The Centers for Medicare and Medicaid Services (CMS) recently announced a new Accountable Care Organization (ACO) model called the Next Generation ACO Model.  The Next Generation ACO Model differs from current Medicare ACO initiatives by offering financial arrangements with higher levels of risk and reward than are available under the current ACO programs.  In addition, the Model has alternative payment mechanisms to enable a transition from fee-for-service to capitation.  According to CMS, the goal of the Next Generation ACO Model is to test whether strong financial incentives for ACOs can improve outcomes and reduce the amount spent on health care for Medicare fee-for-service beneficiaries.

The Next Generation ACO Model has several unique tools to improve engagement with beneficiaries.  These tools include the following:

  1. Enhanced access to home visits, telehealth services, and skilled nursing facilities
  2. Ability to receive a reward payment for receiving care from the ACO
  3. A process allowing beneficiaries a decision in their alignment with ACOs and
  4. Collaboration between CMS and ACOs to inform beneficiaries about the characteristics and potential benefits of ACOs in relation to their care.

CMS expects that 15 to 20 ACOs will participate in the Next Generation ACO Model.  CMS has issued a request for applications outlining specific eligibility criteria.  There will be two rounds of applications in 2015 and 2016.  The deadline to submit a letter of intent in round one is May 1, 2015, with applications due on June 1, 2015.  The round two deadlines are one year later.