FACT SHEET
FOR
IMMEDIATE RELEASE
June 25,
2015
Contact:
CMS Media Relations
Accountable Care Organization (ACO) Investment Model
Overview
Accountable
Care Organizations (ACOs) are groups of doctors, hospitals, and other health
care providers, who come together voluntarily to provide coordinated,
high-quality care to their Medicare patients to help them deliver better care
at lower cost.
The goal of
coordinated care is to ensure that patients, especially people with chronic
conditions, get the right care at the right time, while avoiding unnecessary
duplication of services and preventing medical errors.
ACOs
represent one part of a comprehensive series of initiatives in the Affordable
Care Act that are designed to lower costs and improve care. When an ACO
succeeds in both delivering high-quality care and spending health care dollars
more wisely, it will share in the savings it achieves for the Medicare program.
Medicare
currently offers or is planning to offer several ACO initiatives:
- Medicare
Shared Savings Program
- Pioneer
ACO Model
- Next
Generation ACO Model
- Advance
Payment ACO Model
- Comprehensive
End Stage Renal Disease (ESRD) Care Initiative
This fact
sheet provides a general description of the ACO Investment Model, a new ACO
model being offered to support the Medicare Shared Savings Program ACOs.
Summary of
the ACO Investment Model
The ACO
Investment Model is an initiative developed by the Center for Medicare &
Medicaid Innovation (Innovation Center) for organizations participating as ACOs
in the Medicare Shared Savings Program (Shared Savings Program). The ACO
Investment Model is a new model of pre-paid shared savings that builds on experience
with the Advance Payment Model to encourage new ACOs to form in rural and
underserved areas and current Medicare Shared Savings Program ACOs to
transition to arrangements with greater financial risk.
The ACO
Investment Model will be available to:
1)
New Shared Savings Program ACOs that joined in 2015 or are joining in 2016. The
ACO Investment Model seeks to encourage uptake of coordinated, accountable care
in rural geographies and areas where there has been little ACO activity, by
offering pre-payment of shared savings in both upfront and ongoing per
beneficiary per month payments. CMS believes that encouraging participation in
areas of low ACO penetration may spur new markets to focus on improving care
outcomes for Medicare beneficiaries.
2)
ACOs that joined the Shared Savings Program starting in 2012, 2013 or 2014.
Here, the ACO Investment Model will help ACOs succeed in the Shared Savings
Program and encourage progression to higher levels of financial risk,
ultimately improving care for beneficiaries and generating Medicare savings.
Background
CMS is
encouraging providers to participate in ACOs through the Medicare Shared
Savings Program, which creates financial incentives for ACOs that lower growth
in health care costs while meeting performance standards on quality of care and
putting Medicare beneficiaries first.
The
Innovation Center
The
Innovation Center was created by the Affordable Care Act to test innovative
payment and service delivery models to reduce program expenditures while
preserving or enhancing the quality of care. It is committed to transforming
the Medicare, Medicaid and Children’s Health Insurance Programs and is expected
to help deliver better care for individuals, better health for populations, and
lower growth in expenditures for Medicare, Medicaid and CHIP beneficiaries.
Working in
concert with the Shared Savings Program, the Innovation Center is testing the
ACO Investment Model and the Pioneer ACO Model, and has sponsored learning
activities that help providers form ACOs and improve their results. More
information on all of these initiatives is available on the Innovation Center
website athttp://innovation.cms.gov.
The ACO
Investment Model was developed in response to concerns and available research
suggesting that some providers lack adequate access to the capital needed to
invest in infrastructure necessary to successfully implement population care
management.
Structure
of Payments
New ACOs
Under the
ACO Investment Model, ACOs that will begin participating in the Medicare Shared
Savings Program on January 1, 2015 or January 1, 2016 will receive three types
of payments:
- An upfront, fixed payment: Each ACO receives a fixed payment.
- An upfront, variable payment: Each ACO receives a payment based on the number
of its preliminarily prospectively-assigned beneficiaries.
