- General FAQs
- Applying to the ACO PC Flex Model
- Eligibility and Provider Participation
- Payment and Financial Methodology
General FAQs
What is the Accountable Care Organization Primary Care Flex (ACO PC Flex) Model?
The ACO PC Flex Model is a 5-year voluntary primary care payment model that will be tested within the Medicare Shared Savings Program beginning January 1, 2025. ACOs that participate in the ACO PC Flex Model (PC Flex ACOs) will jointly participate in the Shared Savings Program.The ACO PC Flex Model seeks to reduce program expenditures and improve quality of care and health care outcomes for Medicare beneficiaries through the alignment of financial incentives for primary care, an emphasis on flexibility and primary care innovation, and strong monitoring to ensure that beneficiaries receive access to high-quality, person-centered primary care. The model will test whether alternative payment for primary care services will empower ACOs participating in the Shared Savings Program and their primary care providers to use more innovative, team-based, person-centered, and proactive approaches to care that positively impacts health care outcomes, quality, and costs of care.
The model provides more flexibility in the use of funds for primary care providers (defined in Appendix A of the RFA), increases resources for primary care, and strengthens incentives for organizations to participate in the Shared Savings Program. This includes, for example, newly formed low revenue ACOs and ACOs that include federally qualified health centers (FQHCs) or rural health clinics (RHCs) as ACO participants.How will ACOs and their primary care providers benefit from participating in the ACO PC Flex Model?
Primary care is the foundation of a high-performing health care system and fundamental to improving the health of the United States. ACOs have been limited in their ability to provide advanced primary care because of visit-based payment mechanisms and financial incentives in fee-for-service Medicare. The ACO PC Flex Model will test enhanced and prospective primary care payments to enable more team-based, proactive, and person-centered care by ACOs and their primary care providers. These payments include a one-time Advance Shared Savings Payment and monthly Prospective Primary Care Payments (PPCP).
The Advance Shared Savings Payment is intended to cover costs associated with forming an ACO (where relevant) and administrative costs for required model activities. This payment will not be risk adjusted or based on the number of beneficiaries assigned to an ACO. All ACOs will receive the same Advance Shared Savings Payment amount.
How does the ACO PC Flex Model impact Medicare beneficiaries?
Beneficiaries with Traditional Medicare retain all of their rights, coverage, and benefits, including the freedom to see any Medicare health care provider. Like previous ACO models, ACO PC Flex Model requires ACO participants to make medically necessary covered services available to beneficiaries in accordance with applicable law and prohibits restricting a beneficiary’s freedom to choose where he or she receives care. Even if a beneficiary is aligned to an ACO participating in the ACO PC Flex Model, they always have the freedom to see any Medicare-enrolled provider or supplier.
CMS expects that beneficiaries whose primary care provider is part of an ACO participating in the ACO PC Flex Model will see and feel improvements in the quality and experience of care they are getting because of the ACO PC Flex Model. We refer to this model test as the ACO PC Flex Model given the flexibility in care delivery enabled by the Prospective Primary Care Payments (PPCPs). This includes flexibility to coordinate primary care delivery and enhance coordination with specialists. The PPCP rate is derived from the average county primary care spending and amplified by payment enhancements based on characteristics of the ACO and the assigned patient population. Deriving the rate from average county spending rather than the historical volume of services rendered by an ACO is a critical feature for increasing payment for primary care and supporting flexibility in how services are delivered. The model tests whether this flexibility would improve the beneficiary experience by allowing providers to arrange for services in a manner that best serves Medicare patients and pays for care management, patient navigation, behavioral health integration, and other care coordination services. Moreover, the health equity-promoting aspects of the model’s payment design are expected to provide greater access for underserved communities, reaching beneficiaries who have not previously received coordinated care.If at any time a Medicare beneficiary or their caregiver has concerns about the ACO PC Flex Model, the Innovation Center has a model liaison that is part of the Medicare Beneficiary Ombudsman team in the Offices of Hearings and Inquiries. The model liaison can be reached through 1-800 Medicare and will assist in facilitating communications with the Medicare Quality Improvement Organizations (QIOs), the CMS regional offices, and ACO PC Flex Model team to ensure the beneficiary’s concerns are heard.
