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Next Generation ACO launched by CMS, tightens financial benchmarks

More risk, more reward offered to organizations wanting to sign up.

The Department of Health and Human Services

The Centers for Medicare & Medicaid Services on Tuesday announced a new model of accountable care organization that asks participating healthcare providers to take on the highest level of risk with the possibility of higher returns than any other CMS program.

Dubbed The Next Generation ACO, the new program aims to build on the experience of the Pioneer ACO and the Medicare Shared Savings Program, which rewarded hospitals who hit benchmarks tied to quality of care and costs.

[Also: HHS wants bulk of care tied to value]

Participants would have much more predictable financial targets in the Next Generation program, though, CMS said in a blog post on Tuesday, as well as a deeper relationship with suppliers and beneficiaries. It also is expected to offer more flexible payment options to transition the organization from fee-for-service to value-based payments.

The new ACO program also will be linked to patient engagement. Participants will be asked to provide access to home visits and telehealth and enact reward payments to those who receive care from an ACO.

The news was initially heralded by Premier healthcare alliance, which partners with providers to help improve care and cost structures.

[Also: See where the Medicare Shared Savings Program ACOs are]

“Today’s announcement gives healthcare providers another Medicare payment option with substantially greater flexibility to provide innovative, high quality care to a defined group of beneficiaries,” said Blair Childs, Premier's senior VP of public affairs, in a statement.

CMS said 15 to 20 health systems will be accepted to the program, which will mandate three years of inclusion with the option to extend two additional years. CMS also said it would routinely publish performance outcomes for each participant, to be transparent with its success or failure.

CMS, which is aggressively trying to convert the industry to a value-based model, said it developed the new ACO level after listening to feedback from providers in other ACO programs, especially when it comes to predictability of financial benchmarks.

Twitter: @HenryPowderly