Next Generation ACO, Medicare’s Largest Ever Advanced ACO Program, Releases Final Opportunity to Apply this Spring

January 19, 2017 Chris Dawe

Evolent Health partnering with six Next Gen ACOs as of January 1, improving care for seniors and managing well over $1 billion in Medicare costs

Hopefully you’ve seen CMS’s announcement that 28 additional organizations began participating in the Next Generation ACO (“Next Gen”) model on January 1 of this year and that CMS is seeking applicants for a third and final cohort of participants starting 1/1/18. With yesterday’s announcement there is even more evidence that the public-private commitment to health system transformation remains strong.

The 2017 cohort of ACOs join 17 organizations that began Next Gen operations at the beginning of 2016, bringing the total number of current Next Gen’s to 45 – and making Next Gen the largest advanced ACO program in Medicare’s history. With physicians and health systems across the country now participating in the more than 572 total ACOs that are working to improve health care for over 10.5 million seniors, this bipartisan Medicare innovation is clearly here to stay.

Evolent is honored that six of our existing partners have been selected as Next Gen ACOs. From AMCs to IPAs, in urban and rural areas alike, these organizations and Evolent are deploying physician-led, evidence-based patient programs and market-leading technology to improve the quality and care experience for Medicare beneficiaries. And with over a billion in Medicare spending being managed at full risk, the opportunity for cost savings – and the associated financial return for these ACOs – is immense. Evolent is also proud to work with Track 1, Track 2 and Track 3 ACOs.

Interest in Next Gen – for our partners, ACOs around the country, and us – should not surprise. The program is a unique strategic, financial and operational opportunity for ACOs, with deal terms that surpass nearly all of the commercial ACO partnerships that Evolent has helped negotiate over the past 5 years. In an era of health care “austerity” (likely fewer insured patients, more managed care, higher deductibles and bad debt exposure), value models that offer a viable and sustainable new source of revenue are in short-supply. Add-in MACRA-generated physician reshuffling – as docs seek safe harbor from punitive pay-for-performance programs (i.e. MIPS) and access to a guaranteed 5% bonus through alignment to an Advanced Alternative Payment model – and it’s no wonder that health systems are moving toward risk-based Medicare ACOs like Next Gen.

The good news is that CMS will now accept a third and final cohort of participants into the Next Gen program, starting 1/1/18. The challenge, as always, is that success in Next Gen is not guaranteed, and the financial consequences of poor performance are steep. To support migration to Next Gen, Evolent offers a unique combination of proven operational capabilities and the ability in certain circumstances to substantially de-risk the program for our partners.


The Risk-Mitigating Benefits of Evolent's Next Gen Solution


Interested health systems and physician groups are best served by acting now to further explore the program. The CMS timetable is tight, with non-binding Letters of Intent due May 4th and Applications due May 18th. But more importantly, with providers making their decisions now about which Alternative Payment Model they’ll participate in for 2018, the competition for locking down existing physician networks and driving expansion is already at full throttle. To learn more about Evolent’s approach to Next Gen and other advanced APM models please contact our partner development team.

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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