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The Next Generation Accountable Care Organization (ACO) Model has saved Medicare millions of dollars over the past four performance years. But with one more year to go due to the COVID-19 pandemic, the Model is actually operating at a loss.
Next Generation ACOs have saved Medicare nearly $667 million thanks to reductions in Parts A and B spending since 2016, according to an independent evaluation of the model commissioned by CMS. Risk-based ACOs in the program were able to decrease gross spending by 1.2 percent across four performance years, with the largest reductions taking place with skilled nursing facility and post-acute care.
Notably, in the fourth performance year (2019), Next Generation ACOs reduced acute care spending—the largest category of Medicare spending. This was the first year ACOs in the Model were able to impact acute care spending.