Next Gen ACO: How CMS is Helping Health Systems Make the Shift to Population Health

January 11, 2016 Chris Dawe

The provision of health care is changing more quickly than any time in recent memory. While this is happening in both the public and the private sector, we’re thrilled about two recent efforts coming from the Center for Medicare and Medicaid Services (CMS) and the United States Senate Committee on Finance: the first cohort of Next Generation Accountable Care Organization (ACO) members were announced, and the Bipartisan Chronic Care Working Group released a policy options document and solicited comments on it.

The Next Generation ACO Model is the most progressive and expansive public ACO option; it outpaces the Medicare Shared Savings Program (MSSP) tracks by giving health systems the operational and financial flexibility to manage the care of their patients in a genuinely new way. The model is, simply put, a game-changer for health systems and for CMS—but it is currently just a pilot separate from the other MSSP tracks. In January 2016, CMS announced its first cohort of Next Generation ACOs. These ACOs will immediately take significant financial risk on their members.

(Full disclosure: Two of the 21 Next Generation ACOs beginning the program in 2016 are Evolent Health operational partners; a third operational partner has deferred its Next Generation start date to January 2017)

In 2015, the United States Senate Committee on Finance convened a Bipartisan Chronic Care Working Group, co-chaired by Senators Johnny Isakson and Mark Warner and tasked with “analyzing current law, discussing alternative policy options, and developing bipartisan legislative solutions that would be presented to the full Finance Committee for consideration.”

This past December, the committee released the Bipartisan Chronic Care Working Group Policy Options Document, the culmination of a months-long process in which the working group read through hundreds of recommendations and held 80 stakeholder meetings to better understand the policy interventions that could help support the coordination of care for the chronically ill.

At Evolent, our mission is to change the health of the nation by changing the way health care is delivered. We work with health systems across the country to help them more effectively and efficiently care for the chronically ill and the healthy alike, and we see first-hand every day the vital role that public policy plays in driving transformative change of the health system.

We’re thrilled that the Working Group is dedicated to finding policy solutions that will help providers care for the chronically ill, and that it is committed to developing a bipartisan legislative product to be introduced this year. In the spirit of openness and transparency, the Working Group solicited comments from engaged individuals and organizations on the proposals contained in the Policy Options Document.

You can find our full comment here, but for this post we want to focus on one of our recommendations to the committee: make the Next Generation ACO model a permanent option for MSSP participants, while allowing cost-sharing waivers for patients visiting in-ACO providers.

We believe the Next Generation ACO model is more attractive to health systems than Track 1, Track 2, or Track 3. It allows providers to fund, build and operate their ACOs with significantly more freedom than any of the previous tracks, and is a more financially-viable option than the other tracks. It has been met with interest from health systems across the country, as evidenced by the 21 chosen to participate in 2016, with a similarly large cohort expected to begin in 2017.

While the Next Generation ACO model is new, the general concept underpinning it is not, and ACOs are now recognized as one model that health systems can use to reduce the total cost of caring for a community while maintaining a high quality of care. There was, and will continue to be, interest from health systems across the country to join the Next Generation program, and we believe that CMS should make the model a standard component of the MSSP.

Additionally, Next Generation ACOs should have the freedom to use cost-sharing waivers and other benefit design methods to incent beneficiaries to see in-ACO providers. This is good for beneficiaries, as it will reduce financial barriers that can be a hindrance to seeking necessary care, and is good for the ACOs, as it will give them a tool to promote the coordinated care experience offered by the risk-bearing ACO while still promoting a patient’s freedom to choose her provider.

We’re convinced that the Next Generation ACO Model represents a significant opportunity for health systems across the country to make the shift to population health. Interested in learning more? Join us on February 17, 2016 at 2pm EST for a webinar that dives deeper into our experience as an operational partner to multiple Next Gen participants. Register here.

About the Author

Chris Dawe

Chris Dawe is Evolent's Senior Vice President, Medicare Partnerships. He works to align public policy initiatives with our efforts to differentiate provider-led health plan solutions and works with Evolent’s clients in a leadership and subject matter expert capacity. Chris has served as Policy Advisor for Health Care at the National Economic Council at the White House; the Director of Delivery System Reform at the Department of Health and Human Services; and as a Professional Staff Member for the Senate Finance Committee. Chris played a pivotal role in the design and implementation of health care reform including the development of multiple provisions of the ACA (the Medicare Shared Savings (ACO) Program and the CMS Innovation Center). Chris also developed the Meaningful Use provisions of the Health Information Technology for Economic and Clinical Health Act of 2009. Before coming to Washington, Chris worked in the business planning group at Partners Healthcare in Boston.

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