The Centers for Medicare & Medicaid Services (CMS) on Sept. 5 introduced the States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. This initiative is designed to enhance health care management with a focus on chronic condition treatment, behavioral health, and other medical conditions.
The AHEAD model implements hospital global budgets (HGBs), fixed annual budgets for participating hospitals calculated based on previous Medicare and Medicaid payments. These budgets are expected to reduce avoidable utilization, encourage collaboration with providers, and improve health outcomes. CMS will require hospitals and primary care practices to collect demographic and social needs data to identify and mitigate health disparities.
States must develop a Medicaid hospital global budget methodology, subject to CMS approval, and use regulatory levers to ensure participation from state employee health plans, marketplace qualified health plans, or other commercial payers. CMS expects the inclusion of Medicaid and commercial payers will promote population health improvements and equity through care delivery redesign, reduction of unnecessary utilization, increased utilization of high-value and preventative services, and appropriate chronic condition management.
States may receive up to $12 million from CMS to support state implementation. The model’s performance period is expected to begin in January 2026 or January 2027 and conclude in December 2034.
Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.
