In March 2024, the Centers for Medicare & Medicaid Services (CMS) released a new voluntary model called the ACO Primary Care Flex Model (ACO PC Flex Model). This model focuses on primary care delivery within the Medicare Shared Savings Program (MSSP), which is Medicare’s longest-running program whereby health care practitioners and other providers and suppliers form an Accountable Care Organization (or ACO) to provide coordinated, high quality care to Medicare beneficiaries. Continue reading to learn more about the ACO PC Flex model.

ACO PC Flex Model Overview

This model furthers the Administration’s efforts to promote competition in health care, and specifically, within our nation’s primary care system. ACOs play a key role in helping individuals access primary care. Primary care is important because it is often the first point of contact for people seeking healthcare services. Additionally, having access to primary care increases the likelihood that individuals receive preventative health screenings, experience improved health outcomes, better manage chronic conditions, and narrow health disparities. But ACOs’ ability to address primary care access is affected by their inability to pay for advanced primary care because of visit-based payment and fee-for-service financial barriers. Advanced primary care not only removes barriers to healthcare access, but it also focuses on whole-person care and incorporates behavioral health and social determinants of health. It also improves healthcare costs since people are receiving more routine and preventative care. That is why the ACO PC Flex Model will test how payments and increased funding for primary care in ACOs will impact health outcomes, quality, and costs of care. The model aims to increase the number of low-revenue ACOs that participate in the Shared Savings Program. Low revenue ACOs typically are made up of physicians which might include small hospitals as participants, or serve rural areas. Historically, low revenue ACOs have performed better in the Shared Savings Program in that they save more money and have a stronger potential to improve quality and efficiency of care delivery. Along with improving cost and quality of care, this model also incentivizes the development of new physician-led ACOs – especially ones that support underserved communities. Through this model, CMS is hoping to achieve several key goals including:  

  1. Expanding access to high quality, patient-centered primary care
  2. Improving the care experience for people with Medicare
  3. Strengthening primary care in accountable care organizations and spur innovative approaches to care delivery
  4. Reducing disparities in health care outcomes
  5. Lowering costs while preserving or enhancing the quality of care for individuals in the Shared Savings Program
  6. Increasing accountable care relationships for people with Medicare, especially those in rural and underserved communities

Performance period and funding of model

The ACO PC Flex Model is scheduled to run for five years starting on January 1, 2025 until December 31, 2029. CMS will provide a one-time Advanced Shared Savings Payment of $250,000 and monthly Prospective Primary Care Payments (PPCPs) to ACOs, which will then be distributed to participating primary care providers, Federally Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs). The PPCPs are in lieu of FFS reimbursement for most primary care services and, instead, utilize a base rate that is calculated based on several factors including the average primary care spending in an ACO’s county that is then amplified by payment enhancements based on specific characteristics of the ACO and assigned patient population. These monthly prospective payments will help shift payment away from fee-for-service (FFS) and allow for primary care revenue to be more predictable for ACOs. ACOs can use the Advanced Shared Savings Payment to cover costs related to forming an ACO and administration costs to run the model. The PPCP funding, in particular, likely will increase primary care funding for most participants in the model. All ACOs will receive the same Advanced Shared Savings Payment amount regardless of the number of beneficiaries in an ACO and without risk adjustment.

Who can participate in the model?

Applications for the Medicare Shared Savings Program open on May 20, 2024 and close a month later on June 17, 2024. ACO PC Flex Model applications are anticipated to open in May 2024 and close sometime in August 2024. ACOs that are not yet in the MSSP first must apply to the Shared Savings Program before they can apply to the ACO PC Flex Model. ACOs that are already participating in the Shared Savings Program and are interested in joining the ACO PC Flex Model will also have to apply to the Shared Savings Program as a Renewal Applicant and begin a new agreement period. ACOs will be asked about their interest in the ACO PC Flex Model within the Shared Savings Program application. To be eligible to participate in the ACO PC Flex Model, ACOs must be considered low revenue ACO as defined under 42 CFR § 425.20[1].

