Advanced Payment Model for ACOs

November 3, 2011 – The Advanced Payment Model is an Innovation Center initiative designed for participants in need of prepayment of expected shared savings to build their accountable care organization under the Medicare Shared Savings Program (SSP).  This program is designed to test whether and how pre-paying a portion of future shared savings could increase participation in the SSP, and whether advance payments will increase the amount of and speed at which ACOs can effectively coordinate care to generate Medicare savings. These advanced payments will be recouped from the shared savings earned by the ACO participants.
 
Payment Structure
 
Participating ACOs will receive three types of payments. 

• An upfront, fixed payment. 
• An upfront, variable payment.  EachACOwill receive a payment based on the number if its historically-assigned beneficiaries
• A monthly payment of varying amount depending on the size of theACO

CMS will recoup Advance Payments through an ACO’s earned shared savings. ACOs selected to receive advance payments will enter into an agreement with CMS that details the obligation to repay advance payments.
 
If the ACO does not generate sufficient savings to repay the advance payments midway through the ACO’s second performance year, CMS will recoup the balance from earned shared savings in the subsequent performance year.
 
CMS will not pursue recoupment on any remaining balance of advance payments after the ACO completes the first agreement period. CMS will pursue full recoupment of advance payments from any ACO that does not complete the full, initial agreement period of the Shared Savings Program.
 
Eligibility/Selection:
 
The Advance PaymentACOModel is only open to two types of organizations participating in the Shared Savings Program: 

1. ACOs that do not include any inpatient facilitiesANDhave less than $50 million in total annual revenue.
2. ACOs in which the only inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitalsANDhave less than $80 million in total annual revenue.

Only ACOs that enter the SSP in April 2012 or July 2012 will be eligible for advance payments.  ACOs that are co-owned with a health plan will be ineligible, regardless of whether they also fall into one of the above categories.
 
Additional information on this program can be obtained by clicking below:
 
Advanced Payment Initiative

Tags: Healthcare Reform