CMS Extends Next Generation ACO Model, Offers APM Flexibilities

As healthcare providers continue to respond to the COVID-19 crisis, CMS is granting key flexibilities to participants in alternative payment models (APMs) managed by the agency’s Innovation Center.

CMS Administrator Seema Verma announced yesterday in a Health Affairs blog post that the agency is adjusting APM to address “the uniqueness of the situation.” Among the adjustments announced was the extension of the Next Generation ACO Model. The five-year accountable care organization (ACO) model is slated to sunset at the end of 2020.

In light of the operational challenges brought on by the COVID-19 pandemic, CMS has extended the model’s final performance period through the end of December 2021 much to the delight of ACOs and other provider groups.

“Next Gen ACOs are more advanced, bigger risk-taking ACOs and have successfully met the CMS Innovation Center’s goals of improving care quality while lowering Medicare spending,” the National Association of ACOs (NAACOS) said in a statement. “Today’s move offers Next Gen ACOs an Advanced Alternative Payment Model to participate in for 2021. NAACOS hopes the additional year will give CMS more data on which to make the Next Gen model permanent.”

NAACOS, alongside America’s Physician Group and Premier, urged CMS last year to make the Next Generation ACO Model permanent, citing the model’s $62 million in net savings to Medicare in its first year.

In addition to an extension, CMS also recently announced that it will reduce the downside risk for participating ACOs in 2020 by decreasing shared losses by the proportion of months during the public health emergency. The agency will also cap ACO gross savings upside potential at 5 percent, remove episodes of care for treatment of COVID-19, use retrospective regional trends, remove the 2020 financial guarantee requirement, and push out quality reporting deadlines.

CMS offered similar flexibilities to other APMs run by the Innovation Center, including the Direct Contracting initiative, which is a new value-based payment program built on the Next Generation ACO Model.

The announcement stated that the Direct Contracting Global and Professional pathways will be delayed until April 1, 2021. The pathways and quality benchmarks will also be altered to reflect the change in duration of the first cohort’s inaugural performance period.

CMS also stated that it will create an application cycle during 2021 for the second cohort, which is now slated to start the initiative on January 1, 2022.

The flexibilities granted to Next Generation ACOs and changes to the Direct Contracting initiative were welcomed by healthcare improvement company Premier, which stated that the modifications would give these providers an opportunity to enter Directing Contracting next April.

NAACOS also commended CMS for offering a second round of applications for the Direct Contracting initiative. Although the association stated that ACOs and other interested providers still need more detail on the initiative’s financial components, such as how CMS will set spending benchmarks and how it will adjust the risk of populations.

“Direct Contracting offers the next step in accountable care models, and NAACOS looks forward to continuing to work with CMS on its development and implementation,” NAACOS said.

Other key APMs that will see flexibilities and modifications during the public health emergency include:

• Bundled Payments for Care Improvement Advanced: Option for participants to eliminate upside and downside risk by excluding clinical episodes from reconciliation for Model Year 3, as well as an option to remain in two-sided risk, and exclude certain clinical episodes from reconciliation with a COVID-19 diagnosis during the episode
• Comprehensive ESRD Care Model (CEC): Extension until March 31, 2020; reduction of 2020 downside risk; cap on gross savings upside potential at 5 percent; removal of COVID-19 inpatient episodes; removal of 2020 financial guarantee requirement; extended quality reporting deadlines
• Comprehensive Care for Joint Replacement (CJR) Model: Extension of Performance Year 5 through March 2021; removal of downside risk through the capping of actual episode payments at the target price for episodes with a date of admission to the anchor hospitalization between January 31, 2020, through the termination of the emergency period; extension of the appeals timeline for Performance Year 3 and 4
• Medicare ACO Track 1+ Model: Removal of episodes of care for COVID-19 treatment; application of Medicare Shared Savings Program Extreme and Uncontrollable Circumstances policy to 2020 financial reconciliation; an option to extend agreement for one year through December 2021; extended quality reporting deadlines
• Oncology Care Model (OCM): Extension of the model through June 2022; option for practices to forgo upside and downside risk for performance periods affected by the crisis; option for practices that remain in one- or two-sided risk for the performance periods affected by the crisis to remove COVID-19 episodes from reconciliation for those performance periods; modified quality reporting requirements

For a complete list of flexibilities and modifications granted by CMS, please click here.