The Obama administration is close to naming the first cohort of Medicare's Next Generation accountable care organizations, according to Dr. Patrick Conway, acting principal deputy administrator and chief medical officer at the CMS.
Conway spoke at an event held by American's Health Insurance Plans in Chicago. He did not provide any specific date or details but confirmed the first batch would be announced “soon.”
The CMS rolled out the Next Generation ACO program in March, and applications were due in June. It's designed as an alternative to Medicare's other ACO models, the Shared Savings and Pioneer programs, and it allows hospitals and doctors to take on more financial risk for their patient populations. It also created new devices to manage the ACO, which could appeal to providers who have been leery of taking on riskier payment models.
Two risk-arrangement options exist for Next Generation ACOs: one in which providers can share in 80% of the savings or losses based on their quality and cost-control efforts, or one that involves 100% risk. Savings are determined by a formula that doesn't solely rely on an ACO's past performance.
Participating ACOs could be paid via fee-for-service or some type of mixed value-based payment. Those who participate in the second year can try capitation, meaning the ACO would receive monthly lump-sum payments for each covered Medicare member as Medicare Advantage insurers do.
Next Generation ACOs can also offer financial incentives to keep beneficiaries in their network as well as other “enhanced benefits” such as telehealth and post-discharge home visits. Shared Savings and Pioneer ACOs don't have those options.
Some have viewed the Next Generation program as a way to entice large integrated delivery systems that have sat on the sidelines for the other ACO models, or to keep Shared Savings and Pioneers ACOs from leaving altogether. The goal of ACOs is to lower costs and improve clinical quality for defined populations, and ACOs are viewed as one of the primary ways the U.S. healthcare system will move away from the fee-for-service payment system.
Medicare's ACO quality results so far have been promising, but few groups have slowed health spending enough to share in the savings.
“Shared savings long-term gets tough because you're competing against yourself,” Conway said Wednesday.