Accountable Care Organization Initiatives Announced to Improve Health System Care Delivery

January 15, 2016
Policy Snapshot
Centers for Medicare and Medicaid (CMS), Medicare, Payment, Accountable Care Organization (ACO)

On January 11, the Centers for Medicare & Medicaid Services (CMS) announced 121 new participants in Medicare Accountable Care Organization (ACO) initiatives designed to improve the care patients receive in the health care system and lower costs. CMS also announced that providers and hospitals have signed up to join new types of ACOs, which in addition to being paid for positive patient outcomes will also receive penalties for negative ones. With new participants in the Medicare Shared Savings Program, the Next Generation ACO Model, Pioneer ACO Model, and the Comprehensive End-Stage Renal Disease (ESRD) Care Model, there will now be:

  • Nearly 8.9 million beneficiaries served
  • A total of 477 ACOs
  • 64 ACOs in a risk-bearing track

The Next Generation ACO Model is a new CMS Innovation Center initiative with 21 participating ACOs. Unlike other models, this model includes a prospectively (rather than retrospectively) set benchmark. The Next Generation Model participants will have the opportunity to take on higher levels of financial risk – up to 100 percent risk – than ACOs in current initiatives. While they are at greater financial risk they also have a greater opportunity to share in more of the Model’s savings through better care coordination and care management.

The Shared Savings Program welcomed 100 new ACOs and nearly 150 renewing ACOs on January 1, 2016. In 2016, approximately 15,000 more physicians will be participating in ACOs under the program. With the new group of ACOs, CMS will have 434 ACOs, serving more than 7.7 million beneficiaries. ACOs have demonstrated increased interest in performance-based risk arrangements, with 22 ACOs now opting for either Track 2 or Track 3 participation.

Thirty-nine Shared Savings Program ACOs will also participate in the ACO Investment Model (AIM). This model, which has a total of 41 participants, will provide pre-paid shared savings to encourage new ACOs to form in rural and underserved areas and to encourage current Shared Savings Program ACOs to transition to performance-based risk arrangement. The up-front payments distributed through the AIM support ACOs in improving infrastructure and redesigning care processes to provide beneficiaries with lower cost and higher quality health care.

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