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Next Generation ACO Model Will Not Be Extended

CMS will not extend the Next Generation ACO Model after the calendar year 2021

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May 24, 2021 – The Next Generation Accountable Care Organization (ACO) Model will not be extended after it is set to end on December 31, 2021. This is despite calls to extend the Next Generation ACO Model by participants in the model.

 According to an email sent to model participants, CMS does not expect to “extend or expand” the model. This is due to the fact that the model has a net-spending increase of $117.5 Million and no net savings for CMS.”

Next Generation ACO Model Participants Disappointed

Despite this, the Next Generation ACO Model team acknowledged that participants reduced gross spending, maintained their quality of care, and developed strategies that paved the way for high-risk alternative payment models.

That is why the news from the CMS comes as a blow to ACOs participating in the model.

Clif Gaus, ScD, president and CEO of the National Association of ACOs (NAACOS), said in a statement, “Next Gen’s extension was a top advocacy priority for us. We understand the constraints and narrow timeframe the CMS Innovation Center had to work under to prolong the model and disagree with findings informal evaluations, which we believe were flawed.”

The Next Generation ACOs saved Medicare $1 billion. They also netted the Medicare Trust Fund $616 million when accounting for shared savings, losses, and discounts to CMS.

Despite this, CMS commissioned analysis that concluded the Next Generation ACO Model has not created enough savings to justify making it permanent.

Industry stakeholders disagree with how researchers conducted their analysis and derived conclusions. They believe the way researchers compared ACO savings is flawed because it compares savings to what has been achieved by other ACOs in the Medicare Shared Savings Program and other various CMMI models.

However, according to the criteria for expanding CMMI models, a model cannot continue or expand if it has not yielded net savings to CMS while also keeping quality of care steady.

Next Steps for Next Generation ACO Model Participants

In response to CMS’s failure to extend the model, the Next Generation ACO Model team is encouraging model participants to join the Global and Professional Direct Contracting (GPDC) Model in 2022.

he email states, “Next Generation ACOs have already built the operational capacity and processes to do value-based health care transformation work, and we believe there would be significant value in leveraging their experience and operational capabilities by offering eligible Next Generation ACOs the opportunity to participate in the GPDC Model test. Accordingly, we are providing the opportunity for current Next Generation ACOs to request to join the GPDC Model starting in PY 2022 as a Standard Direct Contracting Entity (DCE).”

While well-suited for the switch, current Next Generation ACO Model participants will need to meet the GPDC Model requirements to participate. The transfer will not be automatic. Those interested in joining the GPDC Model will need to submit materials to CMS by June 14, 2021.

In lieu of this, ACOs will also have the option to apply for the Medicare Shared Savings Program for 2022.

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The VBP Blog is a comprehensive resource for all things related to value-based payments. Up-to-date news, informative webinars, and relevant blogs in the VBP sphere to help your organization find success.