Centers for Medicare & Medicaid Services Touts Next-generation ACO Model

WASHINGTON, D.C. — The Centers for Medicare & Medicaid Services’ (CMS) 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, the CMS said.

The agency recently announced the launch of the new model, which it 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, and 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 Dr. Mark McClellan, 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 with the 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.”