The AHEAD Model, a new state total cost of care (TCOC) initiative introduced by the Centers for Medicare and Medicaid Services (CMS), can seem overwhelming if you’re trying to understand how it impacts healthcare in the states participating.
If you’re concerned about rising healthcare costs, access to quality care, and health equity, this comprehensive healthcare guide is for you!
In this guide, you’ll learn how the Center for Medicare & Medicaid’s AHEAD Model aims to:
- Improve population health;
- Advance health equity, and;
- Control healthcare costs.
These insights will help you grasp how this emerging model can lead to better healthcare outcomes and more equitable access.
Please note that I am writing this article as a Maryland resident and will highlight Maryland’s participation in the AHEAD model.
Read on to understand how the AHEAD Model can transform healthcare for Maryland residents.
What is the AHEAD Model?
AHEAD is an acronym for States Advancing All-Payer Health Equity Approaches and Development.
- The AHEAD model is a comprehensive framework designed to incentivize states to implement broad changes in delivering and paying for healthcare.
- It’s a new healthcare model that expands on existing state-based models, such as those in Vermont, Maryland, and Pennsylvania.
- Unlike previous models, AHEAD will be implemented across multiple states simultaneously. Through AHEAD, states can increase funding for primary care while controlling healthcare costs.
- The model promotes a collaborative approach to healthcare that aims to reduce health disparities and improve health outcomes for everyone, especially in underserved communities.
Bottom Line: The AHEAD healthcare model aims to ensure all Americans get the care they need by improving and managing healthcare costs.
Summarizing the CMS AHEAD Model | Key Features
- State Total Cost of Care (TCOC) Framework: The model holds participating states accountable for managing all healthcare costs within their borders, not just those of specific programs like Medicare and Medicaid.
- Primary Care Investment: The model aims to strengthen primary care by increasing investment and aligning payment reforms within existing state Medicaid programs.
- Health Equity Focus: The states participating must develop specific plans to address health disparities and improve health outcomes for underserved populations.
- Hospital Global Budgets: Hospitals participating in the AHEAD model will receive a fixed budget to cover all patient care rather than being paid for each service.
The AHEAD model aims to significantly improve and optimize states’ healthcare delivery systems by involving all types of health insurance providers (Medicare, Medicaid, and private insurers) in a collaborative effort towards common healthcare goals.
The AHEAD Model’s 3 Primary Goals
Goals are broader, long-term aspirations or desired outcomes; they provide a general direction, vision, and purpose for the model
1. Enhance Healthcare Quality
The AHEAD model encourages a shift from a fee-for-service model to value-based care, which focuses on improving patient outcomes rather than the quantity of services provided and promotes evidence-based practices, preventive care, and care coordination.
2. Manage Healthcare Costs
The AHEAD model aims to control healthcare costs by holding states accountable for the total cost of care and introducing hospital global budgets.
The model incentivizes states to promote cost-efficiency and develop strategies to reduce unnecessary spending.
3. Promote Health Equity
The model aims to ensure all Americans have access to high-quality healthcare regardless of their backgrounds.
States participating in the AHEAD model must coordinate efforts to improve overall health, control healthcare costs, and reduce health disparities by involving different insurance providers.
The AHEAD Model’s 3 Objectives
1. Improve Population Health
Population health means looking at the health of a whole group of people (e.g., everyone living in a city or everyone working at a company).
- Think of population health like checking how many people in your neighborhood have high blood pressure instead of asking one person if they do.
- Population health shifts the focus from individual patients to communities while studying health patterns and trends to understand and improve the well-being of the entire group.
A population health approach to healthcare aims to identify and address the root causes of health issues, such as social determinants of health, environmental factors, and lifestyle behaviors, to improve the overall health and well-being of the population.
The model aims to improve the overall health of state populations by addressing the social determinants of health and enhancing primary care.
2. Advance Health Equity
The AHEAD model prioritizes reducing health disparities and ensuring equitable access to high-quality care for all individuals, regardless of their background or circumstances.
For states to improve health equity, they need to find and fix problems in their healthcare system that make it harder for certain groups of people to get the care they need. Moreover, healthcare systems must ensure workers understand and respect different cultures and create programs addressing each community’s unique needs.
