The AHEAD Model in Maryland: What It Is and What It Means for Hospitals

By Two Pillars & Co Advisory Group · Sources checked October 2026

What is the AHEAD Model?

The Centers for Medicare & Medicaid Services describes AHEAD, the Achieving Healthcare Efficiency through Accountable Design Model, as a voluntary state total cost of care model that aims to drive state and sub-state regional health care transformation and multi-payer alignment, improving the total health of a state’s population while lowering costs. It includes five state participants: Maryland in Cohort 1, Connecticut and Hawaii in Cohort 2, and Rhode Island and New York in Cohort 3, and it runs through December 31, 2035 for all cohorts.^[1] CMS notes that AHEAD builds on earlier state models, including the Vermont All-Payer ACO Model and the Maryland Total Cost of Care Model.^[1]

CMS describes four primary components: cooperative agreement funding for state planning; Primary Care AHEAD, a payment program for primary care practices; hospital global budgets, which provide hospitals with a predictable amount of revenue for the upcoming year for a specific population such as Medicare fee-for-service beneficiaries; and Geo AHEAD, which uses competitive bidding to select multiple geographic entities accountable for total cost of care and quality for attributed beneficiaries.^[1] Maryland already had global budgets and a primary care program, so the new elements for Maryland are mainly the federal design of Medicare hospital global budgets and Geo AHEAD.

How is it different from the Total Cost of Care Model?

The Total Cost of Care Model, begun in 2019, added state-level accountability for all Medicare beneficiary spending to Maryland’s all-payer global budgets, plus the Care Redesign Program and the Maryland Primary Care Program.^[4] AHEAD keeps total cost of care accountability and adds all-payer targets, but changes who runs the Medicare hospital piece. Under the amended AHEAD agreement, the State-designed all-payer global budget method applies only in performance years 1 and 2 (2026 and 2027), and CMS’s hospital global budget method for Medicare fee-for-service applies from performance year 3 (2028).^[2] The Regulatory Working Group summarizes the shift: AHEAD will transition rate-setting authority for Medicare fee-for-service from the HSCRC to CMS’s Innovation Center, while the HSCRC continues to set hospital rates and global budgets for all other payers.^[3]

What must Maryland deliver? The statewide targets

The agreement sets statewide accountability targets. The first is the Medicare fee-for-service total cost of care target: for each performance year, the State must limit Medicare fee-for-service per-beneficiary spending to a target that CMS calculates using a savings component. CMS uses a 2023 baseline year, with a per-beneficiary-per-year baseline amount of $14,107.^[2]

For performance years 8 through 10, the agreement expects Maryland’s Medicare fee-for-service cost to grow at the national trend.^[2] The Regulatory Working Group reports that the Medicare fee-for-service target has been expressed as $460 million, the projected effect of a 2.66 percent trend reduction using national trend estimates, and that because Medicaid and Medicare Advantage rates are tied to Medicare fee-for-service, HSCRC estimates the impact under AHEAD at $870 million versus national trends across all three programs.^[3]

There are also all-payer and primary care targets. The State must establish and meet all-payer total cost of care growth targets from performance year 2, and if it exceeds the target in any two performance years within three consecutive years, CMS will issue a warning notice and may issue an enforcement action notice. The State must also meet Medicare fee-for-service and all-payer primary care investment targets.^[2]

How do hospital global budgets work under AHEAD?

In performance years 1 and 2, hospitals continue under the CMS-approved, State-designed all-payer global budget method that Maryland has used. From performance year 3, CMS calculates and pays the Medicare fee-for-service hospital global budget for each participant hospital under a CMS-designed methodology, while the State continues to set hospital global budgets for commercial payers and for Medicaid under its own authority.^[2] The State must also ensure that at least 85 percent of in-state, all-payer acute care hospital revenue for Maryland residents is paid to participant hospitals under those global budgets.^[2]

The agreement defines who participates. An Eligible Hospital is an acute care hospital, critical access hospital or rural emergency hospital located in Maryland that meets the model’s criteria, and a Participant Hospital is an Eligible Hospital that has executed a Hospital Participation Agreement with CMS and the State and a global budget revenue agreement with the State.^[2] The details of the 2028 transition are covered in the next guide.

What about primary care and Geo AHEAD?

Primary care is a pillar of AHEAD. Under Primary Care AHEAD, practices may receive a prospective, risk-adjusted Enhanced Primary Care Payment, choosing among four payment pathways, two of which offer prospective payments in lieu of part or all of Medicare fee-for-service payments.^[1] Maryland’s existing primary care program continues as MDPCP-AHEAD, designed as a continuation of the MDPCP Track 2 implemented under the Total Cost of Care Model, for performance years 1 through 3 (2026 to 2028), with CMS and the State evaluating whether to continue it in later years.^[2]

Geo AHEAD will operate in Maryland beginning in performance year 3, with two performance periods: January 1, 2028 through December 31, 2031, and January 1, 2032 through December 31, 2035.^[2] CMS describes Geo AHEAD as selecting multiple geographic entities by competitive bidding to ensure beneficiary choice and promote market competition, with entities accountable for total cost of care and quality for attributed beneficiaries.^[1]

What is the HSCRC doing to implement AHEAD?

The HSCRC says its work has shifted from negotiating AHEAD to implementing it. In September 2026 its Acting Executive Director described the aim as adapting Maryland’s multi-payer global budget system to align with CMS’s Medicare fee-for-service model before the 2028 changeover, using a “minimum viable product” approach of practical, incremental updates rather than disruptive overhauls, such as moving to a calendar-year budget framework. The stated objectives are to protect the affordability of non-Medicare payers, maintain core performance incentives and publish final guidance early.^[5]

The Commission’s October 2026 workplan lists as completed the all-payer total cost of care growth and primary care investment targets and the operationalization of the Medicare Advantage stabilization policy. Work in progress includes draft adjustments, Bridge Adjustment and quality-based reimbursement policies, a rate model for multi-payer global budgets, an implementation plan for forward funding of uncompensated care and the operationalization of the commercial cost shift. Still to come are the core volume policies (market shift, demographic and surge), the hospital-acquired conditions policy, and reports on physician costs and bed capacity. Items marked draft are staff proposals that the Commission has not yet adopted, so details can change.^[5]

What does AHEAD mean for hospital executives?

Four consequences stand out. First, the Medicare portion of revenue will follow federal rules from 2028, while commercial and Medicaid revenue stays with the HSCRC. Second, the statewide savings schedule means the system as a whole must become more efficient each year through 2032, and the State’s policy choices, such as cost-shifting to commercial payers, will affect every hospital. Third, quality and primary care alignment become more important because the targets involve all payers and primary care investment. Fourth, the model is time-limited: CMS must notify the State by the end of 2035 whether it will expand the model, extend it or announce a new model, and if the State transitions to Medicare fee-for-service the agreement provides for a transition period of 60 months.^[2]

Executives should treat the agreement as a planning document. It is public, it is specific, and it sets dates that determine when changes arrive. The next guide in this series lays out those dates for 2028 and 2029.

Frequently asked questions

What to do next

1. Read the agreement’s Medicare savings schedule.
2. Map which revenue streams follow CMS rules from 2028.
3. Review primary care and Geo AHEAD implications for your service area.
4. Read the 2028 and 2029 guide next.