On March 10, the Centers for Medicare and Medicaid Services announced it was launching a new initiative called the Next Generation ACO Model. According to CMS, the new model is intended to build on the experiences of the current Pioneer ACO Model and the Shared Savings Program. CMS anticipates that it will offer a new opportunity in accountable care—one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.
"The Next Generation ACO Model is one of many innovative payment and care delivery models created under the Affordable Care Act, and is an important step towards advancing models of care that reward value over volume in care delivery," Health and Human Services Secretary Sylvia M. Burwell said in a statement. "This model is part of our larger effort to set clear, measurable goals and a timeline to move the Medicare program—and the health care system at large—toward paying providers based on the quality, rather than the quantity of care they give patients."
A design for experienced ACOs
The Next Generation ACO Model is designed for experienced ACOs, and will allow them to assume higher levels of financial risk and reward than are available under the current ACO models. The new ACOs will be paid using a combination of capitation and fee-for-service models. Modern Healthcare reports that patients will be able to voluntarily enroll in accountable care and in exchange, have their co-pays reduced or eliminated for some services, such as primary care visits.
The Next Generation ACOs will also have access to a number of tools to assist them in managing care for their beneficiaries. The tools will include beneficiary rewards for receiving care from physicians and others who are part of the ACO, coverage of skilled nursing care without prior hospitalization, and expansion of telehealth coverage and post-discharge home services.
The goal of the Next Generation Model is to test whether strong financial incentives for ACOs, coupled with tools that support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service beneficiaries. "This ACO model responds to stakeholder requests for the next stage of the ACO model that enables greater engagement of beneficiaries, a more predictable, prospective financial model, and the flexibility to utilize additional tools to coordinate care for beneficiaries," said Patrick Conway, deputy administrator for Innovation and Quality and chief medical officer for CMS.
Approximately 15 to 20 ACOs are expected to participate in the Next Generation ACO Model, with representation from a variety of provider organization types and geographic regions. The Model will consist of three initial performance years and two optional one-year extensions. CMS will accept ACOs into the Next Generation ACO Model through two rounds of applications in 2015 and 2016, with participation expected to last up to five years. Organizations interested in applying in 2015 must submit a Letter of Intent by May 1, and an application by June 1. Second round Letters of Intent and applications will be available in the spring of 2016.