No Extension for Next Generation ACO Model After This Year

May 24, 2021 - The Next Generation Accountable Care Organization (ACO) Model will come to an end at the end of this year as planned despite several calls for an extension, according to an email to model participants.

The email obtained by RevCycleIntelligence stated that CMS doesn’t expect to “extend or expand” the model since the model has “net-spending increase of $117.5 Million and no net savings for CMS.”

Although, the Next Generation ACO Model team did acknowledge in the email that participating ACOs have reduced gross beneficiary spending, maintained quality of care, and developed strategies for implementing benefit enhancements and engagement incentives all while paving the way for high-risk alternative payment models.

The news comes as a blow to Next Generation ACOs and other industry groups who have been calling on the Biden administration to extend the risk-heavy ACO model beyond 2021.

“Next Gen’s extension was a top advocacy priority for us,” Clif Gaus, ScD, president and CEO of the National Association of ACOs (NAACOS), said in a statement on Friday. “We understand the constraints and narrow timeframe the CMS Innovation Center had to work under to prolong the model and disagree with findings in formal evaluations, which we believe were flawed.”

READ MORE: Industry Groups Seek Next Gen Extension, Full-Risk ACO Options

Next Generation ACOs have saved Medicare over $1 billion compared to program benchmarks and netted $616 million to the Medicare Trust Fund after accounting for shared savings, shared losses, and discounts paid to CMS, Gaus reported.

However, several analyses commissioned by CMS have concluded that the Next Generation ACO Model has not yielded sufficient savings to justify making it permanent under CMMI’s authority.

Industry stakeholders have criticized how researchers compare ACO savings in the evaluation reports, contending that the methodology is flawed since it compares savings to those achieved by ACOs in the Medicare Shared Savings Program and other CMMI model.

According to criteria for expanding CMMI models though, the Next Generation ACO Model cannot continue or expand if it has not yielded net savings to CMS while also maintaining quality of care.

The Next Generation ACO Model team encouraged participating ACOs to join the new Global and Professional Direct Contracting (GPDC) Model after the ACO model ends at the end of this year.

READ MORE: How Top Accountable Care Organizations Save Year After Year

“Next Generation ACOs have already built the operational capacity and processes to do value-based health care transformation work, and we believe there would be significant value in leveraging their experience and operational capabilities by offering eligible Next Generation ACOs the opportunity to participate in the GPDC Model test,” the email stated. “Accordingly, we are providing the opportunity for current Next Generation ACOs to request to join the GPDC Model starting in PY 2022 as a Standard Direct Contracting Entity (DCE).”

The GPDC Model was built on the Next General ACO Model to offer the “next evolution of risk-sharing arrangements to produce value and high quality” care, CMMI states on its website.

The model contains ACO-like entities called DCEs that coordinate care for aligned beneficiaries with the goal of reducing costs and improving quality of care. Standards DCEs have experience with serving Medicare fee-for-service beneficiaries, including dual eligible, and are likely to have participated in a Medicare ACO program or other alternative payment model.

Current Next Generation ACOs will still need to meet GPDC Model requirements to participate as a Standard DCE next year as the process for joining the model will not be automatic, the Next Generation ACO Model team said in the email. To demonstrated eligibility, ACOs will need to submit materials to CMS by June 14, 2021.

The ACOs will also have the option to apply to the Medicare Shared Savings Program for the 2022 agreement period if they are not interested in the GPDC Model, the email stated.

READ MORE: Preparing Physician Practices for Direct Contracting, Risk Models

The direct contracting models have been considered the next step for Next Generation ACOs after the program’s end and the option to participate in the model’s second performance year has been welcomed by ACO advocates.

“This provides Next Generation ACOs broader options for continuing in risk-based arrangements when the model is set to conclude in 2021,” Blair Childs, senior vice president of public affairs at Premier, said in a statement. “Next Generation ACOs achieved superior quality improvement and generated significant savings to Medicare while incenting providers to innovate care delivery.”

Gaus also said the direct contracting opportunity “will be a viable path for some to continue participation in an innovative accountable care model like Direct Contracting.”

However, NAACOS continues to advocate for a “permanent, Next Gen-like ACO model that provides a better bridge between” high-risk tracks in the Medicare Shared Savings Program and the full capitation option under GPDC, Gaus added.

ACOs have expressed concerns about new direct contracting options, arguing that ACOs may be at a disadvantage under the models unless cost benchmarks and risk adjustment methodologies are changed.

“We also look forward to continuing to work with CMMI on improving the Direct Contracting model,” Childs stated.