The goal of the value movement is to incentivize providers to move away from the traditional fee-for-service model and provide coordinated care for patients with an eye toward improving quality and reducing cost. One key mechanism to achieve this goal is accountable care organization (ACO) models that—because they are offered along a continuum of varying levels of financial risk and reward—allow participants to progressively assume more risk while successfully managing the quality of care for patients.
Medicare is leading the advancement of accountable care, currently operating several different ACO models including various Medicare Shared Saving Program (MSSP) tracks, the Next Generation (“Next Gen”) ACO model, and the Direct Contracting models. Now in its sixth year, the Next Gen ACO model provides an opportunity for providers to operate in full risk arrangements and offers operational and financial flexibility that helps ACOs advance along the risk continuum.
ACOs under these models have achieved gross savings for the Medicare Trust Fund, organized care in their local communities, and improved quality. Many of the model participants have invested resources over many years to be at the tip of the spear in Medicare risk models. We believe that to sustain the value movement and reward the achievements of early adopters, this administration should make the Next Generation ACO model a permanent option for providers. This Center for Medicare and Medicaid Innovation (Innovation Center) payment model began in 2016 and is now scheduled to end on December 31, 2021, after receiving a one-year extension due to COVID-19.
While the prior administration had announced its intention to allow the model to expire in favor of promoting new model opportunities (for example, Direct Contracting), the new administration should revisit this decision and closely consider the model’s merits and worthiness as a permanent program option.