CMS Announces Next Generation ACO Program

CMSBuilding on the Pioneer and Shared Savings programs, on March 10, 2015, the Centers for Medicare & Medicaid Services (CMS) announced the launch of its new Next Generation ACO Model.  The ACOs who join this model will take on greater performance risk than the ACOs in the Pioneer and Shared-Saving programs, but have the opportunity to receive higher incentive payments.  Per CMS, “The Next Generation ACO model includes a prospective benchmark based on historic expenditures and regional spending trends, various levels of risk-sharing and savings payment caps, beneficiary engagement tools, and alternative payment mechanisms that incorporate fee-for-service with capitation.”

The new model will also allow beneficiaries to choose whether or not they want to be aligned with the new ACO while still having a free choice of providers, enable the ACOs to provide a higher level of care coordination, and could potentially lower copays, or have no copays, for high-value services.

Next Generation ACOs “will have a number of tools available to enhance the management of care for their beneficiaries,” the Department of Health and Human Services stated in a press release. “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 modifications to expand the coverage of telehealth and post-discharge home services to support coordinated care at home”

A provider organization must have a minimum of 10,000 beneficiaries and be willing to take on considerable financial risk in order to join the new program. CMS will be accepting two rounds of applications:

  • To participate as of January 1, 2016, organizations must submit their Letter of Intent to apply by May 1, 2015 and submit their application by June 1, 2015
  • To participate as of January 1, 2017, organizations must submit their Letter of Intent to apply by May 1, 2016 and submit their application by June 1, 2016.

CMS is expecting between 15 and 20 ACOs to participate in the Next Generation ACO program for up to five years.

For more information, see CMS’ Request for Applications.

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