On September 5, 2023, the Centers for Medicare & Medicaid Services (CMS) announced a new voluntary, state total cost of care (TCOC) model: the States Advancing All-Payer Health Equity Approaches and Development Model (“States Advancing AHEAD” or “AHEAD” Model). CMS’s goal in the AHEAD Model is to collaborate with states to curb health care cost growth; improve population health; and advance health equity by reducing disparities in health outcomes. CMS will support participating states through various AHEAD Model components that aim to increase investment in primary care, provide financial stability for hospitals, and support beneficiary connection to community resources.
CMS anticipates releasing a Notice of Funding Opportunity (NOFO) in late Fall 2023, with a subsequent application period in Spring 2024. States interested in participating in AHEAD must apply to the NOFO during these application periods. CMS expects to award cooperative agreements to up to eight states across the two application periods for participation in the model. Eligible AHEAD Model NOFO applicants are state agencies (e.g., state Medicaid agency, state public health agency, state insurance agency, or other entity with rate-setting or budget authority) with the authority and capacity to enter into an agreement with the Secretary on behalf of their state and accept funding.
States applying to participate in AHEAD will be required to select one of three cohorts depending on their readiness to implement the model:
- Cohort 1: 18-month pre-implementation period, tentatively July 2024 – December 2025. States may choose Cohort 1 if they are ready to apply and implement the AHEAD Model as soon as possible. Cohort 1’s first performance year will tentatively begin in January 2026, with a total of nine performance years.
- Cohort 2: 30-month pre-implementation period, tentatively July 2024 – December 2026. States may choose Cohort 2 if they are ready to apply to the AHEAD Model but need additional time to prepare for implementation, such as developing Medicaid components, recruiting health care providers to participate, and developing data infrastructure. Cohort 2’s first performance year will tentatively begin in January 2027, with a total of eight performance years.
- Cohort 3: 24-month pre-implementation period, tentatively January 2025 – December 2026. States that need additional time to apply to the AHEAD Model should apply to join Cohort 3. Cohort 3’s first performance year will tentatively begin in January 2027, with a total of eight performance years.
The AHEAD Model is scheduled to operate for a total of 11 years, from 2024 through 2034. CMS will provide cooperative agreement funding to selected states for up to 6 years to support their participation in this Model. A maximum of $12 million dollars may be awarded to each participating state. Model performance periods for states are scheduled to begin in either January 2026 or January 2027, depending on the cohort states apply to and their respective pre-implementation period (18, 24, or 30 months). Funding will be made available to states in an initial award and subsequent annual non-competing continuation awards over the course of up to six years (i.e., through their PY4 for Cohort 1; through their PY3 for Cohort 2; through their PY4 for Cohort 3). The model will conclude for all cohorts of 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. CMS is also testing this Model over a longer period to allow time for early investments in primary care services and enhanced care coordination to result in better health and lower spending.
AHEAD Model Overview
AHEAD is a state total cost of care (TCOC) model that seeks to drive state and regional health care transformation and multi-payer alignment, with the goal of improving the total health of a state population and lowering 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 deliver high-quality care, improve population health, offer greater care coordination, and advance health equity by supporting underserved patients. The AHEAD Model will provide participating states with funding and other tools to address rising health care costs and support health equity.
Primary care is the foundation of a high-performing health system and is essential to improving health outcomes for patients and lowering costs. Through AHEAD, CMS aims to strengthen primary care, improve care coordination, and increase screening and referrals to community resources like housing and transportation to address social drivers of health. AHEAD aims to increase resources available to participating states to improve the overall health of their population, support primary care, and transform health care in their communities. Improving health care outcomes and health equity for all residents within a participating state or region is a primary goal of the AHEAD Model.
AHEAD builds upon the work of existing Innovation Center state-based models, including the Vermont All-Payer Accountable Care Organization ( VT ACO) Model, the Maryland Total Cost of Care Model (MD TCOC), and the Pennsylvania Rural Health Model (PARHM). What separates AHEAD work from current state-based models is that CMS will implement AHEAD, with its state-based TCOC approach, concurrently across multiple states. Through the AHEAD Model, participating states can increase investments in primary care while constraining total health care cost growth. AHEAD encourages a state level, multi-sector approach to care, advancing health equity and thereby improving population health outcomes, and coordinating resources to address underlying factors that contribute to disparities in health outcomes in underserved communities.
- View the AHEAD Model Infographic (PDF)
AHEAD will test state accountability for controlling overall growth in health care expenditures while increasing investment in primary care and improving population health outcomes within a participating state or region within a state. Participating states will be accountable for state-specific Medicare and all-payer cost growth and primary care investment targets. The AHEAD Model consists of three primary components to assist states in meeting these targets:
- Cooperative Agreement Funding: The cooperative agreement funding provided by CMS can support initial investments for states to begin planning activities during the Model’s pre-implementation period and the initial performance years of the model. This period will be critical to the model’s success and will require significant effort from the state and its partners, particularly in implementing the Medicaid components of the Model and recruiting hospitals and primary care practices to participate.