- A monthly payment of varying amount depending on the
size of the ACO: Each ACO receives a
monthly payment based on the number of its preliminarily
prospectively-assigned beneficiaries.
The
structure of these payments addresses both the fixed and variable costs
associated with forming an ACO.
Existing
ACOs
Under the
ACO Investment Model, ACOs that began participating in the Medicare Shared
Savings Program on April 1, 2012, July 1, 2012, January 1, 2013, or January 1,
2014 will receive two types of payments:
- An upfront, variable payment: Each ACO receives a payment based on the number
of its preliminarily prospectively-assigned beneficiaries.
- A monthly payment of varying amount depending on the
size of the ACO: Each ACO receives a
monthly payment based on the number of its preliminarily prospectively-assigned
beneficiaries.
The
structure of these payments addresses both the fixed and variable costs
associated with making ongoing investments to improve care coordination for
existing ACOs.
Recovery of
ACO Investment Model Payments
For ACOs already
participating in the Shared Savings Program, CMS will recover the ACO
Investment Model payments through an offset of an ACO’s earned shared savings.
ACOs selected to receive ACO Investment Model payments will enter into an
agreement with CMS that details the obligation to repay ACO Investment Model
payments.
If the ACO
does not generate sufficient savings to repay the ACO Investment Model payments
as of the first settlement for the Shared Savings Program, CMS will continue to
offset shared savings in subsequent performance years and any future agreement
periods, or pursue recovery where appropriate.
For ACOs
new to the Shared Savings Program in 2015 and 2016, CMS will recover payments
from earned shared savings for as long as the participant remains in the Shared
Savings Program ACO. CMS will pursue full recovery of pre-paid shared savings
from any ACO that does not complete its initial Shared Savings Program
agreement period or the full term of the ACO Investment Model agreement.
Eligibility/Selection
The ACO
Investment Model is expected to help provide support to organizations whose
ability to invest in infrastructure and redesigned care processes would be
improved with additional access to capital.
In order to
be eligible for the ACO Investment Model, an ACO already participating in the
Shared Savings Program must meet the following criteria:
1)
The ACO must be accepted into and participate in the Shared Savings Program.
The ACO’s first performance period in the Medicare Shared Savings Program must have
started in 2012, 2013, 2014, or 2015 or will start in 2016.
2)
If the ACO started in the Medicare Shared Savings Program in 2012, 2013 or
2014, it has completely and accurately reported quality measures to the
Medicare Shared Savings Program in the most recent performance year, excluding
ACOs that started in 2015 or that will start in 2016.
3)
The ACO has a preliminary prospective beneficiary assignment of 10,000 or fewer
beneficiaries for the most recent quarter, as determined in accordance with the
Shared Savings Program regulations. However, ACOs that started the
Medicare Shared Savings Program in 2015 or will start in 2016, and are
determined to be from a rural area using the application selection criteria,
are permitted to exceed the 10,000 beneficiary assignment limit.
4)
The ACO does not include a hospital as an ACO participant or an ACO
provider/supplier (as defined by the Shared Savings Program regulations),
unless the hospital is a critical access hospital (CAH) or inpatient
prospective payment system (IPPS) hospital with 100 or fewer beds.
5)
The ACO is not owned or operated in whole or in part by a health plan.
6)
The ACO did not participate in the Advance Payment Model.
During the
selection process, the ACO Investment Model will target new ACOs serving rural
areas, areas of low ACO penetration, and existing ACOs committed to moving to
higher risk tracks. CMS will also give preference to ACOs that provide high
quality of care, achieved their financial benchmark, and demonstrate
exceptional financial need.
Application
Process
The
application period for ACOs that started in 2014 and 2015 -- or will start in
2016 -- will open July 1st, 2015 and close July 31, 2015.
CMS staff
will review applications for the applicant organization’s ability to meet
criteria identified in the solicitation. All applicants are also required to be
accepted into the Shared Savings Program, in accordance with program
rules.
Participants
In the
first round of applications for ACOs that started in the Medicare Shared Savings
Program in 2012 and 2013, the ACO Investment Model has accepted six ACOs into
the model.
Additional
Resources
