AHEAD and Geo AHEAD

Every CMMI model discussed in this series so far assigns accountability to an organization: an ACO assumes risk for attributed beneficiaries, a specialist absorbs payment adjustments for episode performance, a manufacturer negotiates pricing for a drug category. AHEAD and its Geo AHEAD component do something different. They assign accountability to a place. A state agrees to manage total cost of care across all payers for its entire population. Hospitals accept global budgets that replace fee-for-service claims with prospective biweekly payments. And in Geo AHEAD, entities that may not be providers at all, health plans, digital health companies, technology firms, bid competitively to take financial responsibility for Medicare FFS beneficiaries who live in a geographic region, regardless of where those beneficiaries currently receive care.

This is the model that makes geography the organizing principle of cost control. It is the direct descendant of Maryland’s four-decade experiment with hospital rate regulation, the first Trump administration’s Geographic Direct Contracting model that was cancelled in 2022 under Biden, and the second Trump administration’s strategic conviction that total cost of care accountability works better when it covers everyone in a region rather than only the patients who happen to be attributed to a willing ACO.

From Maryland to AHEAD

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Maryland has regulated hospital payment since the 1970s. The state’s Health Services Cost Review Commission sets rates that all payers, Medicare included, must follow for hospital services. In 2014, CMS and Maryland expanded that rate-setting authority into a total cost of care framework through the Maryland Total Cost of Care Model, in which the state accepted responsibility for limiting per capita Medicare spending growth while maintaining quality. The most recent evaluation found net Medicare savings of $689 million and reduced hospital readmissions.

AHEAD, originally launched in 2023 as the States Advancing All-Payer Health Equity Approaches and Development Model, was designed to extend Maryland’s approach to additional states. Six states were selected across three cohorts. Maryland entered as Cohort 1, with its first AHEAD performance year beginning January 1, 2026, succeeding the Maryland TCOC model that ended December 31, 2025. Connecticut, Hawaii, and Vermont compose Cohort 2. Rhode Island and New York (specifically the Bronx, Kings, Queens, Richmond, and Westchester counties) compose Cohort 3. Each state received up to $12 million in implementation grant funding.

On September 2, 2025, CMS announced the most significant redesign of any active model in the 2025 portfolio. The changes, which the Trump administration implemented rather than cancelling the Biden-era model, reshaped AHEAD’s structure, timeline, and policy requirements. The model was renamed Achieving Healthcare Efficiency through Accountable Design, preserving the acronym while replacing the health equity framing with an efficiency framing. The end date for all cohorts was extended to December 31, 2035. Performance periods for Cohorts 2 and 3 were pushed to January 1, 2028, giving those states additional preparation time. CMS announced it would open the model to up to two additional states in July 2026, with performance beginning in 2028 or 2029. On November 13, 2025, Maryland signed the agreement formalizing its continued participation.

The Three Layers of AHEAD

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AHEAD operates through three interlocking mechanisms, each targeting a different segment of the health care system within participating states.

Hospital Global Budgets. Participating hospitals receive a prospective, fixed annual revenue amount from Medicare in place of traditional FFS claims. Payments arrive biweekly. The global budget is built from historical net patient revenue, weighted most heavily toward recent years (60 percent weight on the most recent year, 30 percent on the year before, 10 percent on two years prior). All Medicare FFS payments for services paid under IPPS and OPPS are included in the baseline. Professional services rendered in hospital settings are excluded.

The global budget fundamentally reorients hospital financial incentives. Under FFS, a hospital’s revenue increases with volume: more admissions, more procedures, more outpatient visits generate more claims. Under a global budget, the hospital receives the same total revenue regardless of volume. Reducing unnecessary utilization, preventing avoidable admissions, and shifting care to lower-cost settings no longer reduce the hospital’s income. They protect it. A hospital that reduces ED visits through better chronic disease management still receives its full global budget. A hospital that increases surgical volume beyond its budget cap does not receive additional Medicare payment for the excess.

CMS made several important adjustments in the September 2025 changes. A payment floor for Critical Access Hospitals ensures that CAH global budget payments are no lower than current Medicare FFS reimbursement at 101 percent of costs (before sequestration). If the calculated global budget falls below what Medicare would have paid under FFS, CMS makes an additional payment to close the gap. A market shift adjustment now excludes out-of-area patients beyond 120 miles and below a one percent threshold, preventing hospitals from bearing financial risk for patients whose care patterns they cannot influence, such as seasonal residents and travelers. CMS also removed the option for states with existing hospital rate-setting authority to design their own Medicare FFS global budget methodology. All states now use the CMS-designed methodology, standardizing the framework across participating states.

By the fourth performance year, 30 percent of Medicare FFS revenue within the state or sub-state region must be tied to a hospital global budget. Hospital participation is voluntary, but states must actively recruit hospitals, and the 30 percent threshold creates pressure for broad enrollment.

