Outcomes-Based Contracting. As a precondition for participation in the Next Gen model, next Gen ACOS is required to essentially perform “results-based contracts” with other payers such as commercial health plans, government Medicaid programs and self-insured employers. More than 50% of the total patients of a Next Gen ACO must be covered by a contract based on results before the end of the first year of performance. The CMS defines “results-based contracts” as such, including common financial savings and/or risks, patient experience assessments and meaningful quality incentives. Although pioneer ACOS already needs results-based contractual initiatives, the integration of results-based contractual requirements into the next Gen ACO model appears to be part of a broader trend, where Medicare is increasingly focusing on private payment agreements as an instrument to accelerate the introduction of new models of care and payment delivery. For example, the new CMS Oncology Care model also promotes models that engage multiple payers. Second, the CMS will expand the methodology used to involve beneficiaries of a next-generation ACO (the same method used using Pioneer`s ACO model) by giving recipients the option to voluntarily choose to be “aligned” with a specific next-generation ACO. The voluntary referral of a recipient to a Next Gen ACO replaces any requirement-based assignment. In addition, Next Gen ACOS is authorized to communicate directly with recipients to discuss the voluntary referral option and potential improvements in the benefits associated with such harmonization, provided that these communications are approved in advance per cmS or meet the requirements set out in the ACO next Gen participation agreement with CMS. There are two application cycles in consecutive years for the Next Gen ACO model, with each application cycle having its own statement of intent and application transmission processes.
For the purposes of the undergraduate review (which will have an initial contract term consisting of three 12-month periods with the potential for two additional 12-month renewals), interested organizations must submit a non-binding letter of intent by May 1, 2015 and an application to CMS by June 1, 2015. For the second cycle review (which has an initial contract term consisting of two 12-month periods with two additional 12-month extensions), interested organizations must submit a non-binding Memorandum of Understanding by May 1, 2016 and an application by June 1, 2016 (applications will be submitted in March 2016). The goal of the Next Gen ACO model is to test whether strong financial incentives for ACOs, combined with support tools to improve patient engagement and better care management, can improve health outcomes and reduce spending by Medicare beneficiaries (Fee-for-Service, FFS). Verma concluded that the next-generation ACO results had been beneficial for spending reductions in 2016 and 2017. However, shared savings payments (incentives for members of the ACO Next Generation Participation Agreement) significantly offset medicare cost savings. For this reason, in the future, CMS will focus on “strong and targeted incentives to reduce spending in value-based models: savings tend to increase as health care providers take more risks, but even a high risk does not guarantee that a model will generate overall savings.” Focus on Medicare Provider/Suppliers. “ACO participants” – individuals or groups of Medicare providers/providers identified by a single Medicare-registered tax identification number are the linchpins and strengths of the MSSP model.