Advanced Alternative Payment Models Part II: Understanding the Next Generation Accountable Care Organization Model

With CMS establishing preliminary definitions for fully qualifying Advanced Alternative Payment Models (APMs) in May of 2016, it has become crucial to many care providers accepting Medicare and Medicaid payments to understand the nature of these entities if they wish to eventually participate in one of the current or future payment models. Changes under the Medicare Access and CHIP Reauthorization Act of 2015 specifically identify subsets of APMs that allow providers to avoid possible negative adjustments for poor relative performance compared with their respective peer groups through the Merit-Based Incentive Payment System beginning in 2017. This article reviews the nature of one of the fully qualifying Advanced APMs, the Next Generation Accountable Care Organization (ACO) Model, and its risk-benefit sharing principles based on prior experience with the Medicare Shared Savings Program and other previous ACO models. This model represents a more sophisticated option for organizations with significant ACO experience seeking an Advanced APM for the 2018 reporting reriod and beyond.