Here are several specific examples of how healthcare systems can implement the AHEAD model’s principles to ensure equitable care for diverse populations:
Developing a Culturally Competent Workforce:
- Training: Provide ongoing training for staff on cultural awareness, communication styles, and health beliefs of diverse populations.
- Recruitment: Recruit and retain a diverse workforce that reflects the communities served, including hiring bilingual and bicultural staff.
- Interpretation and Translation Services: Offer comprehensive language services to ensure effective communication and understanding between patients and providers.
Create a Culturally Tailored Care:
- Community Health Needs Assessments: Conduct regular assessments to identify different cultural groups’ specific health needs and disparities.
- Targeted Programs and Interventions: Develop programs that address various communities’ unique health risks and concerns, considering cultural preferences and practices.
- Patient Education Materials: Create educational materials in multiple languages and formats that are culturally appropriate and easy to understand.
Community Partnerships:
- Collaborate with Community Organizations: Partner with local organizations that serve diverse communities to understand their needs, co-develop programs, and provide culturally relevant care.
- Community Advisory Boards: Establish advisory boards of community members from diverse backgrounds to provide input and guidance on healthcare services and programs.
- Outreach and Engagement: Actively engage with diverse communities through outreach events, health fairs, and educational workshops to build trust and improve access to care.
3. Control Healthcare Costs
The AHEAD model employs various strategies to control healthcare costs, such as:
- Promoting value-based care;
- Implementing hospital global budgets and;
- Encouraging care coordination.
Bottom Line: These approaches aim to incentivize efficient and effective care delivery while reducing unnecessary spending and waste.
An Example of How the AHEAD Model Controls Healthcare Costs
Scenario: A patient with diabetes needs ongoing care.
Traditional Model (Fee-for-service): The patient sees multiple specialists for different aspects of their care (endocrinologist, cardiologist, podiatrist, etc.).
The fee-for-service model bills each visit and test separately, leading to high costs and the potential for redundant or uncoordinated care.
AHEAD Model (Value-Based Care, Hospital Global Budgets, Care Coordination)
- Value-Based Care: Healthcare providers are incentivized to keep patients healthy and out of the hospital. By focusing on preventive care, such as regular check-ups, education on diet and exercise, and medication management, healthcare providers can reduce the risk of complications and costly hospitalizations.
- Hospital Global Budgets: The hospital receives a fixed amount for the patient’s care, regardless of how many needed visits or tests. AHEAD encourages hospitals to focus on efficient care and avoid unnecessary procedures or tests.
- Care Coordination: A care coordinator works with patients to meet all their healthcare needs by helping them schedule appointments, coordinating with specialists, and navigating the healthcare system. The goal is to reduce the risk of duplicated services or gaps in care.
Bottom Line: The patient receives better-coordinated care, improving health outcomes and lower costs.
Healthcare providers and hospitals are rewarded for focusing on quality and efficiency, while patients benefit from a more personalized and effective healthcare experience.
This example demonstrates how the AHEAD model’s strategies can work together to achieve the goal of controlling healthcare costs while also improving the quality of care for patients.
The Key Components of the AHEAD Model
1. Cooperative Agreement Funding
CMS will provide financial support to participating states to facilitate the planning and implementation of the AHEAD Model.
This funding supports a wide range of activities, including:
- Developing infrastructure and partnerships;
- Data collection and analysis;
- Quality improvement initiatives and;
- Community engagement efforts.
2. Hospital Global Budgets (Optional)
Participating hospitals can choose to operate under a global budget, which allocates a fixed revenue amount for patient care.
This approach incentivizes hospitals to reduce unnecessary hospitalizations, improve care coordination, and focus on value-based care.
The AHEAD Model also offers alternative payment models, such as partial capitation.
3. Primary Care AHEAD
This component aims to transform primary care delivery by increasing investments in:
- Primary care practices;
- Integrating behavioral health services;
- Care coordination & patient engagement;
- Addressing social determinants of health.
Bottom Line: The goal is to create a more comprehensive, patient-centered approach to primary care.
4. Statewide Total Cost of Care (TCOC) Accountability
Under the AHEAD model, participating states are held accountable for managing the total cost of care for all payers (Medicare, Medicaid, and commercial insurance) within their borders.
