Next Generation ACOs Save Money, Report Finds

A report from the Centers for Medicare & Medicaid Services (CMS) determined Medicare's Next Generation model of accountable care organization (ACO) appears to be saving money for participating ACOs, according to MedPage Today . The 18 ACOs that participated in the Next Generation program saved Medicare an average of $18.20 per beneficiary per month (PBPM) in the program's first year. CMA said this decrease "is similar to the decrease noted in the first two years of the Pioneer ACO model, and larger than the decrease noted for Medicare Shared Savings Program ACOs in the early years. However, there was wide variation in spending across ACOs. Seven ACOs showed Medicare cost savings of $30 PBPM, while two showed cost increases of $30 PBPM." The report noted the new ACO model assigns ACOs "nearly complete financial risk sharing (either 80 percent or 100 percent risk) and must take on downside risk ... unlike predecessor ACO models including the Medicare Shared Savings Program and Pioneer models. In addition, there are no minimum savings or loss requirements." In general, CMS estimated a net savings for Medicare of $62.12 million, or 1.1 percent, versus what Medicare would have spent on the same beneficiaries without the ACO.