- How does the ACO PC Flex Model support the Innovation Center’s goal to drive accountable care?
Improving primary care is a cornerstone of the Innovation Center’s strategy to increase access to high-quality, person-centered care. The ACO PC Flex Model strengthens incentives for more providers to form ACOs in underserved areas and increase the number of people with Medicare who are in an accountable care relationship. How will CMS ensure that enhanced capitated payments are used to improve primary care?
The model includes policies specifically designed to ensure that PPCPs made to ACOs flow to the ACO’s primary care providers and are used to support primary care. For example, the ACO PC Flex Model includes quarterly short-form spend reports and spend plan public reporting to ensure that prospective payments are used for their intended purpose — to improve primary care. As part of the application and prior to subsequent performance years, ACOs will be required to submit a spend plan describing their intended use of the PPCP with percentage allocation to spend categories, subcategories, and types. The ACO PC Flex Model will include PPCP allocation proportion requirements for defined spend categories to ensure the majority of funds are spent on permitted uses related to the provision and support of advanced primary care. The ACO PC Flex Model spend categories and guardrails were informed by the approach being used for AIP in the Shared Savings Program, previous Innovation Center advanced primary care models that included reporting, input from interested parties, and the literature on advanced primary care.
Is the model affiliated with HRSA’s Medicare Rural Hospital Flexibility (Flex) program?
No. HRSA’s Flex program provides funds to states for technical assistance to Critical Access Hospitals (CAHs). HRSA’s Flex program has no relation to the ACO PC Flex Model.
Is the ACO PC Flex Model affiliated with the Primary Care First Model?
No. The Primary Care First Model has no relation to the ACO PC Flex Model.
Can ACOs participating in the ACO PC Flex Model receive Advance Investment Payments?
ACOs may not participate in the ACO PC Flex Model and also receive Advance Investment Payments (AIP) under the Shared Savings Program.
Will this model qualify as an Advanced or Merit-based Incentive Payment System (MIPS) Alternative Payment Model (APM)?
Advanced APM status in the ACO PC Flex Model will be consistent with CMS’ Advanced APM determination for each Shared Savings Program risk track, where CMS has determined that Level E of the BASIC track and the ENHANCED track are Advanced APMs for performance year 2025. Eligible providers who are included on the participant list participating in the Level E of the BASIC track or the ENHANCED track will be eligible for Qualifying Quality Program (QPP) Participant (QP) determinations.
Applying to the ACO PC Flex Model
What is the model timeline? Is there only 1 application cycle for the ACO PC Flex Model?
CMS will offer one application cycle for the ACO PC Flex Model. The ACO PC Flex Model will be tested over five performance years, from January 2025 – December 2029. Performance years will occur in the calendar years of 2025, 2026, 2027, 2028, and 2029, respectively. A Shared Savings Program ACO participating in the ACO PC Flex Model will start a new Shared Savings Program agreement period and will enter into a new Shared Savings Program participation agreement for the performance years January 2025 through December 2029. In addition, the ACO will have a separate ACO PC Flex Participation Agreement for performance years January 2025 through December 2029.
How do Accountable Care Organizations (ACOs) apply for the ACO PC Flex Model?
To apply to the ACO PC Flex Model, an applicant ACO must have applied to the Shared Savings Program. The Shared Savings Program applications were open May 20, 2024 - June 17, 2024.
In addition to applying to participate in the Shared Savings Program, an applicant ACO must also submit supplemental ACO PC Flex Model application information. An ACO can submit the ACO PC Flex application questionnaire using the application portal. The deadline to submit the ACO PC Flex Model application questionnaire was August 23, 2024. ACO PC Flex Model application questionnaires that are not submitted prior to August 23, 2024, will be considered incomplete and will not be considered for participation in the model.