Primary Care AHEAD (PC AHEAD). The September 2025 changes added a capitated primary care payment pathway within the model. PC AHEAD allows primary care practices in AHEAD states to receive prospective, capitated payments for Medicare FFS beneficiaries rather than billing on a per-visit basis. This shifts primary care payment from volume to panel management, complementing the hospital global budget’s shift of hospital payment from volume to population health.

State Total Cost of Care Targets. Each participating state must meet targets for total per-capita Medicare FFS spending growth, set relative to national benchmarks. States also set primary care investment targets to ensure that spending shifts toward prevention and care coordination rather than simply constraining hospital revenue. The September 2025 changes replaced Health Equity Plans with Population Health Accountability Plans (PHAPs), reorienting the population health component toward chronic disease prevention consistent with the MAHA agenda. States also face new transparency requirements around their TCOC and primary care investment performance.

Geo AHEAD: The Geographic ACO

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Geo AHEAD is the most conceptually radical element in the 2025 CMMI portfolio. It assigns total cost of care accountability for Medicare FFS beneficiaries based on where they live, not based on which provider they chose or which ACO they were attributed to through claims history.

The mechanism works as follows. In each participating AHEAD state or sub-state region, CMS will select at least two Geo Entities through a competitive bidding process. These Geo Entities submit discounted bids against a CMS-determined TCOC benchmark. The entity whose bid offers the largest discount relative to the benchmark receives competitive advantage in beneficiary alignment. Geo Entities then assume financial responsibility for the total cost and quality of care for attributed beneficiaries through two-sided risk arrangements, sharing in both savings and losses.

Beneficiary alignment in Geo AHEAD uses a multi-layered approach. Beneficiaries can voluntarily select a Geo Entity. Those who do not volunteer may be aligned through claims-based attribution (similar to how MSSP attributes beneficiaries to ACOs based on primary care utilization). Any remaining unattributed beneficiaries, those who are not already attributed to an MSSP ACO, a LEAD ACO, or another CMS accountable care program, are attributed geographically. For the first time in Medicare FFS, every beneficiary in an AHEAD region will be in an accountable care relationship, either through an existing ACO or through geographic assignment to a Geo Entity.

Geo Entities do not have to be providers. CMS is explicit on this point. Ownership, management, and control of Geo Entities is not required to be provider-led. Health plans, technology companies, digital health platforms, and other non-provider organizations may form and lead Geo Entities. This opens the door to an MA-plan-like accountability structure operating within Original Medicare. A health plan that currently manages MA members in a region could bid to manage the TCOC of FFS beneficiaries in the same region through Geo AHEAD, using its existing provider networks, care management infrastructure, and data analytics capabilities. A digital health company with population health management capabilities could bid to take geographic risk without owning a single clinic.

The two contract periods are 2028 through 2031 and 2032 through 2035. The first performance year for Geo AHEAD will not begin until 2028, giving CMS and participating states time to develop the bidding infrastructure, attribution algorithms, and quality measurement frameworks the program requires. Providers who care for Geo AHEAD beneficiaries will continue to receive traditional FFS payments directly from CMS. The Geo Entity does not intermediate claims or payment flow. It assumes the financial risk overlay: if total spending for its attributed population comes in below the discounted bid benchmark, the entity earns shared savings. If spending exceeds the benchmark, the entity owes shared losses.

The Geographic Direct Contracting Lineage

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Geo AHEAD is the resurrection of the Geographic Direct Contracting model that the first Trump administration announced in December 2020 and the Biden administration cancelled in early 2022. The original Geo DCE model proposed testing geographic accountability in four to ten regions over six years, with Direct Contracting Entities taking full risk (100 percent shared savings and losses) for Medicare FFS beneficiaries in defined target regions. The Biden administration cancelled Geo after stakeholders raised concerns about beneficiary assignment without consent, overlap with existing ACO models, and the potential for non-provider entities to profit from Medicare FFS risk management without delivering care.

The Trump administration’s decision to embed geographic accountability within AHEAD rather than launching a standalone model reflects lessons from that failed first attempt. By housing Geo AHEAD within a state-led TCOC framework, CMS creates a governance layer (the state) between the federal program and the Geo Entities. The state sets population health targets, recruits hospitals into global budgets, and bears its own accountability for TCOC performance. Geo Entities operate within that framework, not independently of it. The competitive bidding process, with at least two Geo Entities per region, addresses the beneficiary choice concern by ensuring that geographically assigned beneficiaries have alternatives. And the continued FFS payment flow to providers means that Geo Entities do not function as insurers. They function as risk-bearing care coordination and population health management organizations that are financially accountable for outcomes they must achieve through provider partnerships rather than payment control.

The Choice and Competition Requirements

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The September 2025 changes require participating states to implement at least two policies from a CMS-defined menu designed to promote choice and competition in health care markets. States must select at least one policy promoting choice and at least one promoting competition. The menu includes options such as banning noncompete clauses for physicians, implementing Medicaid site neutrality, developing innovative telehealth models, repealing any-willing-provider laws, changing scope of practice laws, and removing certificate of need requirements for non-hospital settings.

