CMS AHEAD Model

The CMS announced Connecticut, Maryland and Vermont will be the first states to participate in the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) model. I took a look at this back in December 2023:

The Centers for Medicare and Medicaid Services (CMS) has announced the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model, an eleven-year project to fund states’ efforts to control overall care costs and ensure health equity through primary care while ensuring quality. The CMS will provide $12 million to each of eight states for the first six years of the model, including the pre-implementation period of between one and a half years and two and a half years. Participating States are expected to take accountability for coordinating the activities of both private and government-sponsored payers, and institutional and individual providers. States are additionally expected to impose global budgets on institutional providers, manage the businesses of the payers, and ensure individual providers adhere to high-value, high-quality care principles. States are instructed to use their statutory powers to create and enforce this Model, with little to no incentives provided to the stakeholders.? States with robust participation in Health Information Networks may have some advantage in the participation and execution of this Model. Those that can leverage the newly-passed TEFCA may also enjoy some economies of scale concerning coordination and collaboration between stakeholders. States with all-payer reimbursement systems and/or all-payer claims databases similarly may have a head-start and be better prepared for Cohort 1 of the Model.

Frankly, there is little alignment or incentive created by this Model above and beyond the incentives for efficiency and health optimization already present in the healthcare industry, particularly for financial risk-bearing entities. The addition of State-imposed reporting appears duplicative of existing program, creates additional administrative burdens and global budgets may be interpreted as a significant overreach. States already have many of the prerogatives to create initiatives around health equity, social determinants of health and other public programs when they submit their State Plan Amendments yearly.

Several additional factors may hamper the success of this Model. The duration of the Model, while probably necessary to see the type of changes desired, will extend across multiple political administrations and evolution in healthcare, potentially rendering the Model irrelevant. The imposition of global budgets is not likely to go unchallenged by many of the strongest healthcare industry organizations (e.g. the American Hospital Association, American Medical Association). State Medicaid agencies already have the ability to fix their reimbursement rates, and additional limitation seems at odds with the recent Ensuring Access to Medicaid Services and Managed Care Access, Finance, and Quality proposed rules . And finally, for the sake of this brief analysis, the provision of $2 million for each of the first six years (including pre-implementation) of an eleven-year model is likely to be insufficient. Certainly, more details will emerge, however, the deck seems stacked against this Model.