ACO Improvement Act of 2016

ACO Improvement Act of 2016 This bill amends title XVIII (Medicare) of the Social Security Act to allow an accountable care organization (ACO) to: (1) reduce or eliminate certain cost-sharing for primary care services provided within the ACO's network; (2) develop incentives to encourage patient engagement; (3) elect prospective assignment of Medicare fee-for-service beneficiaries; and (4) if specified requirements are met, distribute internal cost savings. The Centers for Medicare & Medicaid Services (CMS) shall waive specified regulatory requirements for ACOs that have elected to share in both savings and losses under a "two-sided risk model." In addition, the bill: (1) requires CMS to waive, with respect to certain ACOs, specified limitations regarding telehealth services; (2) allows certain ACOs to depart slightly from specified minimum enrollment requirements; (3) requires CMS to establish a demonstration project for allowing growth of certain prospective risk scores; (4) and allows CMS to make permanent certain ACO-related pilot programs that have been successful.