If we apply for ACO PC Flex, is the application binding on our organization?
An application does not obligate your organization to join the ACO PC Flex Model. An applicant ACO may withdraw its ACO PC Flex Model application from consideration at any time prior to signing the ACO PC Flex Participation Agreement with CMS during the signing event from December 6, 2024 – December 12, 2024.
If we withdraw our ACO PC Flex application, will our Shared Savings Program application be affected?
Applicant ACOs can choose to withdraw their ACO PC Flex Model applications without impacting their Shared Savings Program application. A currently participating Shared Savings Program ACO in an existing Shared Savings Program agreement period that applies to and subsequently withdraws its ACO PC Flex Model application may either complete or withdraw its Shared Savings Program application. ACOs can withdraw their early renewal application and remain in their current agreement period prior to Final Application Dispositions, scheduled for December 5, 2024. Additional information on withdrawing a Shared Savings Program application is available in the Shared Savings Program Application Reference Manual (PDF).
When will we hear if we have been accepted?
An applicant ACO will be notified whether CMS has provisionally selected them for participation in the ACO PC Flex Model during the phase 1 final disposition on October 17, 2024. Final determinations are contingent upon eligibility criteria, including Shared Savings Program participation, and will be communicated during final application dispositions on December 5, 2024.
Eligibility and Provider Participation
Are Medicare Shared Savings Program ACOs that elect to be under preliminary prospective assignment with retrospective reconciliation able to participate in the ACO PC Flex Model, or is this limited to ACOs that elect prospective assignment?
Yes, both assignment methodologies are permitted in the ACO PC Flex Model. More information about assignment options and impact on the prospective payment (PPCP) may be found in Appendix E of the RFA.
Must each TIN in an ACO participate in claims reduction and prospective payment if the ACO participates in the ACO PC Flex Model? Must all NPIs under a TIN participate or may a TIN elect specific NPIs to participate in ACO PC Flex?
Similar to the Shared Savings Program requirement for “whole TIN” participation, PC Flex ACOs cannot select which ACO participants or ACO professionals participate in the ACO PC Flex Model. The ACO PC Flex Model fee reductions for primary care services will apply to each PC Flex ACO Participant that includes a primary care provider. CMS will identify the PC Flex ACO Participants and their primary care providers based on the ACO participant list submitted as part of the ACO’s Shared Savings Program application to determine providers eligible for fee reduction. To apply fee reductions, CMS will identify the TIN and CCN (if applicable) of each PC Flex ACO Participant and National Provider Identifiers (NPI) of each eligible primary care provider, such that CMS understands each primary care provider as a TIN/NPI combination. Are all non-physician practitioners (NPPs) included in the model, regardless of their specialty?
Only NPPs designated as primary care NPPs by PC Flex ACOs will be included in the model. NPPs designated as specialty practice NPPs by PC Flex ACOs will not have claims reduced for assigned beneficiaries. The process for an ACO to designate Non-Physician Practitioners (NPP) as specialty practice NPPs will be detailed as part of the phase two application process. Details are available in the ACO PC Flex Model RFA (PDF). Phase two of the ACO PC Flex application process begins on October 18, 2024.
Can providers in ACOs participate in other Innovation Center models if they are a part of the ACO PC Flex Model?
Health care providers participating in another Innovation Center model that involves shared savings will not be allowed to participate at the same time in the ACO PC Flex Model unless otherwise permitted by CMS. One exception is the Guiding an Improved Dementia Experience (GUIDE) Model, for which CMS will permit provider and beneficiary overlap with all ACO initiatives, including the Shared Savings Program and the ACO PC Flex Model. Visit the Innovation Center’s model webpage for more information about models focused on other aspects of care.
