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The New Next Generation ACO Model: Cause for Optimism?

March 11, 2015
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Tuesday’s announcement of the new Next Generation ACO model being offered by CMS signals potentially more flexible thinking on the part of CMS officials

Tuesday, March 10, will inevitably looked back on as important day for CMS (the Centers for Medicare and Medicaid Services) and for the ACO (accountable care organization) concept, whether positively or (hopefully not) negatively so. That’s because now, in addition to the Medicare Shared Savings Program (MSSP) ACO model and the Pioneer ACO Program, CMS unveiled a third option, the Next Generation ACO.

As our news story on Tuesday afternoon reported, “The U.S. Department of Health and Human Services announced on March 10 that the Centers for Medicare & Medicaid Services (CMS) had launched a new accountable care organization (ACO) initiative, creating a new vehicle called the Next Generation ACO Model. The announcement came via The CMS Blog, and was authored by Patrick Conway, M.D., Deputy Administrator for Innovation and Quality and Chief Medical Officer for CMS.”

We reported the text of the announcement, in which Dr. Conway noted in The CMS Blog that “This model builds on the successes of earlier ACO models, such as the Pioneer ACO Model, and further enables innovation by providers to improve care for patients. Made possible by the Affordable Care Act,” Dr. Conway continued, ”ACOs encourage quality improvement and care coordination to help improve our health care system. 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.”

And on the Next Generation ACO web page, CMS explained that “The Next Generation ACO Model is an initiative for ACOs that are experienced in coordinating care for populations of patients. It will allow these provider groups to assume higher levels of financial risk and reward than are available under the current Pioneer Model and Shared Savings Program (MSSP). The goal of the Model,” according to its website, “is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries.”

The description from the website went on to say that “Included in the Next Generation ACO Model are strong patient protections to ensure that patients have access to and receive high-quality care. Like other Medicare ACO initiatives, this Model will be evaluated on its ability to deliver better care for individuals, better health for populations, and lower growth in expenditures. This is in accordance with the Department of Health and Human Services’ “Better, Smarter, Healthier” approach to improving our nation’s health care and setting 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. In addition, CMS will publicly report the performance of the Next Generation Pioneer ACOs on quality metrics, including patient experience ratings, on its website.”

We’re still just beginning to learn the first details about this model, but already, provider associations are applauding CMS’s move. Shortly after the announcement, the Charlotte-based Premier healthcare alliance released a statement, attributed to Blair Childs, senior vice president of public affairs at Premier, stating that “Members of the Premier healthcare alliance strongly support well-designed alternative payment models.  We are eager to begin working with our members to assess the Next Generation ACO Model. Today’s announcement,” the statement said, “gives healthcare providers another Medicare payment option with substantially greater flexibility to provide innovative, high quality care to a defined group of beneficiaries.”

Premier leaders particularly liked the fact that CMS seemed to signal a shift towards more flexibility in terms of delivery and payment models. “With this announcement, providers have even more choices, which will enable the market to both mature and evolve,” Premier’s statement said.

Only time—and the revelation of all the details of beneficiary attribution, risk adjustment, outcomes measures, and payment nuances—will tell how this all turns out. But I think it can be fairly said that senior officials at CMS are doing active thinking these days around how to keep the ACO concept alive, and hopefully, thriving—because their flexibility, their agility, and their collaborativeness with providers, will be essential to the nurturance of the ACO concept, in the public payment sphere, going forward.