The Centers for Medicare & Medicaid Services’ Innovation Center has announced its Next Generation Accountable Care Organization (ACO) Model, a program that will allow experienced ACOs to assume higher levels of financial risk and reward than are currently available under other opportunities (such as the Pioneer Model and Shared Savings Program). The goal of the Model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries.

Next Generation ACOs will not be allowed to simultaneously participate in other Medicare shared savings initiatives—such as the Medicare Shared Savings Program (MSSP), Pioneer ACO Model, Comprehensive ESRD Care (CEC) Initiative, or Comprehensive Primary Care (CPC) Initiative. However, participation in other demonstrations or models—such as Health Care Innovation Awards (HCIA) or Bundled Payments for Care Improvement (BPCI)—does not preclude participation.

In addition to normal FFS payments, the Next Generation Model will test the effectiveness of three alternative payment mechanisms: normal FFS payment + monthly infrastructure payment, population-based payments, and capitation. CMS anticipates selecting 15 to 20 ACOs from a variety of provider organization types and regions across the country. The project period is three years with the option for two one-year extensions. Round one letters of intent are required and due on May 1, 2015, with applications due on June 1, 2015. Round two will take place during approximately the same time frame in 2016.