CMS Announces "Next Generation" ACO with Benefit Enhancements

The Centers for Medicare & Medicaid Services (CMS) Innovation Center announced the creation of a new accountable care organization (ACO) initiative, known as the "Next Generation ACO Model." This initiative builds on CMS's recent announcement of its intent to move the health system towards payment based on quality rather than quality. The Next Generation ACO will encourage providers to assume higher levels of financial risk and reward than are available under the current Pioneer Model ACO and the Medicare Shared Savings Program (MSSP) ACO. Its goal is to test whether strong financial incentives, together with new tools to support patient engagement and care management, can improve health outcomes and reduce expenditures for Medicare fee-for-service (FFS) beneficiaries.

The Next Generation Model will offer a menu of four available payment mechanisms to enable ACOs to transition from fee-for-service (FFS) reimbursements to capitation. It will also use refined benchmarking methods that reward both achievement of cost containment goals and improvement in pursuing those goals; ultimately these benchmarking methods would eliminate comparisons to the ACO’s historical expenditures.

Under the ACO model, beneficiaries retain full freedom of choice of providers, as well as all rights and beneficiary protections of Original Medicare. However, several "benefit enhancements" will help Next Generation ACOs to strengthen engagement with beneficiaries. These include: (1) greater access to home visits and telehealth services; (2) coverage of skilled nursing facility services without a prior hospitalization; (3) opportunities for beneficiaries to receive a reward payment for receiving care from the ACO; (4) a process that allows beneficiaries to confirm their care relationship with ACO providers; and (5) additional communication with beneficiaries about the characteristics and potential benefits of ACOs.

CMS expects approximately 15 to 20 ACOs to participate in the Next Generation ACO Model with representation from a variety of provider organization types and geographic regions. The Model will consist of three initial performance years and two optional one-year extensions. Specific eligibility criteria are outlined in the Request for Applications.

For Round 1 consideration, interested organizations must submit a Letter of Intent no later than 11:59 p.m., Fri., May 1, 2015. Round 1 applications must be submitted electronically no later than 11:59 p.m., Mon., June 1, 2015. Round 2 Letters of Intent and applications will be made available in March 2016. The Round 2 Letter of Intent must be submitted electronically no later than 11:59 p.m. on May 1, 2016, and the application no later than 11:59 p.m. on June 1, 2016.

To file an LOI and complete the online application, interested organizations may access the electronic submission portal.

Questions regarding the Next Generation ACO Model can be directed to NextGenerationACOModel@cms.hhs.gov.

Contact: Karen Lipson, kipson@leadingageny.org, 518-867-8383, ext. 124