States are incentivized to implement strategies that reduce healthcare spending while improving quality and equity.
Maryland’s Vision with the AHEAD Model
As a participant in Cohort 1, Maryland will undergo an 18-month pre-implementation period starting in July 2024. The first performance year will begin in January 2026, and the state will work toward nine performance years in total.
This extended period allows Maryland to lay a robust foundation for the model’s success, with efforts concentrated on:
- Strengthening Primary Care: Enhancing primary care services to act as the cornerstone of Maryland’s healthcare system.
- Improving Health Equity: Developing and implementing a Statewide Health Equity Plan to address and reduce health disparities.
- Managing Costs: Implementing global hospital budgets ensures predictable funding and efficient care delivery.
How the AHEAD Model Benefits Maryland’s Healthcare System
CMS officially launched the AHEAD Model on July 2, 2024, with Maryland, Connecticut, and Vermont leading the way as the first participating states.
Hawaii may also join the initiative soon.
Improved Care Coordination
The AHEAD Model does emphasize care coordination but focuses on aligning incentives for providers across all payers (Medicare, Medicaid, private insurance) to work together to improve patient health outcomes and control costs.
This alignment encourages collaboration and integration of care across different settings.
Enhanced Primary Care Services
Increased funding and support for primary care practices in Maryland are potential outcomes of the AHEAD Model; however, they are not an explicit requirement.
The AHEAD model encourages states to develop strategies that prioritize primary care and address social determinants of health, but the specific mechanisms may vary.
A Focus on Health Equity
The AHEAD Model strongly emphasizes health equity and requires states to develop and implement strategies to reduce disparities in health outcomes.
Additionally, the model addresses underserved communities’ needs and ensures equitable access to care.
Financial Stability for Hospitals
With global budgets, hospitals in Maryland will have a stable and predictable revenue stream, allowing them to focus on improving care quality and patient outcomes rather than volume-driven incentives.
Bottom Line: This AHEAD model aims to shift away from fee-for-service payments, incentivizing volume towards predictable budgets and rewarding providers for keeping patients healthy and managing their overall care.
Maryland’s AHEAD Application and its Implementation Timeline
Click this link to read Maryland’s AHEAD Model application, submitted by the Maryland Department of Health (MDH) and the Maryland Health Services Cost Review Commission (HSCRC).
- Pre-Implementation Period (January 2024 – June 2025): Planning and infrastructure development for the full model implementation.
- Performance Years (Starting July 2025): Active implementation and ongoing monitoring of the model’s impact on healthcare quality, cost, and equity.
Maryland Cohorts and Application Details
The AHEAD Model divided applying states into three cohorts based on their readiness:
- Cohort 1: 18-month pre-implementation period.
- Cohort 2: 30-month pre-implementation period.
- Cohort 3: 24-month pre-implementation period.
Applications for the final cohort were due by August 12, 2023.
Maryland’s inclusion in Cohort 1 reflects its readiness to lead in healthcare transformation and innovation.
Conclusion
The AHEAD Model represents a transformative approach to healthcare:
- It aligns multiple payers and focuses on population health, cost management, and health equity.
- Maryland’s participation underscores its commitment to advancing healthcare for all its residents.
- By leveraging the model’s components, Maryland aims to create a more equitable, efficient, and effective healthcare system.
For more information on the AHEAD Model and Maryland’s role in this initiative, visit the Center for Medicare & Medicaid Services website and stay updated on the latest developments and resources.
References
- Centers for Medicare & Medicaid Services (CMS). (2024). States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. Retrieved from CMS.gov
Ryan Miner, MBA | Co-Founder and Podcast Host | The Senior Soup
Hi, I'm Ryan!
I co-founded The Senior Soup Soup with Raquel Micit in September 2022. Together, we host The Senior Soup Podcast.
I am a community relations manager for Ennoble Care in Maryland, where I am responsible for marketing our home-based primary care healthcare practice.
I have over 15 years experience in healthcare, senior services, senior care, marketing, public policy, and search engine optimization.
I have a MBA from Mount St. Mary's University and a BA from Duquesne University.
