- CMS has announced the creation of a new track for accountable care organizations (ACOs) that will require participating providers to shoulder more financial risk and potentially earn greater financial rewards. Based on the lessons learned from the successes and failures of previous accountable care initiatives including the Pioneer ACO program, the Next Generation ACO Model will foster increased innovation and help the healthcare industry meet its ambitious goals for transitioning to value-based care.
“The Next Generation ACO Model is one of many innovative payment and care delivery models developed by the CMS Innovation Center,” Patrick Conway, MD, Deputy Administrator for Innovation and Quality and Chief Medical Officer at CMS wrote in a blog post announcing the initiative. “These models are designed to set clear, measurable goals and a timeline to move the Medicare program — and the health care system at large — toward paying providers based on the quality, rather than the quantity of care they provide to patients.”
The Pioneer ACO program has been one of CMS’ most successful experiments with value-based reimbursements, saving more than $400 million for Medicare while raising patient safety levels and performance on quality metrics after just a few years in operation.
With a focus on leveraging EHRs and clinical analytics to improve care coordination, population health management, and patient-centered care, the ACO model has also spread rapidly throughout the private sector, with hundreds of new providers forming accountable care agreements every year.
The popularity and generally positive effect of accountable care organizations on healthcare spending and quality recently prompted HHS Secretary Sylvia Burwell to pledge to transform at least half of Medicare payments into value-based or bundled payment structures over the next three years. The Next Generation ACO Model will be a key piece of that transitional journey, Conway says.
“ACOs in the Next Generation ACO Model will take on greater financial risk than those in current Medicare ACO initiatives, while also potentially sharing in a greater portion of savings,” he said. “To support increased risk, ACOs will have a stable, predictable benchmark and flexible payment options that support ACO investments in care improvement infrastructure to provide high quality care to patients. These changes are responsive to feedback from external stakeholders.”
To support the higher level of performance expected of these new organization, Next Generation ACOs will increase their reliance on innovative care tools like telehealth, home monitoring, increased coverage of skilled nursing care, and financial incentives for patients.
Next Generation ACOs will also be eligible to participated in a capitated payment mechanism during the second year of their operations. In order to further CMS’ efforts to be more transparent with its operations, all quality metrics and patient experience ratings from the program will be publicly reported on a CMS website.
Initially, CMS expects to enroll around 20 accountable care organizations in the Next Generation program, which will require participation for three years with two optional one-year extensions. Organizations will be chosen through two rounds of applications, the first of which requires the delivery of a letter of intent by May 1, 2015.
“This ACO model provides for greater engagement of beneficiaries, a more predictable, prospective financial model, and more tools to coordinate care for beneficiaries,” Conway concludes. “ACOs are a critical part of achieving the Department’s goals of delivery system reform nationally – aimed at better care, smarter spending and healthier people.”
Interested parties may learn more about the Next Generation ACO program by visiting the initiative’s website here.