On October 28, 2024, the Centers for Medicare & Medicaid Services (“CMS”) announced the latest states to participate in the voluntary state total cost of care (“TCOC”) model: the All-Payer Health Equity Approaches and Development (“AHEAD”) Model. The initiative aims to curb healthcare costs and improve population health by allowing states to assume responsibility for their own healthcare systems. Specifically, the program holds states accountable for meeting state-specific Medicare targets, reducing cost growth, primary care investment, and advancing health equity principles. As of August 2024, Maryland, Vermont, Connecticut, Hawai’i, Rhode Island, and five downstate counties of New York have been selected to implement AHEAD.

Program Overview

In September 2023, CMS unveiled AHEAD, a new, voluntary state TCOC model that seeks to drive transformation of the health care system on state and regional levels by incentivizing multi-payer alignment. AHEAD builds on existing, successful state-based models including, 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). With the implementation of AHEAD, CMS will be able to expand this state-based TCOC into multiple states at once.

Under the AHEAD model, participating states uses their authority to assume responsibility for managing health care quality and costs within their respective health care systems by improving care coordination, strengthening primary and preventive care, and increasing connection of patients to community resources that address the social determinants of health. The goal is to motivate states to improve population health by:

1. Curbing the Growth of Healthcare Costs: AHEAD encourages states to lower health-related expenditures, holding the state responsible for health care costs across all payers, including Medicare, Medicaid and private insurers. To facilitate this endeavor, CMS will provide funding to each state under their cooperative agreements so each state can begin planning for costs associated with the additional investment efforts into primary and preventive care and implementation of the Model with hospital and provider participation. Such efforts will aim to incentivize the reduction of unnecessary clinical appointments and promote coordination between providers.
2. Boosting Primary Care Investment: AHEAD emphasizes the foundational importance of effective primary care in a high-performing health system by requiring participating states to recruit and engage primary care practices. Improving the quality of primary care can reduce the need for more specialized and expensive treatment by addressing health issues earlier and focusing on prevention. 
3. Advancing Health Equity Principles: AHEAD requires participating states to develop and implement statewide health equity plans, which target disparities in health outcomes by considering social determinants of health. Each state will be required to define, guide, and implement activities to facilitate partnerships between the state, providers, payers, and the community so patients can better access resources like housing and transportation to address social drivers of health.
4. Enhancing Care Coordination: AHEAD will also allow for increased care coordination by leveraging data obtained from various providers about patients’ demographics and health-related social needs. Provider can then use this information to help connect patients to community resources, promoting better integration of patients’ provider networks which may ultimately result in more efficiency and communication throughout each participating state’s healthcare system.

CMS will provide support to states in meeting these goals by:

1. Providing Cooperative Agreement Funding: The funding under each state’s cooperative agreement is intended to support state infrastructure and activities under the AHEAD Model, especially during the pre-implementation period and initial years of operation.
2. Increasing Hospital Global Budgets: AHEAD will allocate a fixed amount of revenue to hospitals for a specified patient population or program, which will encourage hospitals to shift focus from the volume of services delivered to quality of care.
3. Implementing Primary Care AHEAD: AHEAD will provide financial support to states to facilitate enhancement of primary care services, help practices adapt to Medicaid’s ongoing transformation efforts, and increase Medicare investment in primary care.

Timeline

The AHEAD model is scheduled to operate through 2034. There are currently three cohorts of states implementing the program:

Cohort 1 includes Maryland and Vermont, and has an 18-month pre-implementation period from July 2024 – December 2025. Performance will begin in January 2026 and last 9 years.

Cohort 2 includes Connecticut and Hawai’i, and has a 30 month pre-implementation period from July 2024 – January 2026. Performance will begin in January 2027 and last 8 years.

Cohort 3 includes five New York counties (Bronx, Kings, Queens, Richmond, and Westchester) and Rhode Island, and has a 24-month pre-implementation period from January 2025 – December 2026. Performance will last 8 years.

Considerations for Current Participants

Current AHEAD states are recruiting hospitals to participate in Hospital Global Budgets, as well as primary care practices, Federally-Qualified Health Centers, and Rural Health Clinics to engage in Primary Care AHEAD. Performance periods will begin in 2026. Interested healthcare organizations should reach out to their State Medicaid Agencies for more information.

Considerations for Potential Participants

Any governmental body interested in participating can apply for the entire state or a specified sub-region. Participating states can receive up to $12 million to support model implementation over the course of the first five to six years. 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.

Model performance periods for new applicant states are scheduled to begin in either January 2026 or 2027, depending on the cohort a state applies to. CMS is offering a longer pre-implementation period for states that need additional time to prepare.

Participating states will also work closely with CMS on implementation of the program. Participants are required to establish a model governance structure to guide implementation and will be responsible for ensuring healthcare quality and equity targets are being met.

Considerations for Healthcare Entities

Participating hospitals and primary care providers in participating states should anticipate increased cross-sector model governance and resulting governmental transparency. Additionally, mandated targets will likely lead to auditing and data sharing requirements.

See here for more information about Vermont and Connecticut’s AHEAD implementation plans.

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