Focus on Medicare providers/providers. “COA Participants” – individuals or groups of Medicare providers identified by a single Medicare Registered Tax Identification Number (“TIN”) – are the pillars of the MSSP model. According to the MSSP model, an ACO can only be formed by one or more “ACO participants”. Any individual provider or provider who bills for services that bill Medicare recipients under a Medicare invoice number associated with an ACO participant`s TIN (for example. B, all physicians in a group practice) must participate in an MSSP-ACO and be bound by the program registration requirements. While the rigidities of the MSSP engagement framework are valuable in establishing accountability and oversight, they do not necessarily take into account the contributions of certain suppliers involved in coordinating the procurement of COA recipients. Results-based procurement. As a condition of participation in the next-generation model, next-generation COAs must essentially enter into “outcome-oriented contracts” with other payers such as commercial health plans, government medicaid programs, and self-insured employers. More than 50% of the total patients in a next-generation ACO must be covered by a results-based contract before the end of the first year of performance. CMS defines “outcome-based contracts” as those that involve shared economies and/or financial risks, patient experience assessments, and significant incentives for service quality.

While COAs pioneering results-based contracting initiatives are already advocated by pioneering COAs, the inclusion of results-based contractual requirements in the next-generation ACO model appears to be part of a broader trend where Medicare is increasingly focusing on private payer agreements as a tool to accelerate the adoption of new utility and payment models. The new CMS model of cancer care, for example, also promotes multi-payer models. Second, CMS will expand the methodology for assigning beneficiaries to a next-generation ACO (the same methodology used under the Pioneer ACO model) by giving beneficiaries the opportunity to voluntarily choose to be “aligned” with a specific next-generation ACO. Voluntary targeting of a beneficiary to a next-generation COA replaces any claims-based mapping. In addition, next-generation COAs may communicate directly with recipients to discuss the voluntary targeting option and potential enhancements to the benefits associated with such alignment, provided that such notices are approved in advance by CMS or meet the requirements set out in the Next Generation COA Participation Agreement with CMS. There are two application cycles per consecutive year for the next-generation ACO model, with each application cycle having its own letter of intent and application submission processes. To be considered during the first cycle (which will have an initial contractual duration consisting of three 12-month performance periods with the possibility of two additional 12-month extensions), interested organisations must submit a non-binding letter of intent by 1 May 2015 and an application to CMS by 1 June 2015. To be considered in the second cycle (which will have an initial contractual duration consisting of two 12-month performance periods with the possibility of two additional 12-month extensions), interested organisations must submit a non-binding letter of intent to CMS no later than 1 May 2016 and a request no later than 1 June 2016 (applications will be available in March 2016).

In the absence of such waivers and regulatory guidance at present, organizations considering participating in the next-generation ACO model must plan for supplier engagement in a risky environment. Agreements that affect the federal Anti-Bribery Act, the Stark Act and the CMP Act must be reviewed and structured to comply with applicable shelters or exemptions. Issues related to market concentration, coordination of economic decisions, joint procurement, and exchange of sensitive information must all be reviewed to ensure they comply with state and federal antitrust laws. Finally, tax-exempt organizations will seek to ensure that their participation in or sponsorship of a next-generation COA does not generate independent business revenue (“UBI”), excessive utilities, private welfare expenses or expenses, or result in inappropriate private use of facilities funded by tax-exempt obligations, or trigger the application of Section 501(m) of the Internal Revenue Code. Commitment of beneficiaries. As with the MSSP and Pioneer ACO models, beneficiaries` freedom of choice is an important principle of the next-generation ACO model. However, the next-generation ACO model includes a number of features designed to promote care coordination and closer care relationships between a next-generation ACO and Medicare beneficiaries. Payment. Under the latter option, which will not be available to OCAs until the 2017 performance year, CMS estimates the total annual expenses of the next-generation ACO and pays the projected amount – less an amount withheld by CMS to cover the supply of suppliers other than next-generation suppliers/suppliers and capitation affiliates” (see below) – to the next-generation ACO as a PBPM payment.

The Next Generation ACO is responsible for paying claims to contracted next-generation suppliers/suppliers and capitation affiliates at mutually agreed rates, which may be less than 100% of Medicare`s fee rates. CMS retains responsibility for the payment of claims received from vendors and suppliers not contractually affiliated with the ACO Next Gen. According to CMS, as part of this benchmarking approach, next-generation COAs, like their MSSP counterparts, must demonstrate year-over-year improvements over historical expenditures to achieve savings. However, the extent to which a next-generation ACO is improved to achieve cost savings depends on the relative efficiency of the next-generation ACO. CMS will publish the final specifications in a future financial methodology document that will be made available to potential participants prior to the signing of a participation agreement. Normal service fees. Under this option, next-generation sellers/providers will continue to file claims with Medicare and receive a refund in accordance with the applicable Medicare fee schedule. Andrew G. Jack and Elizabeth Trende, staff members in the Columbus office, helped prepare this commentary. Prospective benchmarking.

Providers who were reluctant to exercise responsible diligence because they viewed it as an imperfect and temporary reward system (in which the motivators of saving decrease when benchmarks are met and savings are no longer shared) should take note of the benchmarking methodology of the next-generation ACO model. A forward-looking benchmark against which Medicare Part A and B expenditures of a next-generation ACO are measured to determine shared savings or losses is an essential component of the next-generation ACO model. The prospective benchmark distinguishes the Next Gen ACO model from the MSSP model and the Pioneer ACO model, both of which use a retrospective benchmark. Prior to the start of each performance year, CMS will establish a benchmark for each participating Next Gen ACO by: (i) determining the historical base expenses of the Next Gen COA based on a single base year in performance years 1 to 3 (or performance years 1-2 for COAs participating in the second cycle), (ii) applying regional and national trends in projected costs, (iii) adjustment of risks using the cmS hierarchical condition category model, and (iv) Application of a reduction. The discount is determined by a combination of the quality performance of the next-generation COA and its relative effectiveness, measured at regional and national levels. On March 10, 2015, the United States The Department of Health and Human Services (“HHS”) adopted the Next Gen ACO Model, a new initiative sponsored by the Centers for Medicare & Medicaid Services (“CMS”) Center for Innovation. According to HHS Secretary Sylvia Mathews Burwell, the next-generation ACO model is “part of [HHS`] broader efforts to set clear, measurable goals and a timeline for the Medicare program — and the health care system as a whole — to pay providers based on quality rather than the amount of care they provide to patients.” The Next Gen ACO model is a five-year model that is expected to begin in January 2016 and test whether strong financial incentives for participating COAs (“ACO Next Gen”) can improve health outcomes and reduce spending by Medicare recipients. For more information, please contact your principal representative or one of the lawyers listed below.

General emails can be sent via our “Contact Us” form, which can be found under www.jonesday.com. Gerald M. GriffithChicago+1.312.269.1507ggriffith@jonesday.com A highly desirable feature of the MSSP is the ability to use the final interim rule of waiver of the COA to create agreements and relationships that, while promoting the objectives of the COA, could still pose a significant legal risk under the Federal Anti-Bribery Act, the Physicians Self-Guidance Act (the “Stark Act”) and/or the Civil Monetary Penalties Act (“CMP”). »). Currently, there are no such waivers for the next-generation ACO model. .