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3 Things to Know About the End of the Next Generation ACO Model

With the May 21 announcement that it was discontinuing the Next Generation ACO Model at the end of 2021, the Biden Administration continues to move decisively to put its stamp on The Centers for Medicare & Medicaid Services.

While this decision has serious implications for NextGen ACOs participants, they are not alone.  The in-progress reassessment of CMS alternative payment programs raises questions for all payers and providers currently in these risk-based arrangements. As it does for any health care organizations wholly dependent on Medicare fee-for-service that need and want to move to value-based payments over the next few years.


1.The window to join other CMS value-based payment programs for 2022 is closing fast.

NextGen ACOs need to act quickly if they want to continue with any risk-based CMS programs.

Medicare Direct Contracting: After deciding in April to pause new MDC applicants, CMS is enabling NextGen ACOs to apply to become Standard Direct Contracting Entities. The applicants must meet all the DCE requirements and submit materials showing eligibility by June 14.

Medicare Shared Savings Program: MSSP continues to rely on standard FFS funds flow compared to MDC, which offers capitation and allows DCEs to contract directly with preferred and participating providers. Applicants must give notice of their intent to apply between June 1 and June 7 and complete the first application phase between June 8 and June 28.

For more information about the different options, please see our special Health Insights on Medicare Direct Contracting Pivot: Act Quickly to Capitalize on Alternatives, including comparison tables and fact sheets on MDC v. MSSP. Also, please read Calling All DCEs: Here Are Your Priorities Now and in 2022 and 7 Key Takeaways for Succeeding with Medicare Direct Contracting.


2. Expect a new or updated Medicare value-based payment model by 2023.

Given the general pause on new MDC applicants and cancellation of the NextGen ACO Model, it’s increasingly likely that CMS and its Center for Medicare and Medicaid Innovation (CMMI) will introduce a new advanced payment model for 2023, or at least significantly “tweak” the Medicare Direct Contracting model.

The new program will be what the Biden Administration considers best of breed, addressing the perceived shortcomings in the MDC and NextGen ACO models. This may be a great opportunity for organizations that missed the Medicare Direct Contracting window for a start in the 2021 or 2022 performance years.


3. Prepare now for success in what is certain to be an ongoing transition to more premium risk transfer to providers.

Despite the uncertainty over specific programs, the direction is clear and providers need to act now. Five important steps to take:

  • Assess your current managed care contracts, talk with your payers and select a small number of key partners with which to grow Medicare Advantage, commercial and Medicaid managed care.
  • Determine what population health management and managed services organization (MSO) services you want to build, buy or leave with the health plan. Then create a plan to close your gaps between current state and best practice as you work with your payers to create a roadmap to capitation, or at least well-structured global risk arrangements.
  • Work with physician leadership to create a best-in-class care model with a top of license staffing model and the necessary analytics and care management workflow tools.
  • Partner with your physicians to ensure you have deeply engaged physician leaders and a strong overall physician-led governance model across your APM and the IPA or CIN supporting your value-based contracting with payers.
  • Evaluate your network needs and create a plan to close network gaps based on your geographic and population attribution goals, assessing both adequacy and also performance in order to build a high-performing network of physicians and other providers.


Building out the infrastructure, capabilities and people to thrive under risk-based contracting is no small undertaking. But it is necessary to continue to thrive with value-based care.


For more information on CMS APMs and how to succeed in value-based payment arrangements with all payers, please contact us at

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