CMS announces Next Generation ACO participants

Medicare ACO programs now include 477 organizations

See the Advisory Board's take on this story.

CMS on Monday announced that 21 organizations will initially participate in its Next Generation Accountable Care Organization (ACO) Model.  

The model, unveiled in March 2015, uses a combination of fee-for-service and capitation. It creates four payment systems and two risk tracks for its participants, including one with almost full risk.

Under the Next Generation ACO model, beneficiaries will be able to voluntarily sign up to participate in the ACOs. In exchange, they will pay reduced or no copayments for certain services, such as primary care visits. The model also will allow providers more freedom to use telemedicine and home visits.

What ACOs need to know about CMS's 'Next Generation' model

In total, CMS announced 121 new participants across its various ACO programs, including:

  • The 21 Next Generation ACOs, which will include 650,000 Medicare beneficiaries at the program's start;
  • 100 new ACOs in the Medicare Shared Savings Program (MSSP); and
  • 147 renewing MSSP ACOs.

In addition, CMS announced that 41 MSSP ACOs have joined CMS' ACO Investment Model, a "pre-paid shared savings" model that will help new ACOs form in underserved areas and existing ACOs move into arrangements that bring more financial risk.

Six factors providers need to consider when choosing an ACO model

In total, all four ACO programs now include 477 organizations, which will provide care for a total of about 8.9 million Medicare beneficiaries.

According to CMS, a second round of applications for the Next Generation Model will open in the spring (Frieden, MedPage Today, 1/11; Alonso-Zaldivar, AP/Sacramento Bee, 1/11; CMS release [1], 1/11; CMS release [2], 1/11; Frieden).

The Advisory Board's take

Rob Lazerow, Health Care Advisory Board

CMS's announcement of the 2016 Medicare ACO participants confirms that providers are moving toward population health and value-based payment.

With 21 organizations joining the Next Generation ACO Model and 22 ACOs participating in either Track 2 or Track 3 of the Medicare Shared Savings Program, providers are advancing their models by transitioning to two-sided-risk contracts and increasing their potential risk and reward. This is a critical development in shifting these ACOs’ business models from fee-for-service to accountable care.

Further, the fact that 100 new ACOs joined the Medicare Shared Savings Program and more than two-thirds of the early ACOs renewed their contracts shows that interest in alternative payment models in the public sector continues to grow.

It's also important, of course, to watch the adoption of value-based models in the commercial sector, where the pace seems to be a bit slower for now.

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