Last week CMS announced a new Next Generation ACO Model, which asks providers to agree to take on greater risks related to their performance in return for potentially sharing in a greater proportion of savings. In return for accepting more risk, CMS is providing a “predictable benchmark and flexible payment options that support ACO investments in care improvement infrastructure.”

A key aspect of the new model involves a greater level of care coordination between providers and beneficiaries. CMS is offering additional coverages for tele-health services as well as post-discharge home services, and beneficiaries will be financially rewarded for receiving their healthcare from the ACO’s staff; however, participating beneficiaries will retain the freedom to engage any Medicare provider.

The new model features two “risk tracks,” one of which is a 100% “Full Performance Risk” while the other involves more shared risks. The stated overarching goal of the ACO approach involves “paying providers based on the quality rather than the quantity of care they give patients;” and with increased financial incentives for providers, CMS believes the approach has the potential to simultaneously decrease costs while improving health outcomes.

Interested organizations will have two opportunities to apply, one this year and one next year, and participation in the new ACO model is expected to last up to five years. Providers are required to submit a Letter of Intent by May 1, followed up with a formal application by June 1, 2015. The second round of applications will be accepted next spring, 2016. For more information, see the links below.

HHS Press Release:

CMS Next Generation ACO Model:

Frequently Asked Questions:

Author: Jim Wiederhold

Jim believes his 39 years of experience--particularly his more than 26 years in healthcare--has prepared him well for what he does. His wealth of experience spans key areas, including finance, operations, management, leadership, sales and sales management, corporate, contingency, contractual and retained recruiting, outplacement and transition work and executive coaching.