Overview
MassHealth’s Primary Care Sub-Capitation (Sub-Cap) Program aims to improve health outcomes for MassHealth members by changing how primary care is delivered and funded. The program supports integrated, team-based care and helps build the systems, policies, and technology needed for broader payment reform. The goal of the program is to improve population health outcomes for residents across the Commonwealth.
| What changed | Primary care payment shifted away from a purely visit-based model toward prospective per-member, per-month payments. |
|---|---|
| Who it reaches | The program is embedded in MassHealth’s ACO program and reaches members through participating primary care practices statewide. |
| Why it matters | The model gives practices more predictable revenue and incentivizes investments in enhanced primary care capabilities. |
Statewide Reach
The Sub-Cap program serves all MassHealth ACO members. As of March 2025, approximately 1.1 million MassHealth members, representing 92% of members who qualify to participate in managed care, were enrolled in an ACO and therefore a part of the Sub-Cap program. In addition, approximately 900 primary care practices, including every major health system and all Federally Qualified Health Centers (FQHCs), participate in the program.
Increased Investment in Primary Care
The Sub-Cap program gives primary care practices more predictable, population-based funding that increases investment in primary care.
| $150 Million / Year | ~60-70% Higher | $1.21 Billion |
|---|---|---|
| MassHealth invests an additional $150 million per year in primary care rates for participating practices. The majority of this investment is paid to practices based on their Tier designation. The remaining amount is invested in group practice organization rates beyond the MassHealth fee schedule. | Between 2023 and 2025, sub-capitation rates (including Tier payments) were, on average, ~60-70% higher than what providers would have been paid under fee-for-service for community health centers and group practice organizations. 1 | From April 2023 through December 2024, MassHealth paid a total of $1.21 billion to practices participating in the Sub-Cap program. |
MassHealth has also increased its investment in primary care as a share of total health care spending. Primary care spending increased from 7.6% of total costs in 2023 to 8.4% 2024.2 This growth reflects 9 months of the Sub-Cap program in 2023 versus 12 months in 2024, as well as MassHealth’s continued effort to direct more resources toward primary care.
1 Due to methodology limitations, outpatient hospitals are not included in this analysis.
2 These percentages only include spending on ACO, MCO, and PCC plans.
For more details, see CHIA’s Massachusetts Primary Care and Behavioral Health Spending: 2023 and 2024
Progress Toward Enhanced Care Delivery
The program’s clinical tier structure is designed to encourage more integrated, team-based primary care. Higher tiers set enhanced expectations for access, behavioral health integration, team-based staffing, and population-specific services. Early results show that practices are moving toward higher tiers, and more members are being connected to practices with the infrastructure to deliver additional services.
- 20% of continuing practices increased their Tier designation between 2023 and 2025, showing progress toward enhanced levels of care delivery capability.
- 70% of members were attributed to Tier 3 practices in 2025, up from 50% in 2023, showing that a larger share of members are now connected to practices with enhanced care delivery infrastructure.
Feedback from providers and ACOs suggests that the Tier requirements are supporting concrete practice changes, including adding additional behavioral health staff, updating or implementing compliant screeners, and expanding services such as LARC and substance use disorder supports.
Looking to the Future
Early findings show that the Sub-Cap program has reached statewide scale, increased investment in primary care, and supported practices in building the infrastructure to deliver additional services. MassHealth will continue refining the program based on implementation data and feedback from providers, ACOs, and other stakeholders. These insights will inform ongoing efforts to reduce implementation barriers, support participating practices, and strengthen the program’s role in advancing long-term primary care transformation.