Evaluation of the Next Generation Accountable Care Organization Model
Problem
CMS wanted to know if an innovative cost-cutting program was working.
In its ongoing effort to provide 135 million beneficiaries with appropriate, high-quality health care while being an effective steward of limited financial resources, the Centers for Medicare & Medicaid Services (CMS) has been testing new care and payment models. In 2016,CMS launched its Next Generation Accountable Care Organization (NGACO) model. The model allows ACOs (groups of doctors, hospitals, and other health care providers and suppliers) to keep part of the savings if they adopt strategies to run more efficiently and lower their billings while improving patient care. In funding the program, Congress required CMS to conduct an evaluation to determine whether the NGACO model was working and why. CMS chose NORC as the indpendent evaluator.
Solution
NORC developed and implemented an evaluation of participant ACOs.
Partnering with the CMS Medicare & Medicaid Innovation Center, NORC used a mixed methods approach to evaluate dozens of ACOs in the NGACO model based on key performance indicators:
- What approaches work best, and under what circumstances?
- What yields the biggest savings while maintaining or improving the quality of care?
- How can successful approaches be scaled in other areas of the country?
- What other cost-cutting strategies might NGACO participants suggest?
The evaluation involves analyzing several types of data. Our team is conducting a quantitative analysis of Medicare claims data. For further analysis, results are linked to a database that NORC created for the evaluation, containing information from interviews conducted with ACO leaders and from surveys of executives, clinicians, and Medicare beneficiaries. Our evaluation uses qualitative comparative analysis (QCA) and coincidence analysis (CNA) to test the hypothesis that the different contexts and structures in which NGACOs’ operate and their implementation approaches create distinct pathways to outcomes in the model.
NORC’s most recent report evaluated 37 NGACOs. We analyzed the structural and contextual factors that affected NGACOs’ cost-cutting efforts as well as ACO responses to the COVID-19 public health emergency (PHE). Some NGACOs noted that the infrastructure, partnerships, and resources developed from participation in the NGACO Model better positioned them to respond to needs during the PHE.
Result
NORC’s evaluation produced insights into how ACOs operate in CMS models.
As of 2020, our evaluation shows that NGACOs reduced gross Medicare spending by $1.05 billion (1.5 percent). But after shared savings payouts and other payments that CMS offered to participating ACOs during the PHE, the net effect of the model on spending was a $386.5 million loss.
Learn More About the Study
For more information about the Next Generation ACO Model, including background, model details, and benefit enhancements:
Related Tags
Project Leads
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Kristina Hanson Lowell
Vice President & Senior FellowProject Director -
Gretchen Williams Torres
Associate DirectorDeputy Project Director -
Michelle Spafford
Senior Research DirectorProject Manager -
Shriram Parashuram
Program Area DirectorSenior Staff -
Rachel Friedman Singer
Principal Research ScientistSenior Staff -
Kathleen Rowan
Principal Research ScientistSenior Staff -
Sai Loganathan
Principal Health EconomistSenior Staff -
Susan B. Cahn
Senior Research Scientist
Data & Findings
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opens in new tab"Next Generation Accountable Care Organization (NGACO) Model Evaluation: First Annual Report."
Project Report | September 12, 2018
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opens in new tab"Next Generation Accountable Care Organization (NGACO) Model: Evaluation of Performance Year 1 (2016)."
Project Report | September 12, 2018