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New Medicare ACOs in 2016

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January 13, 2016


Medicare’s ACO program continues to expand with new ACOs and new types of ACOs.


The Center for Medicare & Medicaid Services (CMS) announced that 100 more Accountable Care Organizations have joined the ACO Shared Savings program in 2016, and 147 ACOs have renewed their participation. This brings the total number of Medicare Shared Savings ACOs to 434.


  • Shared Savings ACOs receive a portion of any financial savings if they meet quality and cost benchmarks. Providers can also choose to share in losses in exchange for receiving a higher percentage of savings. For 2016, 22 ACOs have chosen these higher risk/reward payment tracks.


CMS also announced that 21 ACOs will participate in the newly created Next Generation ACO model which gives participants the opportunity to take on even higher levels of financial risk, up to 100 percent. In exchange, Next Generation ACOs will also be able to receive a greater share of potential savings.


This chart outlines the three ACOs models, their main features, and the number of ACOs in each for 2016.


Type of ACO


More Details

Number of ACOs

Shared Savings

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




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.


The number of Pioneer ACOs has declined from 19 to 9 during 2015. Some dropped out, while others transitioned to other ACO models, including Next Generation ACOs.
Next Generation
Begun in 2016, providers can take on even greater financial risk than Pioneer ACOs, including total financial risk for providing care for a specific population.

“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

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