CMS announced a new accountable care organization model known as the Next Generation ACO, designed for existing or new ACOs who are able to take on significantly higher risk than previously available. The model will also allow for greater shared savings opportunity, and is testing the assumption that with more financial upside, the Next Generation ACO will attract providers that are experienced in coordinating managing risk. CMS said the new model "sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care."

CMS will accept applications for the new accountable care model in 2 rounds with the first deadline for submissions on June 1, 2015. The second round of submissions is on June 1, 2016. Providers are expected to participate for five years under the new model.

Our Take: Pharma, Home Health and other suppliers familiar with ACOs should expect Next Gen participants to be more advanced in their ability to contract and form strategic partnerships. This means opportunity for experienced suppliers, but could confound future partnering efforts for those who haven't yet made the deep dive into accountable care.

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