On March 10, 2015, the U.S. Department of Health and Human
Services ("HHS") announced the Next Generation
Accountable Care Organization Model ("Next Gen ACO
Model"), a new initiative sponsored by the Centers for
Medicare & Medicaid Services' ("CMS") Innovation
Center. Scheduled to begin in January 2016, the five-year program
is designed for organizations that demonstrate significant
experience in coordinating care for patient populations. Although
there is no limit on the number of organizations that may
participate in the Next Gen ACO Model, CMS is anticipating that
only 15–20 will be selected for participation.
As described in more detail in the related
Commentary, the Next Gen ACO Model is distinguished
from its predecessors by the following:
Focus on Medicare Providers/Suppliers. The Next
Gen ACO model departs from the MSSP's focus on the
Medicare-enrolled TIN and instead looks to individual Medicare
providers or suppliers (identified by a National Provider
Identification ("NPI") or CMS Certification Number
("CCN")) as the building blocks of a Next Gen ACO. As a
consequence, the Next Gen ACO Model affords participants
significant flexibility to select specific providers who are best
able to contribute to the Next Gen ACO's success.
Choice of Two-Sided Risk Arrangements. The Next
Gen ACO Model requires participants to assume downside financial
risk. Those that do are provided opportunities for greater reward
than is currently available under either the MSSP or the Pioneer
ACO Model. Under the Next Gen ACO Model, participating ACOs may
choose one of two upside/downside risk arrangements: increased
shared risk (80–85 percent of Medicare Parts A and B
expenditures) and full performance risk (100 percent of Medicare
Parts A and B expenditures).
Prospective Benchmarking. A prospectively set
benchmark, against which a Next Gen ACO's Medicare Parts A and
B expenditures will be measured to determine shared savings or
losses, is a core component of the Next Gen ACO Model. Under the
methodology used to determine the benchmark, the magnitude by which
a Next Gen ACO must improve in order to achieve savings will vary
based on the Next Gen ACO's efficiency relative to other
organizations.
Provider Choice of Payment Mechanisms. The Next
Gen ACO Model is designed to offer Next Gen ACOs the opportunity
for stable and predictable cash flow while testing the
effectiveness of alternative payment mechanisms in facilitating
investments in infrastructure and care coordination. Next Gen ACOs
may choose from a menu of payment mechanisms, including: (i) normal
fee-for-service; (ii) normal fee-for-service plus monthly
infrastructure payments; (iii) "population-based
payments" (a combination of discounted fee-for-service and
monthly lump-sum payments); and (iv) full capitation (available
starting in 2017).
Beneficiary Engagement. The Next Gen ACO Model
includes a number of features that are intended to encourage care
coordination and closer care relationships between a Next Gen ACO
and Medicare beneficiaries. Next Gen ACOs may take advantage of
certain Medicare payment rule waivers that will allow them to offer
beneficiaries expanded telemedicine services, enhanced access to
post-discharge home health visits, and/or skilled nursing facility
services without the prerequisite three-day inpatient stay. In
addition, CMS will allow beneficiaries to voluntarily choose to be
"aligned" with a specific Next Gen ACO and will offer
cash rewards to beneficiaries who seek care through their aligned
Next Gen ACO.
Preferred Providers and Affiliates. The Next Gen
ACO Model affords Next Gen ACOs opportunities to collaborate with
health care providers who are not "full" participants in
the Next Gen ACO but who nonetheless may contribute to the goals of
a Next Gen ACO by serving as a provider of the enhanced benefits
described above or by agreeing to participate in the Next Gen
ACO's capitation arrangement with CMS.
Availability of Waivers and Other Regulatory
Guidance. At present, the Final Interim ACO Waivers Rule
and the antitrust and tax-exempt regulatory guidance specific to
the MSSP are not applicable to the Next Gen ACO Model. Pending the
availability of any waivers and regulatory guidance, Next Gen ACOs
must separately analyze all of the applicable fraud and abuse,
antitrust, and tax-exempt regulatory issues and plan for provider
engagement in a higher risk environment, with no guarantee of
higher levels of waiver protection.
There are two application cycles in consecutive years for the Next
Gen ACO Model, with each application cycle having its own letter of
intent and application submission processes. For consideration in
the first cycle (which will have an initial agreement term that
consists of three 12-month performance periods with the potential
of two additional 12-month extensions), interested organizations
must submit a nonbinding letter of intent to CMS no later than May
1, 2015 and an application no later than June 1, 2015.
For a more detailed discussion of the Next Gen ACO Model, please
read our related
Commentary
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
