CMS Seeks Final Applications for Next Generation ACO Model
Final cycle of applications open up for providers wishing to join newest CMS accountable care organization model.
By - The Centers for Medicare and Medicaid Services Innovation Center announced the opening of its final round of applications for Next Generation Account Care Organization (ACO) Model, which will begin on January 1, 2017.
The final round of Next Generation ACOs have a two-year agreement with two optional extension years. To apply, an organization must submit a Letter of Intent in order to complete an application. The Letter of Intent can be found on the Next Generation webpage.
The CMS is hosting an informational Open Door Forum (ODF) for those interested in applying and receiving more information on the model. These ODFs are on March 8, 2016 and March 22, 2016. Information on how to attend can be found on the Next Generation webpage.
Medicare ACOs, such as Next Generation ACOs, are designed to encourage value-based and affordable patient care. It is a voluntary organization of healthcare providers, who coordinate patient care through a network of providers.
These ACO initiatives support patient-centered care and lower the cost of care by reducing redundancy and increasing interoperability.
Next Generation ACO Model is a stepping stone from the previous ACO programs, Pioneer ACO Model and Medicare Shared Savings Program.
“Building upon experience from the Pioneer ACO Model and the Medicare Shared Savings Program, 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 federal agency stated earlier this week.
Most notably, the Next Generation ACO Model’s financial structure presents a higher risk and savings program. Participants can choose a risk option of 80% savings/losses or 100% savings/losses.
Participants accept greater financial responsibility and greater potential of savings through better patient care in the ACO network.
The newest model is a response to claims that previous models did not set stable and suitable benchmarks, especially in terms of regional trends and quality reporting. Previous models finalized benchmarks at the end of performance years to account for evidence-based trends.
The benchmark for budget and expectation is presented at the start of the performance year using expenditures, quality reports, and risk assessment. Next Generation participants have the opportunity to manage patient care with the benchmark in mind.
The benchmark for the beginning of the performance year is calculated by defining a baseline expenditure, accounting for projected regional trends, assessing risk factors, and deriving quality and efficiency discounts.
The Next Generation ACO Model emphasizes regional trends rather than a focus on national trends in the Pioneer model.
This model also adds more options for flexible payments to providers. Participants can choose from normal fee-for-service, fee-for-service with ACO support payment, population based payments (like in the Pioneer model), or capitation.
The payment options provide the ACOs with more frequent financial support for maintaining the network.
Additionally, the model offers ACOs benefits to help improve coordinated care. This model enhances the program’s use of telehealth, home health visits, and financial incentives for patients to stay within the ACO network. The model is particularly geared toward experienced healthcare organizations and providers capable of managing greater financial risk and reward.
The Next Generation ACO model is a sign that ACOs are working (or at least attractive) for providers. Twenty-one providers signed up for Next Generation, exceeding CMS Innovation Center’s expectations for first round applicants. Most of the participants are switching from MSSP or Pioneer ACOs to Next Generation ACOs.
The progress with accountable care at the CMS Innovation Centers mirrors the federal agency's success in transitioning from fee-for-service to value-based reimbursement, which according to CMS officials in nearly one year ahead of schedule.
