The Centers for Medicare and Medicaid Services on Monday announced the 21 health systems that are participating in the Next Generation Accountable Care Organization model, some having defected from the controversial Pioneer ACO program.
Next Generation builds upon experience from earlier ACO models, Pioneer and Shared Savings, CMS said.
Under all new models, hospitals are both paid for positive patient outcomes and receive penalties for negative ones. Next Generation participants have the opportunity to take on higher levels of financial risk, of up to 100 percent, than ACOs in current initiatives.
While they are at greater financial risk they also have a greater opportunity to share in more of the model's savings. CMS said.
Next Generation includes six hospitals that have moved up from the Pioneer program: Beacon Health in Maine; Bellin-ThedaCare Healthcare Partners in Wisconsin; OSF Healthcare in Illinois; Park Nicollet Health Services in Minnesota; Steward Healthcare Network in Massachusetts; and Trinity Health ACO in Iowa.
Last year, 19 hospitals were listed as participating in Pioneer. This year there are nine. They are Alina Health; Atrius Health, Banner Health Network; Beth Israel Deaconess Physician Organization; Fairview Health Systems; Michigan Pioneer ACO; Monarch Healthcare; Montefiore ACO; and Partners Healthcare.
All nine hospitals in Pioneer participated in the model the year before.
One that was in Pioneer last year, Heritage of California, is doing business as Regal Medical Group, which has joined Next Generation, according to spokesman Jonathan Glock.
This leaves three hospitals that have dropped out of both programs: Brown & Toland Medical Group in California; Dartmouth-Hitchcock in New Hampshire; and Mount Auburn Cambridge Independent Practice Association in Massachusetts.
Dartmouth-Hitchcock is has deferred its decision on Next Generation until 2017, according to a hospital spokesman.
Next Generation health systems include: Accountable Care Coalition of Southeast Texas Inc.; Baroma Accountable Care; Beacon Health; Bellin Health DBA Physician Partners; Cornerstone Health Enablement Strategic Solutions; Deaconess Care Integration; Henry Ford Physician Accountable Care Organization; Iowa Health Accountable Care; MemorialCare Regional ACO; Optum Accountable Care Organization; OSF Healthcare System; Park Nicollet Health Services; Pioneer Valley Accountable Care; Prospect ACO; Regal Medical Group; River Health ACO; Steward Integrated Care Network; ThedaCare ACO LLC; Triad HealthCare Network; Trinity Health ACO; and WakeMed Key Community Care.
Unlike earlier models, Next Generation includes a prospectively rather than retrospectively set benchmark, allows beneficiaries to choose to be aligned to the ACO, and tests beneficiary incentives such as increased availability of telehealth and care coordination services.
ACOs continue to show promising results on cost savings, CMS said. In 2014, they had a combined total net program savings of $411 million for 333 Medicare Shared Savings Program ACOs and 20 Pioneer ACOs.
In 2016, there are 121 new participants in Medicare ACOs designed to improve the care patients receive in the healthcare system and lower costs. There are now a total of 477 ACOs across Shared Savings, Pioneer, Next Generation and the Comprehensive End-Stage Renal Disease Care Model; 64 are in a risk-bearing track.
Thirty-nine Shared Savings Program ACOs will also participate in the ACO Investment Model. This model, which has a total of 41 participants, provides pre-paid shared savings to encourage new ACOs to form in rural and underserved areas and to encourage current Shared Savings ACOs to transition to performance-based risk arrangement.
ACOs now represent 49 states and the District of Columbia.
"Americans will get better care and we will spend our healthcare dollars more wisely because these hospitals and providers have made a commitment to change how they do business and work with patients," HHS Secretary Sylvia M. Burwell said. "We are moving Medicare and the entire healthcare system toward paying providers based on the quality, rather than the quantity of care they give patients. The three new ACO initiatives being launched today mark an important step forward in this effort."
Based on 2014 quality and financial performance results for Shared Savings Program ACOs who started the program in 2012, 2013, and 2014, those that reported in both 2013 and 2014 improved on 27 of the 33 quality measures, including patients' ratings of clinicians' communication, beneficiaries' rating of their doctors, screening for tobacco use and cessation, screening for high blood pressure, and Electronic Health Record use.
Shared Savings Program ACOs also outperformed group practices reporting quality on 18 out of 22 measures, CMS said.
ACOs were created to change the incentives for how medical care is paid for in the U.S., moving away from a system that rewards the quantity of services to one that rewards the quality of health outcomes, CMS said. CMS is tying 30 percent of traditional Medicare fee-for-service payments into alternative payment models by 2016, and 50 percent by 2018.