Centers for Medicare and Medicaid Services Announces ACO Investment Model

The Centers for Medicare and Medicaid Services has announced the availability of an additional $140 million in federal funding for Medicare Shared Savings Program Accountable Care Organizations (ACOs) to assist with start-up costs and to provide advance payments of potential shared savings rather than waiting for an end-of-year calculation of payments. The ACO Investment Model was developed in response to stakeholder concerns and available research suggesting that some providers lack adequate access to the capital needed to invest in infrastructure necessary to successfully implement population care management. Participation in this ACO Innovation Model will be limited to two groups of ACOs:

New Shared Savings Program ACOs joining in 2016: The ACO Investment Model seeks to encourage uptake of coordinated, accountable care in rural geographies and areas where there has been little ACO activity, by offering pre-payment of shared savings in both upfront and ongoing per beneficiary per month payments. These ACOs can be eligible for three types of payments:
+ An upfront, fixed payment: Each ACO receives a fixed payment.
+ An upfront, variable payment: Each ACO receives a payment based on the number of its preliminarily prospectively-assigned beneficiaries.
+ A monthly payment of varying amount depending on the size of the ACO: Each ACO receives a monthly payment based on the number of its preliminarily prospectively-assigned beneficiaries.

ACOs that joined Shared Savings Program starting in 2012, 2013 and 2014: The ACO Investment Model also will help ACOs succeed in the shared savings program and encourage progression to higher levels of financial risk, ultimately improving care for beneficiaries and generating Medicare savings.
These ACOs can be eligible to receive two types of payments:

+ An upfront, variable payment: Each ACO receives a payment based on the number of its preliminarily prospectively-assigned beneficiaries.
+ A monthly payment of varying amount depending on the size of the ACO: Each ACO receives a monthly payment based on the number of its preliminarily prospectively-assigned beneficiaries.

Applications for the ACO Investment Model can be submitted between October 15 and December 1 by ACOs that started in the Medicare Shared Savings Program in 2012 or 2013. The application period for ACOs that started in 2014 or will start in 2016 will open in the summer of 2015.