Survey Predicts Massive Defection from MSSP; NAACOS Calls for Hold-Harmless on COVID-19-Related Losses

April 14, 2020
NAACOS on Monday released a member survey that predicts that a majority of ACOs could leave the MSSP program if CMS refuses to hold them financially harmless over COVID-19-related losses in 2020

The Washington, D.C.-based National Association of Accountable Care Organizations (NAACOS) on April 13 released the results of a survey of member ACOs that holds dire implications for the Medicare Shared Savings Program (MSSP) for ACOs; at the same time, the association called on the federal Centers for Medicare and Medicaid Services (CMS) to hold harmless all providers participating in the MSSP program and the Next Generation ACO Program, for all financial losses they experience in 2020 because of the COVID-19 pandemic.

As published to its website, NAACOS announced the results of its member-ACO survey on Monday morning. The press release began, “More than half, 56 percent, of healthcare organizations taking financial risk in a Medicare program proven to lower the cost of care said they are likely to drop out of that program because of fear of having to pay massive losses resulting from the COVID-19 pandemic, as shown by a new survey featured in a report released today. The National Association of Accountable Care Organizations (NAACOS) surveyed the ACO community to gauge their experience in handling the ongoing pandemic,” the press release said. “As a result of swings in unpredictability and spikes in expensive hospitalizations, 21 percent of at-risk ACOs said they were ‘very likely’ to leave the Medicare ACO program, 14 percent said they were “likely,” and another 21 percent said they were “somewhat likely” to leave. Almost 80 percent of ACOs said they were “very concerned” about their ACO performance this year.”

As the release noted, “The Medicare Shared Savings Program, first piloted during the George W. Bush administration and fully launched in 2012, rewards ACOs, which are groups of doctors and hospitals who voluntary come together to take responsibility for the costs and quality of a defined set of patients, for lowering spending and improving outcomes for patients. The program has saved as much as $3.53 billion from 2013 to 2017. Almost 20 percent of Medicare beneficiaries and nearly 500,000 clinicians practice in an ACO in 2020, making the Shared Savings Program the largest value-based payment model in Medicare.”

“When ACOs made a commitment to assume risk, they didn’t expect they’d be handling the risk of a global pandemic,” Clif Gaus, Sc.D., NAACOS president and CEO, said in a statement contained in the press release. “Rather than be forced to pay enormous losses resulting from the pandemic, these groups of providers may sadly quit the program, which they can do without penalty by May 31. Medicare’s decade-long effort to change how we pay for health care to better reward quality and outcomes may be lost unless Washington acts quickly to throw these providers a lifeline.”

NAACOS surveyed the ACO community in an online poll between April 3 and April 8. The 5-question online survey went to all 2020 Medicare Shared Savings Program and Next Generation ACO Model participants, including NAACOS members and nonmembers. There were 304 responses from 226 ACOs across the country. 

Among the key findings of the survey:

> Among respondents, 77 percent of ACO leaders are “very concerned” about the impact of COVID-19 on their ACOs’ 2020 performance; another 17 percent are “somewhat” concerned. Meanwhile, just 4 percent are “neutral,” 1 percent are “not concerned,” and 1 percent don’t know.

>   How significant an effect with the pandemic have on their ability to successfully earn shared savings in 2020? Fully 65 percent said a “very significant” effect; another 25 percent said a “significant” effect; and a further 8 percent said a “somewhat significant” effect; while just 2 percent said that the effect would not be significant.

>   How likely is their ACO to leave the MSSP in response to concerns about having to potentially repay losses for 2020 affected by COVID-19? The responses were as follows: 21 percent, “very likely”; 14 percent, “likely”; 21 percent, “somewhat likely”; 30 percent, “not likely”; and 14 percent don’t know.

