is nested inside of the Medicare Shared Savings Program (MSSP) model, but it has some important differences from traditional MSSP. CMS’ goals for the Flex model include expanding primary care access, improving funding for primary care while reducing overall Medicare expenditures, and increase participation in MSSP. Interested organizations will need to apply to the Flex model and CMS will ultimately select 130 ACOs for participation.
Benefits of ACO Primary Care Flex Model
ACOs participating in Flex will also participate in MSSP. While the program rules for MSSP will apply to these ACOs, participation in Flex provides some additional benefits related to how ACOs and their participant providers are paid. First, each Flex ACO will receive a one-time, up front advance shared savings payment of $250,000. This payment is designed to help cover the costs of forming an ACO, plus administrative costs for model activities. Second (and likely most impactful) is a move away from compensating providers for primary care under a FFS model and towards capitation. ACOs will receive a monthly capitation payment for all aligned patients. This cap payment will include a base rate determined by the average primary care spend in the county (with risk adjustments) and an enhanced cap payment ACOs will use to support additional primary care services.
ACO Payments Under the Flex Model
The benefits to an ACO of these payments under the Flex model can be immense. New ACOs are often strapped for cash and can have trouble funding ACO activities while they wait for their first shared savings check that comes late the next year. The advance payment will be recouped out of any shared savings an ACO earns, but it can be very helpful as a source of working capital until initial shared savings payments are made. The consistent, monthly capitation payments provide a stable revenue stream for PCPs in the ACO. Providers can spend more energy on patient care and less on worrying about practice cash flow. While the base capitation amount will count towards ACO expenditures for determining shared savings, the enhanced capitation will not. ACOs are free to invest those funds in primary care without the worry of it impacting their shared savings.
Requirements for Flex ACOs
While there are significant benefits to participation in the Flex model inside of MSSP, there are things ACOs should be aware of as they consider whether to apply. First, because the Flex model is available only to “low revenue” ACOs, participating ACOs likely cannot include large health systems as participant providers. Second, because Flex ACOs will be paid for primary care services directly from CMS, they will need a mechanism in place to be able to pay providers on a regular basis. This means not only having a solution in place to physically pay providers (e.g., cutting checks) but also a payment methodology in place that compensates providers in a way that drives ACO goals. Lastly, ACOs in the Flex model will have additional administrative requirements placed on them in addition to those already in place for MSSP. We’ll learn more about these when CMS releases the RFA, but it is a safe assumption that Flex ACOs will have operational and financial reporting requirements that need to be planned for.
Apply for the Primary Care Flex Model
Even with the additional requirements that need to be considered, the Flex model represents an exciting opportunity for ACOs. New and existing ACOs should strongly consider submitting applications when they open later this year.
If you would like to discuss the new Flex model further – or anything ACO related – please book some time to talk. If you are attending the NAACOS Spring Conference, you can book an in-person meeting with us there. As always, we have a wealth of ACO information available on our website.
Author:
John Dickey | COO, Acclivity Health Solutions
