ACO Primary Care Flex Model

The ACO Primary Care Flex Model (ACO PC Flex Model) is a voluntary model that focuses on primary care delivery in the Medicare Shared Savings Program (Shared Savings Program). It tests how prospective payments and increased funding for primary care in Accountable Care Organizations (ACOs) impact health outcomes, quality, and costs of care. The flexible payment design empowers participating ACOs and their primary care providers to use more innovative, team-based, person-centered and proactive approaches to care.

The model, which started January 1, 2025, and runs for five Performance Years: Performance Year 2025 (PY 2025) through PY 2029. The ACO PC Flex Model aims to grow participation in ACOs and the Shared Savings Program and increase the number of people with Medicare in an accountable care relationship.
 

Highlights

  • People often experience better health outcomes and greater life expectancy when they receive high-quality, coordinated primary care.
  • Improved funding for primary care has the potential to amplify these positive outcomes.
  • The ACO PC Flex Model aims to increase access to high-quality primary care for people with Medicare by improving funding and other resources to enhance primary care in ACOs.
  • It incentivizes the development of new ACOs. 
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Source: Centers for Medicare & Medicaid Services

Background

Primary care is the foundation of a high-functioning health care system and serves as an important first point of contact for people seeking care. The aim of primary care is to deliver evidence-based, person-centered care that provides continuity and is comprehensive and coordinated. People who have access to high-quality primary care are more likely to receive preventive health services and screenings and to experience improved health outcomes related to mortality, disease progression, and chronic condition management. Yet, in the United States, primary care faces workforce shortages and other challenges that highlight a need for increased funding. ACOs play a key part in addressing these challenges, but have been hampered in their ability to pay for advanced primary care because of the way incentives are structured in the traditional fee-for-service system.

Model Overview

The ACO PC Flex Model is a five-year voluntary model test within the Shared Savings Program that began January 1, 2025. It aims to increase the number of low revenue ACOs in the Shared Savings Program. Low revenue ACOs tend to be mainly made up of physicians and might include a small hospital or serve rural areas. They 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 model’s new Prospective Primary Care (PPC) Payment option will shift payment for primary care away from fee-for-service, visit-based payment to enhance the predictability and amount of primary care funding for low revenue ACOs, thus increasing their flexibility to meet the needs of people with Medicare. The model also includes a one-time Advanced Shared Savings Payment to help cover costs associated with forming an ACO and administrative costs for model activities. Recent Shared Savings Program results continue to underscore the importance of high-quality primary care to the program’s success. The model is based on a recommendation made by the National Academies of Sciences, Engineering and Medicine in a report titled “Implementing High-Quality Primary Care: Rebuilding the Foundation of Health Care,” which recommended funds flow to primary care through ACOs to better support team-based care and provider infrastructure.

The goals of the ACO PC Flex Model are to:

  • Expand access to high-quality, accountable care and improve the patient experience for people with Medicare.
  • Enhance primary care payment and spur innovative approaches to care delivery, such as team-based care that is proactive and person-centered and drives quality improvement.
  • Reduce program expenditures while preserving or enhancing the quality of care for people in the Shared Savings Program.
  • Strengthen participation incentives for new and low revenue ACOs in the Shared Savings Program.

The ACO PC Flex Model advances payment arrangements within the Shared Savings Program:

  • A regionally consistent rate for primary care spending. The PPC Payment is a monthly payment made up of two parts: a County Base Rate and Payment Enhancements, where relevant.
    • The PPCP County Base Rate will not be based on the historical experience of the ACO, but on a county’s average primary care spending.
    • PPC Payment Enhancements — which are intended to provide additional resources to ACOs to support increased access to primary care, provision of care, and care coordination — will not be put at risk, meaning they will not be recouped by CMS. This will increase the long-term predictability and stability of primary care resources.
  • Specific policies to ensure PPC Payment funds are used to support primary care.
  • A one-time Advanced Shared Savings Payment to help cover costs associated with forming an ACO and administrative costs for model activities.

Increasing Reach of High-Quality, Person-Centered Care

The design of the PPC Payment as a flexible, predictable revenue stream that can exceed existing payment levels is expected to appeal to many low revenue ACOs and make it  an attractive option. These components include basing an ACO’s PPC Payment rate on its average county primary care spending rather than on its historical spending. This enables the model to pay an ACO the same rate for a given person in a region thereby increasing payment for providers that have entrenched patterns of inappropriately low spending. The ACO PC Flex Model will improve outcomes by:

  • Increasing access to higher-quality primary care, which can include unique services such as proactive care management, patient navigation, and behavioral health integration.
  • Aligning more people with Medicare to ACOs by incentivizing the formation of new ACOs. 

Providing primary care practices with flexible funding necessary to improve care coordination and identify and address people’s unmet health-related social needs.

Model Participation

An ACO must participate in the Shared Savings Program and be a low revenue ACO (as defined under 42 CFR § 425.20) to be eligible to participate in the ACO PC Flex Model. Organizations interested in participating must first apply — either as new ACOs or renewing ACOs — to the Shared Savings Program. ACOs that are currently participating in the Shared Savings Program and are interested in also participating in the ACO PC Flex Model must apply to the Shared Savings Program as a Renewal Applicant and begin a new agreement period. ACOs will be asked to indicate their interest in participating in the ACO PC Flex Model in Phase 1 of the Shared Savings Program application. CMS has released an RFA for the model. The deadline for applicant ACOs to submit a supplemental ACO PC Flex application questionnaire was August 23, 2024. The initial submission period to apply to the Shared Savings Program closed June 17, 2024. Currently, CMS does not intend to offer another round of applications for the ACO PC Flex Model.

ACOs may not participate in the ACO PC Flex Model and receive Advance Investment Payments (AIP). Primary care providers not affiliated with a participating ACO are ineligible to participate.

Additional Information

Model Background Resources

Technical Documents

Medicare Shared Savings Program

Outreach

If you are interested in receiving additional information, updates, or have questions about the ACO Primary Care Flex Model, please see the resources below:

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