NAACOS: Next Gen ACOs saved Medicare $559M in 2019 as future remains in doubt

The Next Generation Accountable Care Organization program saved Medicare $559 million in 2019 as the program’s future remains in doubt.

The National Association of ACOs released an analysis on the model’s savings Wednesday. The group has been pressing the Centers for Medicare & Medicaid Services (CMS) to make permanent the program that calls on ACOs to take on more financial risk.

“These figures are impressive especially considering this data accounts for only 37 of the 41 Next Gen ACOs participating in 2019,” NAACOS said in a release Wednesday.

The figures were based on partial 2019 performance data released by CMS on Wednesday.

Next Gen ACOs also had an average quality score of 93.7 out of 100. After taking into account shared savings, the program produced a net $204 million in savings for Medicare in 2019.

“By comparison, Next Gen ACOs saved Medicare $406 million in 2018 and netted $185 million after shared savings and losses,” NAACOS said.

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Next Gen ACOs take on a larger degree of financial risk than ACOs in the Pathways to Success Program. The ACOs get a greater share of any savings than regular ACOs if they meet cost savings targets, but also may have to repay Medicare for not meeting those thresholds.

The Pathways to Success program, which has 541 participating ACOs, generated $1.2 billion in net savings for Medicare in 2019.

CMS had planned to sunset the Next Gen program at the end of last year as it sought to promote the Direct Contracting model that calls for providers to take on more capitated payments.

However, the agency decided to pause the expiration due to the COVID-19 pandemic, and now the program will run through the rest of 2021.

NAACOS has been pressing CMS to make the program permanent, arguing it has saved Medicare money and led to quality improvements.

“For every year of the program, Next Gen ACOs yielded savings for Medicare money while also showing an improvement in quality,” said NAACOS President and CEO Clif Gaus in a statement. “Very few programs CMS has developed over the years can say that.”