The experimental Next Generation Accountable Care Organization model didn't save Medicare money during the first two performance years, according to an analysis released Friday from the agency.
Rather than reducing Medicare spending, the Next Generation ACO model, which is now in its fifth and final year, added $93.9 million to net Medicare spending during 2016 and 2017, the first two years of the program, the analysis found. The study, which was conducted by researchers at the University of Chicago and commissioned by the CMS, said the increase wasn't statistically significant although at first glance it appears to be a blow for supporters of the model who claimed its been saving Medicare money.
But the results from the study are more complicated, according to David Muhlestein, chief research officer at Leavitt Partners. Medicare can save at most about 1% on spending for beneficiaries in the program because that's how much they take from the ACOs at the beginning of performance years. The fact that the program was a wash for the agency in the first two years doesn't make a huge difference because the bar for saving is so low, he said.
"Is the program ever going to solve our cost issues in Medicare? No. It's all pretty minor," he said.
Another aspect of the study to consider is it's looking at how the Next Generation ACOs performed compared to other providers including Medicare Shared Savings Program participants, which is the permanent and large Medicare ACO program. The study method is an attempt to understand the difference Next Generation ACOs have made on costs but Next Generation ACOs are told the benchmark to reach targets before or at the beginning of performance years. This information acts as a guide for ACOs to know if they are on the right track. The study drastically changes the benchmark and how they are being evaluated, Muhlestein said.