Through the announcement of its new “Next Generation ACO Model” (Next Gen Model) program on March 10, 2015, the Centers for Medicare & Medicaid Services is making good on its recently proclaimed goal to tie half of its fee-for-service Medicare payments to value-based payment methodologies by the end of 2018. The program name aptly describes it as the next step up from the Medicare Shared Savings Program (MSSP) and the Pioneer ACO Model initiatives already underway for ACOs. As with other ACO-focused initiatives administered by the federal government, the Next Gen ACO seeks to test shared savings and shared risk health care payment models, but will incorporate some significantly different features, such as: (1) a full capitation payment option beginning in 2017; (2) the option for beneficiaries to “self-align” with an ACO; and (3) direct-to-beneficiary rewards for receiving care from the ACO.
ACOs will have two opportunities to apply for the Next Gen Model – this year and in 2016. An ACO’s participation in the program will span over a total of five years consisting of three initial performance years and two optional one-year extensions.
Generally, the Next Gen Model’s participation prerequisites mimic the basic requirements applicable to applicants in the MSSP, such as the legal entity, governance structure, and ACO leadership body requirements. Like the Pioneer ACO Model, however, the Next Gen Model targets coordinated groups of providers that have more experience in managing the health of defined populations.
Some key differences to note when comparing the Next Gen Model to the MSSP and Pioneer ACO Model include the following: