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NORC at the University Chicago

Evaluation of the Next Generation Accountable Care Organization Model

Extensive series of patients, doctors and nurses of various ages and ethnicities in a modern exam room.
Assessing an innovative model to reduce Medicare costs
  • Client
    Center for Medicare & Medicaid Innovation within the Centers for Medicare & Medicaid Services
  • Dates
    2016 - 2023

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:

opens in new tab Visit CMS.gov Website

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