CMS Launches Model To Increase Primary Care Investment In Medicare

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Dive Brief:

• The Biden administration is launching a new model aimed at improving primary care for Medicare beneficiaries.
• The five-year voluntary model, called ACO Primary Care Flex, will provide a one-time advance payment and monthly prospective payments to accountable care organizations, the CMS said Tuesday. The advanced payments will help ACOs invest in infrastructure and care design, while the prospective payments will be distributed to primary care practices.
• Value-based care and physician interest groups cheered the model for creating a more stable cash flow for physician groups, though some aired concerns it would exclude certain providers. ACO Primary Care Flex will begin January 2025, and will be folded into the Medicare Shared Savings Program, a major value-based payment program in Medicare. 

Dive Insight:

The new model will incentivize team-based care approaches to care management, while giving primary care clinicians more flexibility to target the care of their patient populations, according to the CMS.

“People whose primary care provider participates in the ACO PC Flex Model may get care in more convenient ways, like care based at home or through virtual means, extra help managing chronic diseases, and more preventive health services to keep them healthy,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

The model will give primary care physicians prospective payments each month, as compared to receiving shared savings at the end of a given performance year. That fee schedule has been criticized as being difficult to sustain primary care practices, which frequently operate on tight margins.

Shifting to prospective payments will give primary care practices a more stable and predictable cash flow, said National Association of ACOs President and CEO Clif Gaus in a statement on the new model.

However, Gaus asked the CMS to reconsider excluding high-revenue ACOs from the model. ACO Primary Care Flex will be comprised of “low-revenue ACOs,” a technical term meaning ACOs with total revenue from Medicare’s hospital and outpatient benefit that’s less than 35% of what Medicare is spending on their assigned beneficiaries.

Those models tend to be smaller and mainly made up of doctors, according to physician groups. The exclusion “prevents independent primary care practices who have partnered with their local health systems” from participating, Gaus said.

The CMS plans to select around 130 ACOs to participate in the model. ACOs must first participate in the Medicare Shared Savings Program. Applications will open in the second quarter this year, the CMS said.

The model will be run by the Center for Medicare and Medicaid Innovation, which was formed by the Affordable Care Act over a decade ago to test new ways of paying for healthcare. CMMI’s goal is to bring all 34 million beneficiaries in traditional Medicare into value-based arrangements by 2030.