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January 23, 2018

17 new health systems join Next Gen ACO model

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    Read Advisory Board's take on this story.

    Seventeen new health systems signed up for CMS' Next Generation ACO model this year, according to CMS data.

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    With the addition of the 17 new systems and the loss of three prior participants, the Next Generation ACO model now has 58 participants. The model now covers about two million patients, according to CMS.

    About the Next Generation model

    The Next Generation ACO model is Medicare's highest-risk ACO program, according to Politico's "Pulse." The program, which launched in 2016, uses a combination of fee-for-service and capitated payments, including one risk track that passes along almost full risk.

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    In addition to placing more risk on the organizations, the model also allows providers more freedom to use telemedicine and home visits.

    Patients voluntarily sign up to participate in Next Generation ACOs. In exchange, the patients pay reduced or zero copayments for certain services, such as primary care visits.

    MSSP updates

    In related news, more than 120 new provider groups have signed up to participate in the Medicare Shared Savings Program (MSSP) for 2018, bringing the total number of program participants for this year to 561, according to CMS data released earlier this month.

    MSSP encourages ACOs to cut health care costs and improve care coordination by awarding bonus payments to ACOs that maintain high-quality care while decreasing Medicare spending compared with their individual benchmarks. CMS has said an estimated 134—or about 31%—of the 432 ACOs that participated in MSSP for the program's fifth performance year generated shared savings in 2016.

    According to the new CMS data, 124 new provider groups have joined MSSP for 2018, and 65 provider groups renewed existing MSSP agreements. The remaining 372 providers' MSSP agreements were not up for renewal this year and will continue to participate in the program. In total, 561 provider groups will participate in MSSP in 2018, up from 480 MSSP participants in 2017.

    The CMS data showed that in 2018:

    • 101 participants enrolled in MSSP's two-track option; and
    • 55 participants enrolled in CMS' Track 1+ Model—a new track for 2018 under which providers take on less financial risk, intended to encourage rural and smaller providers to engage in accountable care (Diamond, "Pulse," Politico, 1/19; Minemyer, FierceHealthcare, 1/8; Lagasse, Healthcare Finance News, 1/8; CMS data, 1/5; NAACOS release, 1/5).

    Advisory Board's take

    Hunter Sinclair

    Hunter Sinclair, Vice President

    While 17 new systems may sound like a low number, taken in aggregate with existing participants and the increase in MSSP ACOs with downside risk, over 25% of Medicare ACOs are now in a downside risk model.

    For organizations ready to take on significant downside risk, the Next Gen ACO program provides significant flexibility, so I wasn’t surprised to see this significant expansion. However, for organizations weighing a move to downside risk in 2019, they’ll be limited (among the current Medicare ACO programs) to the Medicare Shared Savings Program, as CMS has said it will not be accepting applications to Next Gen for the final two performance years of the program.

    Next, learn the 3 steps to establishing an intentional Medicare risk strategy

    To get best practices on how health systems should navigate the new rules of risk, download our research report to learn the three steps to establishing an intentional Medicare risk strategy.

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