Next Generation ACOs: Most participants were previously in Pioneer and MSSP models

Fifteen of the 21 participants in Medicare's new Next Generation accountable care organization model--the most aggressive ACO option to date--are made up of previous participants of the Pioneer and Medicare Shared Savings Program.

[RELATED: CMS unveils first group of Next Generation ACOs]

Eight of the participants were formerly part of the Pioneer model, where organizations accepted two-sided risk for penalties and bonuses. Seven previously belonged to the shared savings program.

The breakdown of the newly announced participants shows that the model appeals to the most sophisticated and experienced of early population health managers, said Rob Lazerow, practice manager, research and insights, at The Advisory Board Company, which works with 230,000 leaders at 5,200 member organizations to improve performance, during an exclusive interview with FierceHealthcare.

"For the organizations and providers that have had success as a Pioneer ACO or in the Medicare Shared Savings Program, the Next Generation is an attractive evolution on the journey to population health," he said.

That was the reason the more advanced model made sense for Accountable Care Coalition of Southeast Texas, an ACO formed in partnership with Collaborative Health Services, a Universal American Corp. and primary care physicians, Richard Barasch, chairman and CEO of Universal American, told FierceHealthcare. The 118 providers in the ACO will serve more than 12,500 Medicare beneficiaries.

The physicians who are part of the ACO have had success coordinating care and lowering costs through value-based programs such as Medicare's shared savings program and Medicare Advantage plans, Barasch said. These same physicians work with TexanPlus, Universal American's four-star Medicare Advantage plan in Southeast Texas.

Barasch said that the model shows great potential for this particular group of primary care physicians, which has already had success with value-based care. Although many organizations have been hesitant to implement a value-based care model, Barasch said the success the group has had indicates it is possible, although he warned results won't show up immediately.

"It takes time and patience. There is no magic bullet," he said. "It's important for folks to understand this is change, and change not simple. Doctors and systems have to be prepared to work, And once you do the work, the rewards will be better care and lower costs."

Newer ACOs need to focus on one-sided risk

The two-sided risk options allow ACOs who perform well to share in greater savings with the federal government but they are also at higher risk to pay the government back if they fail to meet their financial or quality metrics. But few organizations are ready to take on such risk, said Clif Gaus, CEO of the National Associations of ACOs  (NAACOS) in a statement.

NAACOS stresses the importance of the Centers for Medicare & Medicaid Services (CMS) to maintain a Track 1 of ACOs, in which more than 95 percent of ACOs currently operate, he said. This option provides organizations with a smaller share of the savings but also no penalties if they fail to meet benchmarks.

Track 1 is still growing, although slowly, Gaus said. "But it's a long heavy lift for many ACOs to achieve success in Track 1 before they are ready to migrate into higher risk tracks," he said. " We need to ensure Track 1 becomes more appealing for organizations evaluating whether to join or remain the in the program."

Unfortunately, he said, almost 70 ACOs are leaving the two-sided risk programs at the end of this year, representing about a third dropout rate. Many of those dropouts have had difficulty achieving shared savings after committing significant resources and investments to start-up the ACO, he said.

To learn more:
- read the entire NAACOS statement (pdf)