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CMS Launches New ACO Model Targeting Underserved Areas

October 15, 2014
by Rajiv Leventhal
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The Centers for Medicare & Medicaid Services (CMS) has launched a new accountable care organization (ACO) initiative that is designed to encourage new ACOs to form in rural and underserved areas, and current Medicare Shared Savings Program ACOs to transition to arrangements with greater financial risk.

The new initiative—the ACO Investment Model—will build on the experience with the Advance Payment Model and will provide up to $114 million in upfront investments to up to 75 ACOs across the country. The model was developed in response to stakeholder concerns and available research suggesting that some providers lack adequate access to the capital needed to invest in infrastructure necessary to successfully implement population care management. CMS says it will provide financial support to these ACOs to make infrastructure investments and develop new ways to improve care for Medicare beneficiaries. The agency adds that it will recover these payments through an offset of an ACO’s earned shared savings.

Participation in the ACO Innovation Model will be limited to two distinct groups:

  • New Shared Savings Program ACOs joining in 2016—The ACO Investment Model seeks to encourage uptake of coordinated, accountable care in rural geographies and areas where there has been little ACO activity, by offering pre-payment of shared savings in both upfront and ongoing per beneficiary per month payments.
  • ACOs that joined Shared Savings Program starting in 2012, 2013 and 2014—The ACO Investment Model will help ACOs succeed in the shared savings program and encourage progression to higher levels of financial risk, ultimately improving care for beneficiaries and generating Medicare savings.

MSSP ACOs that will begin particpating in 2015 will not be eligible for the Investment Model as they will have not had a year of reconciled financial and quality performance until after the second application period. CMS says it may consider funding for 2015 starters at a later date.

The application deadline for organizations that started in the Shared Savings Program in 2012 or 2013 will be December 1, 2014. Applications will be available in the summer of 2015 for ACOs that started in the Shared Savings Program in 2014 or will start in 2016.

During the selection process, the ACO Investment Model will target new ACOs serving rural areas and areas of low ACO penetration and existing ACOs committed to moving to higher risk tracks. CMS will also give preference to ACOs that provide high quality of care, ACOs that achieved their financial benchmark, ACOs that demonstrate exceptional financial need, and those that submit compelling proposals for how they will invest both their own funds and CMS funds.

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