What do other health care organizations think about the model?

Health care organizations generally had positive feedback about the release of the ACO PC Flex Model. In a recent webinar with CMS and the Primary Care Initiative about the new model, the senior vice president of the National Association of Community Health Centers, Ben Money, said that “FQHCs will only benefit from higher levels of primary care investments.” In addition, Sarah Coombs, the director for health system transformation at the National Partnership for Women & Families, noted that this model differs from other fee-for-service models that often “…reinforce patterns of underutilization among systemically underserved communities,” and that beneficiaries can have greater access to telehealth and multidisciplinary care teams. Aledade, the largest, independent primary care network, also released a statement stating that they are excited about the opportunities the model will bring, “…to enable more primary care practitioners to further improve care and reduce costs.” The National Association of ACOS, or NAACOS, in a statement praised CMS’ decision to release this model saying, “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. This model builds on the success of MSSP while recognizing we must continue to evolve the program in order to grow the program.” On the other hand, NAACOS also expressed 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.” Premier Inc, a healthcare improvement company that works with hospitals and health systems, also believes that CMS should broaden their eligibility criteria for the model stating that they are, “…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.” In their statement, they urge CMS to eliminate “…distinctions between high- and low-revenue ACOs and ensure that the ACO Primary Care Flex model is open to all ACOs regardless of their revenue status or structure.”

For more information or to learn more about CMS initiatives and updates, please contact the professionals listed below, or your regular Crowell contact.


[1] “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” [CMS. (2024). ACO Primary Care Flex Model Frequently asked questions. CMS.gov. https://www.cms.gov/priorities/innovation/innovation-models/aco-primary-care-flex-model/faqs].

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Photo of Troy A. Barsky Troy A. Barsky

Troy Barsky is a partner in Crowell & Moring’s Washington, D.C. office, and serves as a member of the firm’s Health Care Group Steering Committee where he focuses on health care fraud and abuse, and Medicare and Medicaid law and policy. Troy counsels…

Troy Barsky is a partner in Crowell & Moring’s Washington, D.C. office, and serves as a member of the firm’s Health Care Group Steering Committee where he focuses on health care fraud and abuse, and Medicare and Medicaid law and policy. Troy counsels all types of health care entities, including hospitals, group practices, and health plans on the physician self-referral law (Stark Law) and the Anti-Kickback Statute, innovative healthcare delivery models, such as Accountable Care Organizations (ACOs), and Medicare & Medicaid payment and coverage policy. He also defends clients seeking resolution of government health care program overpayment issues or fraud and abuse matters through self-disclosures and negotiated settlements with the U.S. Department of Justice, U.S. Health & Human Services Office of the Inspector General and the Centers for Medicare & Medicaid Services (CMS).

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Stephen Bentfield is a partner and a member of the firm’s Health Care Group. Stephen counsels health care organizations on a wide range of health care regulatory and transactional matters. His regulatory experience includes helping clients with issues such as fraud and abuse…

Stephen Bentfield is a partner and a member of the firm’s Health Care Group. Stephen counsels health care organizations on a wide range of health care regulatory and transactional matters. His regulatory experience includes helping clients with issues such as fraud and abuse enforcement risk analysis and mitigation, organizational compliance programs and policies, managed care, value-based care, reimbursement, licensure, and state regulatory issues. On the transactional side, Stephen has extensive experience drafting contracts, advising on deal structuring and negotiation, including the creation of joint ventures and other new corporate structures, as well as mergers and acquisitions.

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Eunice Lalanne supports Crowell Health Solutions, a strategic consulting firm affiliated with Crowell & Moring, to help clients pursue and deliver innovative alternatives to the traditional approaches of providing and paying for health care, including through digital health, health equity, and value-based health…

Eunice Lalanne supports Crowell Health Solutions, a strategic consulting firm affiliated with Crowell & Moring, to help clients pursue and deliver innovative alternatives to the traditional approaches of providing and paying for health care, including through digital health, health equity, and value-based health care. She is a health care policy consultant in the Washington, D.C. office.