What is a low revenue ACO? How does my ACO know if it is low or high revenue?
The Shared Savings Program regulations define “low revenue ACO” under 42 CFR § 425.20 as an ACO whose total Medicare Parts A and B fee-for-service 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. These low revenue ACOs often face greater financial challenges than high revenue ACOs with expanding access to high-quality primary care, because they tend to be less capitalized, more risk-averse, and less likely to take on performance-based risk than high revenue ACOs.
The Shared Savings Program provides revenue determinations to ACOs in the ACO Management System (ACO-MS) as part of the Shared Savings Program application process. Eligibility for the ACO PC Flex Model will be based on final revenue determinations provided by CMS during phase 1 final dispositions in October.
Payment and Financial Methodology
How does the Prospective Primary Care Payment (PPCP) work?
The PPCP is a monthly payment for primary care services provided by primary care providers who participate in the ACO and provide primary care to the ACO’s assigned beneficiaries. The PPCP is made up of two parts, a County Base Rate to cover PPCP-eligible services (Prospective Primary Care Payment County Base Rate) and an Enhanced Amount for providing enhanced primary care services (Prospective Primary Care Payment Enhanced Amount).
The amount of payment made by CMS to the ACO will depend on the County Base Rate, which is derived from county average primary care spending, and the Enhanced Amount based on characteristics of the ACO and its assigned patient population. For most model participants, CMS expects that the PPCP will increase primary care funding relative to ACOs’ historical expenditures.ACOs that participate in the Shared Savings Program receive the PPCP for primary care services in lieu of fee-for-service payments. Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) do not receive fee-for-service payments. How will the ACO PC Flex Model drive participation in the Shared Savings Program for RHCs and FQHCs? Are there special considerations for FQHCs and RHCs, who are not paid fee-for-service like other primary care providers?
The ACO PC Flex Model includes special considerations for RHCs and FQHCs, who are not paid fee-for-service like other primary care providers. A beneficiary level add-on payment to the PPCP is included for beneficiaries who receive the plurality of primary care services based on allowable charges at FQHCs or RHCs (beneficiaries with FQHC or RHC focused care). Because the all-inclusive payment rate is different for FQHCs and RHCs, there will be a different primary care per-beneficiary per-month (PBPM) add-on amount for each of these settings to encourage FQHCs and RHCs to participate in the ACO PC Flex Model.
Additionally, we are providing a guardrail for PPCP amounts for beneficiaries with FQHC or RHC focused care. If the ACO’s paid PPCP (excluding Flex Enhancement) for these beneficiaries is less than the actual claims reductions (evaluated YTD on a quarterly basis), we will make additional payment in the next available payment cycle to make up the difference. This means that the payment for these beneficiaries will not be less than actual fee reductions while preserving the Flex Enhancement. Note that this calculation is done at the ACO level and not at the beneficiary level.
How will FQHC Prospective Payment System (PPS) rates be impacted if they participate in ACO PC Flex? Will FQHCs still be able to bill for Care Management Services?
All claims billed by FQHCs or RHCs for beneficiaries assigned to the PC Flex ACO in which the FQHC or RHC is participating will be considered primary care services and zero-paid. Claims billed by FQHCs or RHCs for other beneficiaries will be paid normally.
How is the PPCP Payment Enhancement calculated? Will CMS provide ACOs with the data sources used to calculate the PPCP?
The PPCP consists of several components, including the PPCP County Base Rate, Add-on for beneficiaries with FQHC- or RHC-Focused Care, the PPCP Enhanced Amount, PPCP Adjustments, and Primary Care Prospective Administrative Trend (PCPAT).
An example calculation is available here (XLSX).
The ACO PC Flex Rate Book as well as model-wide variables will be published later this year. To the extent possible, ACO-specific variables, such as the Primary Care Outside of ACO (PCOA) Adjustment factor will be made available to PC Flex ACOs in advance of the performance year.
