CMS won’t extend the Next Generation ACO Model through 2022 but will allow participants to apply for the standard track of its Global and Professional Direct Contracting Model, the agency said in a letter to Next Gens on Friday.

The American Hospital Association, National Association of Accountable Care Organizations and other provider groups had lobbied the Biden administration to extend the Next Gen ACO Model through the end of next year. And their calls grew more urgent after CMS’ Center for Medicare and Medicaid Innovation announced it would pause new applications for its Global and Professional Direct Contracting Model in April. The decision had left many direct contracting entities without a home for 2022, forcing them to reevaluate their plans without knowing what could come next.

Next Gens didn’t get the extension they had sought, but they did get some relief when CMMI announced they would be able to join the GPDC Model if they met the agency’s qualifications.

“We appreciate today’s move to allow Next Gen ACOs a limited opportunity to apply for direct contracting to starting next year. This will be a viable path for some to continue participation in an innovative, accountable care model like direct contracting,” National Association of ACOs CEO Clif Gaus said in a statement.

Other ACOs like those in the Medicare Shared Savings Program still can’t join the GPDC Model unless they applied for it last year and deferred their participation.

Without further action from the agency, Next Gens would have had to sit out the year or move into the MSSP’s Enhanced track. That would have allowed them to stay in an alternative payment model but reduced their risk from 100% to 75%. And it would have given Next Gen ACOs less flexibility, including the ability to adjust downstream payments.

Experts had split on whether the agency should keep Next Gen in place for another year. Some argued it would allow Next Gen ACOs to continue to operate in a full-risk model until CMMI figures out its plans for value-based care. Others believe it would only delay the inevitable and take away resources that could be devoted to its successor, as Next Gens probably wouldn’t have invested much in the model since it would have only lasted one more year.

CMMI’s latest move would allow Next Gens to stay in a full-risk model and give them new freedoms.

“Next Generation ACOs have already built the operational capacity and processes to do value-based health care transformation work, and we believe there would be significant value in leveraging their experience and operational capabilities by offering eligible Next Generation ACOs the opportunity to participate in the GPDC Model test,” the letter said.

Next Gens have until June 14 to demonstrate that they’re able to participate in the GPDC Model.

But NAACOs will continue lobbying for a permanent, Next Gen-like ACO model that provides a better bridge between MSSP Enhanced and the full capitation option under Direct Contracting, Gaus said in a statement.

“With additional time, the (CMS) should consider using Innovation Center authority to test certain successful and popular concepts under Next Gen within the Shared Savings Program, as it did with Track 1+,” the statement said.