The Centers for Medicare and Medicaid Services (CMS) recently announced a new funding opportunity for states to implement an all-payer model to improve overall population health. The model, the States Advancing All-Payer Health Equity Approaches and Development Model (“States Advancing AHEAD” or “AHEAD” Model). CMS will support states that participate in the Model through various components that aim to increase investments in primary care, provide financial stability to hospitals, and support beneficiary connection to community resources.
The AHEAD Model is a state total cost of care (TCOC) model that aims to achieve state and regional health care transformation and multi-payer alignment, with the goal of improving the state’s health and lowering health care costs. Under a TCOC approach, a participating state uses its authority to assume responsibility for managing health care quality and costs across all payers, including Medicare, Medicaid, and private coverage. States also assume responsibility for ensuring health providers in their state are delivering high-quality care, improving population health, and advancing health equity by supporting underserved patients.
Application Process
CMS anticipates the release of a Notice of Funding Opportunity (NOFO) in late 2023 with an application period opening Spring 2024. If a State wishes to participate in the AHEAD Model, they must apply to the NOFO during the application period. Eligible applicants to the AHEAD Model include state agencies (such as a state Medicaid agency, state public health agency, state insurance agency, or another entity with rate-setting or budget authority) that have the capacity and authority to enter into an agreement with HHS/CMS on behalf of their state and accept funding. CMS expects to award cooperative agreements to up to eight states across two application periods for participation in the Model.
The AHEAD Model is scheduled to operate for 11 years, from 2024 through 2034.
When applying to participate in the AHEAD Model, states will need to select one of three cohorts, depending on their readiness to implement the model. Cohort 1 will include an 18-month pre-implementation period (tentatively July 2024 – December 2025), and the first performance year will tentatively take place in January 2026, with a total of nine performance years. Cohort 2 will have a 30-month pre-implementation period (tentatively July 2024 – December 2026), with the first performance year tentatively beginning in January 2027, for a total of eight performance years. Cohort 3 will have a 24-month pre-implementation period (tentatively January 2025 – December 2026) and the performance year will tentatively begin January 2027, for a total of eight performance years.
States that are ready to apply and implement the AHEAD Model as soon as possible are encouraged to apply for Cohort 1. States that are ready to apply to the AHEAD Model but that need additional time to prepare for implementation, including developing Medicaid components, recruiting health care providers to participate, and developing data infrastructure, may want to consider applying for Cohort 2. Cohort 3 is recommended for states that need additional time to apply to the AHEAD Model.
If selected, CMS will provide a cooperative agreement to the states for up to six years to support their participation in the Model, with a maximum of $12 million awarded to each participating state. The amount each state receives will be based on historical Medicare and Medicaid spending, adjusted annually for inflation and changes in patient population. Each state will also be given a Medicare total cost of care growth target, determined by CMS, to incentivize them to control unnecessary spending and an all-payer cost growth benchmark, set by the states, to encourage them to align payer efforts to slow cost growth.
Through the AHEAD Model, CMS is hoping to collaborate with states to curb the growth of health care costs, improve population health, and advance health equity by reducing disparities in health outcomes.