From the CMS blog, Dr. Patrick Conway discusses The Next Generation ACO Model:

Building on the Success of the ACO Model

By Patrick Conway, M.D., deputy administrator for innovation and quality and chief medical officer, Centers for Medicare & Medicaid Services

On March 10, the U.S. Department of Health and Human Services launched a new Accountable Care Organization (ACO) initiative from the Centers for Medicare & Medicaid Services (CMS) Innovation Center known as the Next Generation ACO Model. This model builds on the successes of earlier ACO models, such as the Pioneer ACO Model, and further enables innovation by providers to improve care for patients. Made possible by the Affordable Care Act, ACOs encourage quality improvement and care coordination to help improve our health care system. ACOs are a critical part of achieving the department’s goals of delivery system reform nationally, aimed at better care, smarter spending and healthier people.

The Next Generation ACO Model is one of many innovative payment and care delivery models developed by the CMS Innovation Center. These models are designed to set clear, measurable goals and a timeline to move the Medicare program—and the health care system at large—toward paying providers based on the quality, rather than the quantity of care they provide to patients.

Building upon experiences from the Pioneer ACO Model and the Medicare Shared Savings Program, the Next Generation ACO Model offers a new opportunity in accountable care — one that sets more predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality of care.

ACOs in the Next Generation ACO Model will take on greater financial risk than those in current Medicare ACO initiatives, while also potentially sharing in a greater portion of savings. To support increased risk, ACOs will have a stable, predictable benchmark and flexible payment options that support ACO investments in care improvement infrastructure to provide high quality care to patients.

These changes are responsive to feedback from external stakeholders. The Next Generation ACO Model encourages greater coordination and closer care relationships between ACO providers/suppliers and beneficiaries by enhancing services that beneficiaries can receive from participating ACOs. ACOs will have a number of tools available to enhance the management of care for their beneficiaries. These include additional coverage of telehealth and post-discharge home services, coverage of skilled nursing care without prior hospitalization, and reward payments to beneficiaries for receiving care from ACOs.

This ACO model provides for greater engagement of beneficiaries, a more predictable, prospective financial model, and more tools to coordinate care for beneficiaries.