On Friday, January 10, Seema Verma, Administrator of the federal Centers for Medicare & Medicaid Services (CMS) published an article in the Health Affairs Blog, touting new data around the Medicare Shared Savings Program (MSSP) for accountable care organizations (ACOs). But on the same day, the Washington, D.C.-based NAACOS—the National Association of ACOs)—issued a press release that, while using essentially the same core set of data describing outcomes in Performance Year 2020 for the program, came to very, very different conclusions.
Administrator Verma, writing in the Health Affairs Blog, noted that “January 1, 2020, marked the second start date for ACOs under the redesigned program, following the initial start date for the new program options of July 1, 2019. Today I’m excited to report continued strong interest and robust participation in the redesigned program. For the January 1, 2020 start date, CMS approved 53 applications for new ACOs and 100 applications for renewing ACOs. The total number of Medicare beneficiaries served by health care providers in ACOs is now 11.2 million, up from 10.4 million at the start of 2019. Nearly 30 percent of all beneficiaries in fee-for-service Medicare are now served by a health care provider in a Shared Savings Program ACO.”
Indeed, Verma wrote, “I’m especially proud to report that the number of ACOs taking on risk for cost increases has grown significantly—from 93 ACOs at the start of 2019 to 192 at the start of 2020. The number of ACOs with real accountability has more than doubled over the past year. This will translate to lower costs and higher value for Medicare beneficiaries and taxpayers. CMS greatly appreciates the hard work and creative thinking from health care providers on the front lines who are participating in the program and redesigning their care delivery around value instead of volume. It’s been rewarding to see that low-revenue (physician-led) ACOs have found the new participation options appealing. As of January 1, there are 270 low-revenue ACOs participating in the program, up 27 percent from a year ago. Forming an ACO can provide independent physician practices with an alternative to joining a large hospital system. In an era of rising prices for health care services, and increasing evidence of consolidation leading to higher prices, promoting physician-led ACOs is one of many steps CMS is taking to foster a competitive healthcare market to preserve beneficiary choice and improve value.”
What’s more, Verma wrote, “Sixteen percent of ACOs chose to voluntarily terminate in 2019. While higher than the 11 percent average annual attrition rate the program has seen, not all health care providers that terminated actually left the program—over 40 percent of ACO participants that terminated from an ACO after January 1, 2019 will be participating as part of a different ACO in 2020. The participation rates for January of this year put CMS on track to generate the $2.9 billion in savings over ten years that was projected by CMS’s Office of the Actuary when the Pathways to Success policies were finalized.” And, she said, “In addition to the 2020 Medicare Shared Savings Program participation, CMS is also announcing two sets of results for the Next Generation ACO (“NGACO”) Model. The NGACO Model is administered by the Center for Medicare and Medicaid Innovation. It provides CMS with an opportunity to test higher levels of risk, additional waivers and flexibilities, and different approaches to setting financial benchmarks than in the Shared Savings Program.”
Also on Friday, however, NAACOS issued a very different statement, via a press release. According to the NAACOS press release, “Overall participation in the Medicare Shared Savings Program (MSSP), the country’s dominant value-based payment program, remained flat, following landmark changes the Centers for Medicare & Medicaid Services (CMS) enacted in 2018. Today’s data show 517 ACOs are participating in the program in 2020, down from a high of 561 two years ago and 518 last year. Importantly, 11.2 million beneficiaries – more patients than ever – are being care for by ACOs, and nearly 200 ACOs are taking on down-side risk. However, this year just 35 Shared Savings Program ACOs will enter into their first contract with CMS. Between 2012 and 2018, the program averaged 107 new ACOs annually. Last year was the first time the program saw a drop in overall participation when just 41 new ACOs joined. In the fall of 2018, CMS overhauled the Shared Savings Program to force ACOs to take on risk sooner while at the same time reducing the portion of savings ACOs can keep. NAACOS and other health provider associations warned the changes could harm Medicare’s move to value-based payment by hindering participation in a voluntary program.”
Further, the press release noted, “In a Health Affairs blog last fall, NAACOS urged policymakers to pay close attention to participation numbers released today as CMS’s efforts to move ACOs into risk would be undermined if fewer ACOs participate in or enter the program.” And the press release quoted the Clif Gaus, Sc.D., the association’s president and CEO, as stating that “ACOs have had the greatest success of any of Medicare’s payment reform efforts. If interest in ACOs dwindles, then doctors and hospitals will fall back into a fragmented, fee-for-service system, and any momentum to transform our health system will be lost,” Dr. Gaus said.
What’s more, Gaus said, “NAACOS feared that changes CMS made under Pathways would throw off the careful balance of risk and reward for too many ACOs. Sadly, those fears may be coming true. To date, there have been few attractive alternative payment models besides ACOs, so harming participation in the Medicare Shared Savings Program hurts Medicare’s priority of changing how it pays for care. Congress should take a closer look at this program to ensure more damage isn’t done.”
As NAACOS further noted, “Data increasingly show ACOs are reducing Medicare spending. ACOs collectively saved Medicare $1.7 billion in 2018 alone, and $739 million after accounting for shared savings bonuses and collecting shared loss payments. Last year, the Medicare Payment Advisory Commission reported MSSP reduced spending between 1 and 2 percent from 2013 to 2016, which translates into tens of billions of dollars when compounded annually. An independent analysis commissioned by NAACOS and conducted by a health economics and policy consulting firm showed $3.53 billion in overall savings and more than $755 million in net savings, after paying shared savings to ACOs.” Further, “Medicare’s most advanced, greatest risk-taking ACOs – the Next Generation ACO Model (Next Gen) – collectively saved Medicare $406 million last year, according to 2018 performance data made public. Importantly, these ACOs also hit an average quality score of 93 percent, improving care for 1.4 million seniors. After accounting for shared savings paid to ACOs for holding down costs and hitting quality targets as well as shared losses paid back to the government, the Next Gen program netted $185 million to Medicare last year alone. These figures are impressive especially considering this program only had 50 Next Gen ACOs participating last year.”
