CMS Announces “Investment Model” ACO Funding

CMS will award funding for a new Accountable Care Organization (ACO) innovation model, the Investment Model, beginning January 1, 2016. The Investment Model builds on previous work with advance payments in the shared savings program. This model addresses the need for capital to invest in the equipment and training needed to manage the care of a patient population while increasing the level of financial risk in response to stakeholder concerns.

Two Groups of ACOs

Two groups of ACOs will be eligible to apply for funding under the Investment Model. ACOs that already are participating in the shared savings program may apply from October 15, 2014 to December 1, 2014. CMS will accept applications from new ACOs that will begin participation on January 1, 2016 and ACOs that began participation during 2014 in the summer of 2015.

Types of Payments

Both groups of ACOs will receive two types of variable payments: one “up-front” payment and one monthly payment. Both variable payments will be based on the number of Medicare beneficiaries preliminarily and prospectively assigned to the ACO. The new ACOs also will receive a fixed up-front payment.

Eligibility Requirements

To participate in the Investment Model, ACOs must be accepted into the Medicare shared savings program. ACOs that entered the program in 2012, 2013, or 2014 must have submitted complete and accurate quality reports during the most recent performance year. In addition, the ACO must not: (1) have been assigned more than 10,000 beneficiaries; (2) include hospital participants providers except for critical access hospitals (CAHs) or prospective payment system hospitals with no more than 100 beds; (3) be operated either wholly or in part by a health plan; and (4) have participated in the Advance Payment Program.

Preferences

In its selection process, CMS will favor new ACOs in rural areas and other areas with low penetration and existing ACOs that agree to increase their level of financial risk. It also will give preference to ACOs that have provided high quality care, achieved their financial benchmarks, demonstrated exceptional financial need, or “presented compelling proposals” for the investment of both their own and CMS funds.