A recent report on the (CMS) Next Generation Accountable Care Organization (ACO) model program showed that the model "was not associated with reduced net Medicare spending in its first two years." Moreover, the models did not show "notable changes" in quality of care.

During the evaluation period, 46 ACOs participated in the program with 1,200 beneficiaries. Overall, the first two years of the Next Generation ACO program resulted in a $123 million reduction in Medicare Parts A and B spending.

However, after accounting for CMS' shared savings payouts, "the estimated net impact on Medicare spending was a nonsignificant spending increase of $93 million in aggregate (+0.4 percent)."

The Next Generation ACO Model was initially implemented in 2016 to test whether strong financial incentives for Medicare ACOs in combination with flexible payment options and tools supporting care management can improve health outcomes, and in turn, lower expenditures for Medicare fee-for-service beneficiaries.

ACOs that have participated in this model assume 80 to 100 percent upside and downside risk, which is higher than in the Medicare Shared Savings Program. ACOs that participate in this model can also select from one of four payment mechanisms that are designed to facilitate cash flow and can select from various enhancements that provide flexibility in care delivery.

According to the report, "Performance Years 4 and 5 (2019 and 2020) are expected to alter shared savings payments in those years and affect estimates of net impact." Read the full report.

Clinical Topics: Cardiovascular Care Team

Keywords: ACC Advocacy, Accountable Care Organizations, Medicare, Health Expenditures, Centers for Medicare and Medicaid Services, U.S., Motivation, Medicaid

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