Each month, PC Flex ACOs will receive a payment detail report that includes the detailed build up of the PPCP at the beneficiary-month level.Is the rate for the prospective payment that is paid to ACO participants by the ACO established by CMS or by the ACO?
The prospective payment (PPCP) will be paid by CMS to PC Flex ACOs based on the methodologies described in the RFA. Payment terms for downstream payment arrangements will be negotiated between the PC Flex ACO and the ACO Participants and must be detailed in writing in an ACO participant agreement. PC Flex ACOs will be required to report quarterly the total amount paid to ACO Participants at the TIN or CCN level, and for what purpose.
What is the shared savings or shared losses rates in ACO PC Flex?
PC Flex ACOs are simultaneously participating in the Shared Savings Program, which governs the shared savings and losses rates based on the participation option (BASIC track levels A through E and ENHANCED track) that is selected.
How does the county rate get established for multistate ACOs?
The County Base Rate and County Enhancement, where applicable, are used at the beneficiary level based on the beneficiary’s county of residence. For PC Flex ACOs that span multiple counties or states, the average county rate for the PC Flex ACO is the beneficiary-month weighted average of the county rates of the PC Flex ACO’s assigned, PPCP eligible beneficiaries. In practice, the PPCP is calculated at the beneficiary-month level. PC Flex ACO level averages are not used to calculate payment but may be of interest to PC Flex ACOs for informational purposes.
Can the ACO retain a portion of the PPCP to invest in infrastructure or does all the PPCP money need to be paid out to Participant Providers?
So long as PC Flex ACOs satisfy the minimum spend requirements described below (e.g., at least 90% of PPCP must be spent on Category 1 during performance year 1, at least 95% spent on Category 1 in subsequent performance years), there are no additional restrictions or limitations on when PPCP need to be spent by PC Flex ACOs. PC Flex ACOs are not required to spend all PPCP each performance year.
Allowable uses of the PPCP are detailed in Section V.A of the RFA. There are three expenditure categories, each with requirements about how much of the PPCP must be used for that category:
Expenditure Category First Payment Year Subsequent Payment Years - Provision and Support of Advanced Primary Care
At least 90% At least 95% - Operations of PC Flex ACO
Not more than 10% Not more than 5% - Prohibited Uses
0% 0% What will financial settlement look like under ACO PC Flex?
Because PC Flex ACOs will still be participating in the Shared Savings Program, PC Flex ACOs will be subject to the Shared Savings Program financial settlement process codified in federal regulations. At a high level, financial settlement for PC Flex ACOs will compare the performance year benchmark to performance year expenditures to calculate gross savings and losses. The calculation of the total cost of care benchmark for ACOs participating in the ACO PC Flex Model will be unchanged from the Shared Savings Program’s methodology (as codified at 42 C.F.R. Part 425 Subpart G).
Financial Settlement in ACO PC Flex will generally follow the procedures in the Shared Savings Program; however, several adjustments to Shared Savings & Losses calculations are required for ACO PC Flex. The Advance Shared Savings Payment will be deducted from shared savings for each performance year the PC Flex ACO generates savings and the balance owed will be carried over from performance year to performance year, until the full $250,000 is repaid.The paid PPCP will be added to performance year expenditures. CMS will calculate the Total Enhancement Credit, or the total performance year value of the enhancement portion of the PPCP, after offsetting for the greater of the positive regional adjustment and prior savings adjustment and add the Total Enhancement Credit to the ACO’s share of savings or losses.
ACOs will be subject to risk on the County Base Rate portion of their PPCP. However, ACOs will not be subject to risk on the Enhanced Amount of their PPCP, to the extent that the Enhanced Amount exceeds the positive regional adjustment or prior savings adjustment. ACOs with a positive regional adjustment or prior savings adjustment will trigger an offset to the Enhanced Amount, lowering the Total Enhancement Credit.
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