CMS to Discontinue Next Generation ACO Model as Expected but Allows Program Participants to Apply For Direct Contracting

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Many of us have been waiting to hear the final word about what’s next from CMS for the Next Generation ACO Model. On May 21, 2021, CMS’s Innovation Center (“CMMI”) confirmed that the Next Generation ACO Model would not be extended and will conclude at the end of this year as planned. The Next Generation ACO Model has been the most advanced value-based contracting model offered by CMS with participating risk-bearing entities taking between 80%-100% upside and downside risk.  However, according to reports, the model didn’t achieve sufficient savings to justify making it a permanent CMMI program.

Recognizing that Next Generation ACOs have developed advanced operational capabilities that can be leveraged, CMMI is giving Next Generation ACOs an opportunity to request to participate in the second year of the Global and Professional Direct Contracting (“GPDC”) Model starting in PY 2022 as a Standard Direct Contracting Entity.  To participate, existing Next Generation ACOs must meet the GPDC Model requirements and must submit application materials to CMS by June 14, 2021.  In addition, Next Generation ACOs that do not participate in the GPDC Model will have the option to apply to participate in the Medicare Shared Savings Program (“MSSP”) for 2022.

Industry response has been relatively tepid, expressing disappointment at the conclusion of the Next Generation ACO model, but relief that Next Generation ACOs will have an opportunity to continue operating in the GPDC Model or under the MSSP.  Without formal guidance, it is not clear whether Next Generation ACO participation in the Direct Contracting program will include only Medicare or both Medicare and Medicaid.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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