Medicare is trying again with another accountable care organization (ACO) payment model aimed at primary care doctors, but reactions to the new model are mixed so far.
The voluntary model, known as ACO Primary Care Flex, would pay organizations that participate in Medicare’s Shared Savings Program a monthly fee that would be distributed to the ACO’s primary care practices. The CMS announced the new model last week; it will begin operating on Jan. 1, 2025.
“Premier applauds CMS for releasing its ACO Primary Care Flex model, which will test primary care capitation in the Medicare Shared Savings Program (MSSP),” Seth Edwards, vice president of population health and value-based care at Premier, a healthcare group purchasing firm, said in a statement. “However, Premier is disappointed in the limited scope of what could be a promising model to help ACOs shift off the fee-for-service chassis.”
“Limiting the model to low-revenue ACOs is flawed and creates market distortions by advantaging one provider type over another,” he added. “Additionally, ACO performance is driven by other factors beyond revenue status.”
Some Shared Optimism
Other groups were more optimistic. “We are excited about the opportunities [the model] will bring to enable more primary care practitioners to further improve care and reduce costs,” Farzad Mostashari, MD, co-founder and CEO of Aledade, an ACO consulting firm, said in a statement. “After 10 years of working with primary care practices nationwide, we have heard firsthand concerns about resources needed to provide more primary care to those who need it and the flexibility to break free of rigid fee schedules.”
“We are enthusiastic about the ACO Primary Care Flex Model, as it will rigorously test the proposition that giving primary care capitation payments as part of MSSP will drive adoption of accountable care and the enablement of proven services,” he added. “Ultimately, we believe this model will generate within the U.S. healthcare system better outcomes, better quality and a better lower total cost of care.”
Under the model, CMS will provide a one-time advanced shared savings payment and monthly prospective primary care payments to ACOs. “The advanced shared savings payments provide ACOs with needed resources and flexibility to cover costs associated with forming an ACO (where relevant) and administrative costs for required model activities,” the agency said in a press release. The payments “will be distributed by ACOs to primary care practices, giving them improved resources and flexibility to provide care that best suits individuals’ needs.”
The model is aimed at low-revenue ACOs, “which tend to be smaller and mainly made up of physicians,” according to CMS. “Low-revenue ACOs have historically performed better in the Shared Savings Program, demonstrating more savings and stronger potential to improve the quality and efficiency of care delivery. The ACO PC Flex Model’s payment structure also promotes competition by providing a pathway for low revenue ACOs, which often have fewer resources, to continue serving people with Medicare while providing an alternative for physicians to stay independent.”
The model also may allow beneficiaries in ACOs to “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,” said CMS Administrator Chiquita Brooks-LaSure.
Compared to some other healthcare groups, American College of Physicians (ACP), which represents internists, took a more cautious approach toward the announcement. “This new practice model is both important and promising because primary care medicine has been demonstrated to improve health and life expectancy, and reduce costs,” said ACP president Omar Atiq, MD, in a statement. “However, despite these proven benefits, primary care medicine is in crisis. We need to improve financial support and innovative practice redesign in order to help attract new physicians to primary care and make this a more sustainable career path for primary care physicians in practice. ACP looks forward to reviewing the details of the model when they are released and working with CMS to ensure that the financial support for this model reaches the primary care practices that need it.”
ACO Groups Generally Positive
Groups representing ACOs were generally positive about the new model. “Experience shows that Medicare’s physician-led ACOs have produced superior results in terms of quality improvements and shared savings, and this new model could boost their performance further,” Susan Dentzer, president and CEO of America’s Physician Groups, which represents physician-led ACOs, said in a statement. “In particular, getting some portion of shared savings in advance could help many physician practices make the needed investments in infrastructure and care redesign that are integral to advanced primary care.”
Clif Gaus, ScD, president and CEO of the National Association of ACOs (NAACOS), pointed out in a statement that his organization has been advocating for this approach. “Shifting to prospective payments provides primary care practices with stable and predictable cash flow needed to transform care delivery and provide comprehensive, team-based care,” he said. “This model builds on the success of MSSP while recognizing we must continue to evolve the program in order to grow the program.”
However, Gaus added, “While we are extremely pleased with the model, we ask that CMS reconsider excluding high-revenue ACOs, which prevents independent primary care practices who have partnered with their local health systems from taking advantage of these much-needed innovations. The premise of ACOs is to bring together providers from across the continuum of care to provide improved care for beneficiaries.”
Previous Models
Primary Care Flex is the latest in a series of primary care-focused accountable care models introduced by CMS. A report commissioned by CMS and released last month by the Mathematica consulting group looked at one of the most recent models, Primary Care First (PCF), a voluntary 5-year payment model that started in 2021. The report noted that in 2022, “nearly 3,000 practices [more than 5% of primary care practices nationwide] were participating in the PCF model … PCF practices provided care to 11% of all Medicare fee-for-service beneficiaries (about 2 million).”
The Primary Care First model was preceded by several other models, including Comprehensive Primary Care (CPC Classic) and Comprehensive Primary Care Plus (CPC+). “CPC Classic showed some beneficial effects such as reducing the rates of outpatient emergency department (ED) visits and hospitalizations but did not reduce Medicare spending enough to cover care management fees,” the report noted.
As for CPC+, “an independent evaluation estimated CPC+ led to modest reductions in ED visits, hospitalizations, and acute inpatient expenditures and improvement on some claims-based quality-of-care measures,” although some stakeholders complained that the model didn’t do enough to reduce billing and quality reporting burdens.
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Joyce Frieden oversees MedPage Today’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy. Follow
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