Medicare Payment Project Scrapped After Failing to Save Money

The Biden administration announced Friday that it will terminate another Medicare payment model at the end of the year.

Originally scheduled to end in December 2020, the Next Generation Accountable Care Organization Model had been extended by a year through 2021 because of the Covid-19 outbreak. The model allows participants to assume higher levels of financial risk and rewards for improving health outcomes and lowering costs for beneficiaries in traditional Medicare.

But the model, which was designed to reduce program spending, has actually increased net spending by $117.5 million and produced “no net savings” for the Centers for Medicare & ...