- Hospital Global Budgets: Global budgets provide hospitals with a fixed amount of revenue for the upcoming year for a specific patient population or program, such as Medicare fee-for-service beneficiaries. A global budget encourages hospitals to eliminate avoidable hospitalizations and improve care coordination between hospitals, primary care providers, and specialists. Increased investments in primary care under the Model can be offset over time by statewide savings generated by hospital global budgets.
- Primary Care AHEAD: Primary care practices located in a participating state or sub-state region will have the option to participate in Primary Care AHEAD, the primary care program component of the model. Primary Care AHEAD will align with ongoing Medicaid transformation efforts within each participating state and aims to increase Medicare investment in primary care.
There are three primary participants in the AHEAD Model, each with a unique role and responsibilities:
- States: Any state interested in participating in AHEAD can choose to apply for either the entire state or a specified sub-state region. As the key participant in the model, states will work closely with CMS on model implementation in their state or specific sub-state region. As part of the model, participating states will be held accountable for statewide or sub-state targets that align with model goals for Medicare FFS and across all payers. States will also be responsible for ensuring that statewide quality and equity targets for all residents are being met. State Medicaid Agencies will align with CMS in hospital global budgets and primary care transformation.
- Hospitals: AHEAD will offer participating hospitals located in participating states and sub-state regions annual Medicare FFS global budgets, which will be set prospectively. These budgets will cover inpatient and outpatient services for these hospitals. Global budgets provide hospitals with stable, predictable funding and increased incentives to manage population health to improve health outcomes. As part of the global budget methodology, hospitals will be required to meet performance measures for quality and health equity. Under a global budget, participating hospitals will be incentivized to improve performance and increase efficiencies.
- Primary Care Practices: The AHEAD Model is designed to increase Medicare FFS investment in primary care and align primary care transformation with existing innovations in state Medicaid programs. Participation from primary care practices will be vital to the AHEAD Model’s success. Primary care practices participating in the model will be required to engage in state-led Medicaid transformation efforts and the aligned Medicare Primary Care AHEAD program and will receive a Medicare care management fee to meet care transformation requirements for person-centered care. Primary care practices will be responsible for reaching performance goals on model quality measures.
Health Equity Strategy
Improving health equity is a key CMS priority and a critical component of the AHEAD model.
AHEAD is designed with several health equity components, including the following efforts:
- States will be required to establish a model governance structure to guide implementation of the model. Through this structure, states will convene individuals and organizations with a wide range of perspectives to inform model activities and build partnerships between the state, providers, payers, and the community to support model goals.
- All participating states will be required to develop a Statewide Health Equity Plan to define and guide Model activities aimed at reducing disparities and improving population health.
- Participating hospitals will also be required to create hospital health equity plans that align with statewide priorities and activities.
- Payment methodology for hospital global budgets and Primary Care AHEAD will include adjustments for social risk. Hospitals will also be eligible to earn a bonus for improved performance on disparity-focused measures.
- Participating hospitals and primary care practices will enhance demographic data collection and utilize health-related social needs screening to connect beneficiaries to community resources and address social needs.
- Primary care practices participating in the Primary Care AHEAD program will be required to engage in state Medicaid transformation efforts, meet care transformation requirements for person-centered care, and reach performance goals on quality measures. FQHCs, RHCs, and other safety net providers will also be eligible for participation, as further described in the NOFO.
- The AHEAD Model features a Notice of Funding Opportunity (NOFO) with two application periods. There will be three cohorts (Cohorts 1-3), each with their own pre-implementation start dates and performance periods, to allow states at varying levels of readiness to prepare for implementation.
- NOFO applications will be evaluated following application closure, and CMS anticipates notifying state awardees in Spring 2024. Evaluation criteria for applications will include the following: statewide or sub-statewide accountability targets, hospital and primary care practice recruitment plans, hospital global budget methodology, vision for primary care transformation, description of health equity activities, and other factors.
- All states interested in applying to participate in the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model, will submit applications through the Grants.gov website. More information about the application process will be shared once it is available.
- Notice of Funding Opportunity Office Hours
- February 26, 2024: 3:00 pm EST
- March 14, 2024: 3:00 pm EST
- CMS-Designated Medicare FFS Hospital Global Budget Methodology Overview Webinar
- Notice of Funding Opportunity Office Hours
- CMS AHEAD Model: Notice of Funding Opportunity – November 16, 2023
- Considering the AHEAD Model: Lessons from States on Hospital Global Budgets and Investing in Primary Care – October 26, 2023
- Webinar Host: The National Academy for State Health Policy (NASHP)
- Considering the AHEAD Model: Lessons from States with Health Care Cost Growth and Primary Care Investment Targets – October 17, 2023
- Webinar Host: Peterson-Milbank Program on Sustainable Health Care Costs
- CMS Overview of the AHEAD Model – September 18, 2023
- Frequently Asked Questions
- Fact Sheet (PDF)
- AHEAD Primary Care AHEAD Fact Sheet (PDF)
- AHEAD Hospital Global Budget Fact Sheet (PDF)
- AHEAD Overlaps Fact Sheet (PDF)
- Press Release
- CMS Innovation Center Primary Care Models Comparison (PDF)
- AHEAD Primary Care Investment Methodology (XLSX)
- AHEAD Hospital Global Budget Specifications Version 1.0 (PDF)
- Key Concept: Total Cost of Care and Hospital Global Budgets