Next Generation ACO model saves Medicare $349M before incentive payments

The Next Generation Accountable Care Organization model reduced gross Medicare spending for calendar years 2016 to 2018 by $349 million (0.9%) without increasing preventable hospitalizations or readmissions, according to findings released last week by the Centers for Medicare & Medicaid Services. Lower spending on professional services, skilled nursing facilities and other post-acute care contributed to the spending reductions, which may reflect participants’ investment in SNF networks, improved coordination and care transitions and substitution for higher-cost settings, the agency said.

Participants in the model can choose varying levels of financial risk, and receive financial incentives and care management tools to improve health outcomes and lower spending for an assigned Medicare fee-for-service population.

Net Medicare spending for CYs 2016-2018 rose by $118 million (0.3%) after accounting for shared savings and other incentive payments. CMS recently extended the five-year model through 2021 due to the COVID-19 pandemic. For additional results from the first three performance years, see the full evaluation report.