New Generation ACO Model Announced

The U.S. Department of Health and Human Services has announced a new initiative from the Centers for Medicare & Medicaid Services’ Innovation Center (CMS Innovation Center), the Next Generation Account-able Care Organization (ACO) Model of payment and care delivery.

According to the press release issued last week, the new project was established to “encourage quality improvement and care coordination, helping to move our health care system to one that achieves the Department’s goals of better care, smarter spending, and healthier people.”

Interested ACOs throughout the country must apply by June and only 20 will be selected. The new pilot program is based on the Pioneer ACO Model and the Medicare Shared Savings Program (Shared Savings Program). According to the CMS website “the Pioneer ACO Model is designed for health care organizations and providers that are already experienced in coordinating care for patients across care settings. It will allow these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Services Program. And it is designed to work in coordination with private payers by aligning provider incentives, which will improve quality and health outcomes for patients across the ACO, and achieve cost savings for Medicare, employers and patients.”

CMS says “the Next Generation ACO Model offers 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 ACOs in the Next Generation Model will take on greater performance risk than ACOs in current models, while also potentially sharing in a greater portion of savings. To support increased risk sharing, ACOs will have a stable, predictable benchmark and flexible payment options that support ACO investments in care improvement infrastructure that provides high quality care to patients.

According to CMS, the new ACO model encourages greater coordination and closer care relationships between ACO providers and beneficiaries. ACOs will have a number of tools available to enhance the management of care for their beneficiaries. These tools include rewards to beneficiaries for receiving their care from physicians and professionals participating in their ACOs, coverage of skilled nursing care without prior hospitalization and modification to expand coverage of telehealth and post-discharge home services to support coordinated care at home.

The Next Generation ACO Model also supports patient-centered care by providing the opportunity for beneficiaries to confirm a care relationship with ACO providers and to communicate directly with their providers about their care preferences.

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, 2015, and an application by June 1, 2015. Second round Letters of Intent and applications will be available in spring 2016.