The Centers for Medicare & Medicaid Services' Next Generation accountable care organization (ACO)--a model that asks participants to take on more financial risk with the potential to obtain a greater reward--is a positive step that will propel the industry toward a value-based payment system, healthcare experts said Wednesday.
CMS this week announced the launch of the new model, which the agency said will offer more payment mechanisms to transition away from fee-for-service reimbursements to capitation.
"The Next Generation ACO deals with a lot of issues that we and others have raised, such as the challenges for ACOs, improving care, lowering costs. It's a real effort to move away from shared savings or limited risk models. On both counts it's an important step," said Mark McClellan, M.D., Ph.D., a former CMS administrator who now serves as a senior fellow and director of the Health Care Innovation and Value Initiative at the Brookings Institution, a nonprofit devoted to independent research and innovative policy solutions.
Larry Kocot, visiting fellow, economic studies program at Brookings, who is also an attorney with Epstein, Becker & Green LLC, agreed. "I do think CMS should be credited for thinking creatively to extend the model to meet the needs of providers no matter what stage they are at within the ACO program," he said in an exclusive interview.
Farzad Mostashari, M.D., former national coordinator for health information technology, told Clinical Psychiatry News Digital Network that the new model will likely reflect how CMS will structure other ACOs in the future. "It is a glimpse of what the whole program is going to look like in a few years' time," he said. "This is directionally, absolutely where the Medicare Shared Savings Program (MSSP) is headed."
McClellan told FierceHealthcare that it appears as if the initial rollout for the Next Generation ACOs will appeal to organizations that are fairly far along in the process and confident in their abilities to manage Medicare beneficiary populations and improve care while lowering costs.
CMS expects no more than 20 ACOs to participate in the Next Generation model, according to Patrick Conway, M.D., chief medical officer and deputy administrator for innovation and quality at CMS. These organizations, which will provide care to a minimum of 10,000 aligned Medicare beneficiaries, will represent various provider types and geographical regions.
But McClellan said he doesn't think the program is meant for a few advanced or Pioneer ACOs. "It's reasonable for CMS to assess the initial numbers as low because a lot hinges on future details of the program. There are other ACOs that are not in the Pioneer program and other providers in the Medicare Advantage program that will take a look at this, too," he said.
Late last year, CMS announced in a proposed rule that outlined changes to the MSSP program that it would give ACOs that participate in the program an extra three years before they could face penalties for poor performance, as well as a new risk model it referred to as "Track 3" to entice providers to form ACOs. Many experts said the proposed changes do not do enough to save the ACO program.
"We are hopeful the changes they proposed and the comments received that they will make the MSSP program more accessible and more friendly to a number of providers," said Kocot, who also served as a senior administrator of CMS.
Kocot said he would like to see CMS establish a fourth track that would lead to full capitation. He recommends tracks that reflect a continuum of ACOs that may begin with little risk and end with the full capitulation model. The Next Generation model, he said, "adds another dimension to those who are more sophisticated and have care coordination capabilities and data analytic capabilities that are beyond some ACOs."
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