In its fourth year, the Next Generation Accountable Care Organization Model reduced gross Medicare spending by $667 million, due in part to a reduction in skilled nursing facility (SNF) spending, according to an evaluation of the model released last week.
However after factoring in $909 million in shared savings and other payouts, the model was associated with $243 million in net losses.
Next Generation ACOs significantly increased net Medicare spending by 0.4 percent.
Still — the National Association of ACOs praised the program’s performance, stating it netted $230 million to Medicare in 2020 alone — after factoring in shared savings paid to ACOs as well as shared losses and discounts paid to the government. By comparison, Next Gen ACOs netted $194 million after shared savings and losses in 2019 and since 2016 the program has collectively saved more than $1.66 billion in gross savings and $836 million in net savings.
“The impressive Next Gen Model results are the latest illustration of the success of Medicare ACOs, benefiting patients, providers and taxpayers alike,” Clif Gaus, Sc.D., president and CEO of the National Association of ACOs, said in the press release. “Recent ACO results coupled with an enhanced commitment to accountable care from the Biden administration represent a notable paradigm shift toward achieving healthcare transformation.”
Due to expire at the end of the year, NAACOS is pushing for the Center for Medicare & Medicaid Services (CMS) to develop a new full-risk option for ACOs under the Medicare Shared Savings Program.
Reducing SNF spending
With a focus on reducing post-acute care spending and improving care transitions with SNFs by building better relationships, nursing homes remained the most common type of participating facility in the Next Gen ACO model and saw the largest spending reductions.
For the first time since its inception, however, the model reduced acute care spending as well, the largest category of Medicare spending.
The fourth year saw 41 participants across 29 states as 21 Next Gen ACOs exited the model between the first and third year and no new Next Gen ACOs entered in the model in the fourth year. SNFs accounted for the largest group of facility providers with 59% of the 5,767 total facilities.
The Next Gen ACO model has strict criteria for SNFs to join, including risk scoring and length of stay. For example, UnityPoint Accountable Care, which joined the model in 2016, focuses on reducing length of stay in post-acute care and ensuring patients get the right care at the right place and time.
In its fourth year, UnityPoint Accountable Care significantly reduced its SNF spending and days as it uses analytics to better understand who its best performers are.
Increased reductions in SNF days reflected a growing number of Next Gen ACOs reducing this outcome over time and a larger reduction in SNF days and increases in SNF stays were seen for hospital-affiliated Next Gen ACOs. The report suggested this was because hospital-affiliated Next Gen ACOs were better able to coordinate SNF placements for their beneficiaries than physician practice-affiliated Next Gen ACOs.
Since it started, the model has seen SNF spending decline by 2% and other post-acute care facility spending by 3.9%. The difference was even greater in the fourth year with SNF spending down 4% and other facility spending by 6%.
Reductions in spending on professional services, skilled nursing facility (SNF) care, and other post-acute care (PAC) settings contributed to the modest model-wide decline in gross Medicare spending, according to the report.