These requirements are unprecedented for a CMMI model. CMS is not merely testing a payment mechanism. It is conditioning federal model participation on state-level market reform. A state that wants AHEAD’s hospital global budgets and Geo AHEAD’s geographic accountability infrastructure must also commit to regulatory changes that reduce entry barriers and increase competition among providers. The policy menu is drawn directly from the CMMI Strategic Refresh’s “Promoting Choice and Competition” pillar, making AHEAD the operational vehicle for that strategic priority.

For states like Maryland, which has operated under hospital rate regulation for decades, or Vermont, which has a small and consolidated hospital market, these requirements create real tension. The market structures that made these states interested in AHEAD in the first place, consolidation that enables coordinated payment reform, are the same structures that the choice and competition requirements are designed to disrupt. Whether states can simultaneously implement global budgets (which work best with cooperative hospital participation) and competitive market reform (which works by introducing new entrants and reducing incumbent leverage) is an open question.

What AHEAD Means for the Portfolio

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AHEAD occupies a unique position in the CMMI portfolio because it is the only model that operates at the state level and the only model that attempts to coordinate Medicare, Medicaid, and commercial payer spending simultaneously. Every other model in Series 1, WISeR, ACCESS, BALANCE, MAHA ELEVATE, LEAD, ASM, operates within a single payer silo (Medicare FFS) or a single program (Medicaid through BALANCE’s state component). AHEAD requires states to align hospital global budgets and primary care payment reform across all payers. The Medicaid agency must develop a Medicaid-specific global budget methodology. Commercial payers participate voluntarily, but states must recruit at least one commercial payer during the first performance year.

This all-payer structure is what gives AHEAD its theoretical power. Hospital behavior does not change when only one payer shifts to global budgets. If Medicare pays a global budget but commercial insurers continue paying FFS, the hospital has a financial incentive to shift volume toward commercially insured patients. When all major payers participate, the hospital faces consistent incentives across its entire revenue base. The same logic applies to primary care: capitated payment from Medicare alone does not transform practice behavior if 60 percent of the practice’s patients are billed under commercial FFS.

The all-payer structure is also what makes AHEAD the hardest model to implement. State government capacity, commercial payer willingness, hospital recruitment, primary care transformation, Geo Entity development, and TCOC target achievement must all advance simultaneously. Maryland has spent 50 years building the institutional infrastructure for all-payer hospital payment regulation. Connecticut, Hawaii, Vermont, Rhode Island, and New York have not. Whether five additional states can build that capacity during a multi-year implementation period while simultaneously meeting choice and competition requirements, recruiting hospitals, developing Medicaid global budgets, and preparing for Geo AHEAD’s 2028 launch is the model’s central implementation question.

The two new state slots opening in July 2026 will test demand for AHEAD participation in the current policy environment. States that apply will be committing to a decade-long transformation with significant governance, operational, and political requirements. The states most likely to apply are those with existing multi-payer reform experience, strong executive branch health policy capacity, and political environments receptive to both global budgets and market competition requirements.

What Comes Next

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AHEAD’s immediate timeline is driven by Maryland’s Cohort 1 performance year, which began January 1, 2026. Maryland’s experience in the first year of AHEAD will provide the most visible test of whether a state that has operated under hospital rate regulation for decades can transition successfully to the revised AHEAD framework, with its new efficiency focus, population health accountability plans, choice and competition requirements, and standardized CMS-designed global budget methodology. Cohorts 2 and 3 are in pre-implementation through 2027, with performance beginning in January 2028.

Geo AHEAD’s first contract period begins in 2028. Between now and then, CMS must develop the competitive bidding specifications, TCOC benchmark methodology, quality measurement framework, and attribution algorithms that will govern how Geo Entities operate. The design choices CMS makes in those specifications will determine whether Geo AHEAD attracts capable, well-capitalized organizations that can genuinely manage population health, or whether it attracts financial intermediaries that profit from actuarial spread without improving care delivery.

The most consequential long-term question is whether Geo AHEAD’s non-provider eligibility produces a new category of Medicare FFS risk-bearing entity that looks functionally similar to an MA plan but operates within Original Medicare’s benefit structure. If health plans can bid to manage FFS beneficiaries’ total cost of care in a geographic region, the structural distinction between Medicare Advantage (capitated, plan-managed) and Original Medicare (fee-for-service, beneficiary-directed) begins to erode from the Original Medicare side. That convergence is either the logical endpoint of accountable care policy or the privatization of Original Medicare through the back door, depending on who is evaluating it.

Related Reading

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MCR-05_07 AHEAD States: Hospital Global Budget Strategy MCR-06_04 Remote Patient Monitoring and the AHEAD/ACO Value Stack MCR-00_01 The Trust Fund Clock