New data from the CMS show that 11 of 18 Next Generation Accountable Care Organizations (ACOs) earned savings in 2016.
The Next Generation ACOs launched in January 2016 and were built on the foundation of the Pioneer ACO model and the Medicare Shared Saving Program. There are 44 Next Generation ACOs.
ACOs generated a combined $836 million in gross savings in 2016, which was nearly double the savings in 2015, Politico noted. The CMS has not publicized the results, which is a departure from the agency's practice in the previous administration.
The Next Generation program “sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care and aims to attain the highest quality standards of care,” the CMS said at the program’s launch.
ACOs in the Next Generation program take on more financial risk (up to 100%) than other programs, but can see a bigger payoff from the savings created through care coordination and care management.
The latest results show that Next Generation and other ACOs can save money and improve quality. Baroma Health Partners in Miami, Triad HealthCare Network in Greensboro, N.C., and Iowa Health Accountable Care in Des Moines all saved more than $10 million each in the Next Generation ACOs.
President Donald Trump's administration, though, has viewed such programs with a wary eye. The CMS recently canceled or rolled back a number of bundled payment models and is looking into a "new direction" for the its innovation center. There were 471 ACOs in 2016. The first quarter of 2017 saw ACOs grow by 11%.
ACOs are seen as one avenue to value-based care, in addition to population health and primary care payment models. Supporters say they marry savings with better care.
Former CMS Communications Adviser Aisling McDonough recently told Healthcare Dive that value-based care isn't going away, but “it’s going to require new champions.” Given the agency's apparently lower interest in ACOs under the new administration, providers and private payers may need to lead the payment reform effort.
One example of a private payer/provider ACO partnership is Aetna and Banner Health. The two companies worked on an ACO for more than five years that resulted in nearly $10 million in savings, a 24% drop in avoidable surgical admissions and a 4% increase in generic drug prescribing rates. The companies are now working together on a larger partnership in Arizona. Aetna hopes to move 75% of its contracts to value-based arrangements.
Tom Grote, CEO joint venture, recently told Healthcare Dive, “If we keep the customer — the end user — in mind and build partnerships with that as our North Star, we believe we will have a more successful, efficient and collaborative health system.”