WayPoint Coordinates

10/22/2014

CMS ACO Investment Model

The ACO Investment Model is an initiative designed for organizations participating as accountable care organizations (ACOs) in the Medicare Shared Savings Program (Shared Savings Program). The ACO Investment Model is a model of pre-paid shared savings that builds on the 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..

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 ACO Investment Model was developed in response to stakeholder 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. CMS will provide financial support to these ACOs to make infrastructure investments and develop new ways to improve care for Medicare beneficiaries.

Initiative Details

Participation in the ACO Innovation Model will be limited to two distinct groups:

New Shared Savings Program ACOs 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.

ACOs that joined Shared Savings Program starting in 2012, 2013 and 2014 – 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.

  • Under the ACO Innovation Model, ACOs that will begin participating in the Medicare Shared Savings Program on 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 address both the fixed and variable costs associated with forming an ACO.

Under the ACO Innovation Model, ACOs that began participating in the Medicare Shared Savings program on April 1, 2012 or 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.

Eligibility and How to Apply

In order to be eligible for the ACO Investment Model, an ACO must meet the following criteria:

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 either 2012, 2013 or 2014 or will start in 2016.

The ACO has completely and accurately reported quality measures to the Medicare Shared Savings Program in the most recent performance year, if the ACO started in the Medicare Shared Savings Program in 2012, 2013 or 2014, excluding ACOs that will start in 2016.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.

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.

The ACO is not owned or operated in whole or in part by a health plan.

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 and 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, ACOs that achieved their financial benchmark, ACOs that demonstrate exceptional financial need, and those that submit compelling proposals for how they will invest both their own funds and CMS funds.

CMS will be accepting applications for the ACO Investment Model between October 15 and December 1 for ACOs that started in the Medicare Shared Savings Program in 2012, or 2013. The application period for ACOs that started in 2014 or will start in 2016 will open in the summer of 2015.