CMS Unveils New State Model for Care Management

WASHINGTON—The Centers for Medicare & Medicaid Services (CMS) unveiled a new payment model that will give states  more flexibilities in how they manage health care, and could ultimately shift focus to home- and community-based services. The States Advancing All-Payer Health Equity Approaches and Development Model (“States Advancing AHEAD” or “AHEAD Model”) aims to better address chronic disease, behavioral health and other medical conditions.

“Under the AHEAD Model, participating states will be better equipped to promote health equity, increase access to primary care services, set health care expenditures on a more sustainable trajectory, and lower health care costs for patients,” CMS said in a news release announcing the model, which is based on the CMS Innovation Center’s multi-payer total cost of care models and will allow up to eight states to pilot the program. States participating in AHEAD will be accountable for quality and population health outcomes while reducing all-payer avoidable health care spending to spur statewide and regional health care transformation.

Through this new voluntary model, CMS will partner with states to redesign statewide and regionwide health care delivery to improve the total population health of a participating state or region by improving the quality and efficacy of care delivery, reducing health disparities, and improving health outcomes. AHEAD also includes specific payment models for participating hospitals and primary care practices as a tool to achieve model goals. Through AHEAD, CMS aims to strengthen primary care, improve care coordination for people with Medicare and Medicaid, and increase screening and referrals to community resources like housing and transportation to address social drivers of health. 

“In our current health care system, fragmented care contributes to persistent, widening health disparities in underserved populations,” said CMS Administrator Chiquita Brooks-LaSure. “The AHEAD Model is a critical step towards addressing disparities in both health care and health equity while improving overall population health.”

“Primary care is the foundation of a high-performing health system and essential to improving health outcomes for patients and lowering health care costs. For that reason, the CMS Innovation Center has invested significant time and resources over the years testing models to strengthen primary care and improve care coordination and linkages to organizations that address health-related social needs,” said Deputy CMS Administrator and Innovation Center Director Liz Fowler. “Through AHEAD, more states will have the exciting opportunity to both improve the overall health of their population, support primary care, and transform health care in their communities.”

Each state selected to participate in the AHEAD Model will have an opportunity to receive up to $12 million from CMS to support state implementation. Recognizing that some states are more ready than others to implement change, states interested in participating in the model may apply during two different application periods and elect to participate in one of three cohorts with staggered start dates and performance years.

The pre-implementation period is scheduled to begin for the first cohort in summer 2024. The model performance period for states is scheduled to begin in January 2026 or January 2027, depending on the cohort, and the model will conclude for all state participants in December 2034. CMS is offering a longer pre-implementation, or planning period, for states that need additional time to prepare for the care redesign required under the model.

The AHEAD Model will test state accountability for constraining overall growth in health care expenditures while increasing investment in primary care and improving population health and health equity. More specifically, the AHEAD model will:

• Focus resources and investment on primary care services, giving primary care practices the ability to improve care management and better address chronic disease, behavioral health, and other conditions.
• Provide hospitals with a prospective payment stream via hospital global budgets, while including incentives to improve beneficiaries’ population health and equity outcomes.
• Address health care disparities through stronger coordination across health care providers, payers, and community organizations in participating states or regions.
• Address the needs of individuals with Medicare and/or Medicaid by increased screening and referrals to community resources like housing and transportation.

Each participating state will have a Medicare total cost of care growth target in the AHEAD Model determined by CMS and participating states during the pre-implementation period; this target is designed to incentivize states to control unnecessary spending by reorienting care towards prevention and providing care in the safest, lowest acuity setting. The all-payer cost growth targets, which will be set by states, will encourage states to align payer efforts to slow the growth of health care costs while driving transformative change. States will also have a Medicare and an all-payer primary care investment target to enhance primary care delivery.

The AHEAD Model builds on lessons learned from existing state-based models, including the Maryland Total Cost of Care Model, the Vermont All-Payer ACO Model, and the Pennsylvania Rural Health Model. To learn more, visit the model webpage at https://innovation.cms.gov/innovation-models/ahead.