As NAACOS noted, “The MSSP has a May 31 deadline for risk-based ACOs to give notice of quitting to avoid losses, as well as potential savings opportunities, for this year.” As a result, “The survey found that 56 percent of risk-based MSSP ACOs report they are likely to leave the MSSP in response to concerns about having to potentially repay losses in 2020 because of COVID-19.”

As the press release noted, “A NAACOS analysis estimated the ongoing COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year. Providers are also seeing disruptions in chronic care management as routine, in-office visits are cancelled. Quality control staff are being diverted to handle COVID-19 response elsewhere. Elective procedures, which are being delayed now, are likely to be rescheduled for later in the year when the pandemic eases.”

What’s more, “A quarter of survey respondents said they expect spending to increase by more than 10 percent as a result of the pandemic. Almost another quarter said they expected spending to increase between 5 and 10 percent. Only ten percent said they expect spending to remain the same or fall because of the pandemic, and the remaining 37 percent of respondents selected “don’t know,” illustrating the great uncertainty they face.”

As NAACOS noted, “A likely driver for ACOs to quit the program is the uncertainty about costs, quality, and utilization for 2020. COVID-19 has upended normal utilization and care patterns, disrupting ACOs’ ability to employ successful population-health strategies and causing tremendous uncertainty about costs. There is also notable uncertainty on how the pandemic will affect other aspects of the ACO program, such as changes to acuity or risk scores, diminished opportunities to meet quality requirements related to preventive care, and which patients the ACO will be accountable for this year. This uncertainty was strongly noted by survey respondents in comments, and 65 percent reported that the scope of the effects of COVID-19 will make it very difficult for them to accurately predict their ACO’s 2020 performance.”

Indeed, asked how difficult it will be to accurately predict their organizations’ 2020 performance, because of COVID-19, 65 percent said it would be “very difficult”; another 25 percent said it would be “difficult” to do so; 7 percent rated it “somewhat difficult.” Only 1 percent said it would not be difficult, while another 2 percent said they didn’t know how difficult it would be.

That said, “Increased uncertainty about performance is tied in large part to what the net effect of COVID-19 will be on each ACO’s performance year expenditures. There is considerable variability across the country. Certain areas are designated as COVID-19 hotspots, while others are seeing very low numbers and bracing for possible surges in infection rates and deaths in the coming weeks and months. At the same time, there is a significant decline in elective procedures and routine preventive care. When asked to provide their best estimate of the net effect of COVID-19 on their ACO’s 2020 expenditures, respondents gave a range of answers with a majority, 53 percent, predicting increased spending and almost 40 percent of respondents selecting ‘don’t know.’” Specifically, 2 percent said they anticipated a decrease in expenditures of greater than 10 percent in 2020; 3 percent saw a decrease of 5-10 percent; 3 percent saw a decrease of 1-4 percent; 2 percent saw no net effect on spending; 5 percent saw a 1-4 percent increase in spending; 23 percent saw a 5-10 percent increase in spending; and 25 percent saw an increase of greater than 10 percent; while 37 percent said they don’t know what the impact will be.

As a result of all of these concerns, “NAACOS and nine other leading healthcare organizations asked the Centers for Medicare & Medicaid Services (CMS) last month to hold harmless providers participating in alternative payment models from performance-related penalties for 2020, among other requests.” As NAACOS CEO Gaus said in the press release, “CMS has yet to adequately mitigate the costs and disruptions of the pandemic. ACOs are telling us that they will leave the program unless there is protection from the losses of the pandemic, and it would be a tragedy for millions of Medicare beneficiaries to lose the access to care coordination and quality improvement that ACOs offer,” he said.

Indeed, Gaus added, “Because of the work of ACOs, many communities already had programs in place that are helping patients during this challenging time. For example, ACOs have been instrumental in establishing initiatives such as care management at home through both post-discharge and care management visits, telemedicine, integrated home health, effective relationships with post-acute providers, and an understanding and use of waivers,” Gaus said. “While that work has helped our health system pivot in their COVID responses, the financial strain and external forces may be too much to survive this pandemic.”

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