New Medicare ACOs in 2016

Providers share in financial savings if they meet quality and cost benchmarks. Providers can also choose to share in losses in exchange for a higher percentage of shared savings.

*Two subsets of “shared savings” ACOs—called Advance Payment ACOs and Investment Model ACOs—receive upfront funding to encourage creation of ACOs in rural or underserved areas.

ACOs can select from three potential payment tracks:

• Track 1: ACOs share in savings, but not losses. This is called “one-sided” financial risk.
• Track 2: ACOs share in savings, but also in financial losses. This is called “two-sided” risk.
• Track 3: ACOs can receive a greater share of savings (beyond that in Track 2) if they also agree to a greater share of losses. This, too, is called two-sided financial risk.

434 Total Shared Savings ACOs, 2016

• 100 new ACOs added in 2016
• 147 ACOs renewed in 2016
• 22 ACOs will participate in performance based risk tracks in 2016 (tracks 2 or 3).

Providers share in a greater percentage of financial savings, but also a greater percentage of financial losses. Pioneer ACOs are made up of providers already experienced in coordinated care and ACO-like arrangements.

“Unlike other models, this model includes a prospectively (rather than retrospectively) set benchmark, allows beneficiaries to choose to be aligned to the ACO, and tests beneficiary incentives for seeking care at Next Generation [ACO] providers, including increased availability of telehealth and care coordination services.

“The Next Generation Model participants will have the opportunity to take on higher levels of financial risk – up to 100 percent risk – than ACOs in current initiatives. While they are at greater financial risk they also have a greater opportunity to share in more of the Model’s savings through better care coordination and care management. In addition, the ACOs will receive their budgets prospectively, in advance of the performance year, to plan and manage care around these financial targets from the outset. The ACOs will also be able to select from flexible payment options, such as infrastructure payments that support ACO investments in care.”

--HHS Press Release, Jan 11, 2016