On Sept. 14, Seema Verma, Administrator of the federal Centers for Medicare & Medicaid Services (CMS), shared 2019 performance data from the accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP), in an article posted online in Health Affairs. In the article, “2019 Medicare Shared Savings Program ACO Performance: Lower Costs And Promising Results Under ‘Pathways to Success,’” Verma boasted of $1.9 billion in total net savings to Medicare during 2019, and praising the ACOs that have performed well under the Pathways to Success program requirements.
“Over the last three years, under the Trump Administration, the Centers for Medicare & Medicaid Services (CMS) has been advancing innovative payment and service delivery models to help move our health care system from one that pays for volume to one that rewards providers for keeping patients healthy, improving health outcomes and lowering costs,” Verma wrote. “A critical feature of value-based care is organizations taking on downside financial risk and accountability for the cost and quality of care their patients receive. CMS’ Medicare Shared Savings Program is our largest value-based payment program in fee-for-service Medicare for “Accountable Care Organizations” or ACOs. ACOs are groups of health care providers that voluntarily agree to be held accountable for the quality, cost, and experience of care for a population of fee-for-service Medicare beneficiaries.”
Speaking of changes that were introduced nearly two years ago, Verma wrote that, “After six years of operating the Medicare Shared Savings Program, in December 2018 the Trump Administration redesigned the program, issuing the ‘Pathways to Success’ final rule. The rule established new participation options and incentives to put ACOs on a quicker path to taking on real risk. The new participation options adopted under Pathways to Success require accountability for spending increases, generally after two years for new ACOs, and close evaluation of the quality of care provided. They also provide an option for new “low-revenue” ACOs, which are generally run by physician practices rather than hospitals, to elect an additional year before taking on ‘downside’ risk for cost increases, since data showed that physician-led ACOs performed better than hospital-led ACOs. Under the Pathways to Success policies, there have been two application cycles, with ACOs joining or entering new agreement periods on July 1, 2019, and January 1, 2020. As a result of these two application cycles, the number of ACOs taking on downside financial risk has nearly doubled,” she noted.
Verma highlighted the fact that, “In 2019, 541 ACOs in the Medicare Shared Savings Program generated $1.19 billion in total net savings to Medicare, the largest annual savings for the program to date. This is also the third year in a row that the program has achieved net program savings. Consistent with prior years, ACOs with shared savings continued to reduce post-acute care spending, along with hospitalizations and emergency department visits.” Over 11.2 million fee-for-service Medicare recipients (individuals not involved in Medicare Advantage health plans) are currently cared for by MSSP-participating ACOs.
Verma was quick to praise ACOS participating under the Pathways to Success terms of participation. “The ACOs under Pathways to Success participation options performed better than legacy track ACOs, showing net per-beneficiary savings of $169 per beneficiary compared to $106 per beneficiary for legacy track ACOs,” she wrote. “While ACOs with more experience continued to achieve greater savings, new entrant ACOs under Pathways to Success achieved net per-beneficiary savings of $150. This is the first time ACOs new to the program had lower spending relative to their benchmarks in their first performance year. We look forward to gaining further program experience to evaluate program dynamics, benchmark incentives, and counterfactual program impacts.”
Verma further noted that “ACOs (both legacy track and those in the new participation options established under Pathways to Success) that took on “downside risk” or responsibility for additional costs under the program continued to outperform ACOs that did not, with net per beneficiary savings of $152 per beneficiary compared to $107 per beneficiary. These legacy track ACO trends informed our approach in Pathways to Success to encourage ACOs to take on downside risk sooner. And similarly, ACOs under the Pathways to Success policies that took on downside risk performed better than those that did not, achieving net per beneficiary savings of $193 per beneficiary compared to $142 per beneficiary for those that did not.” And went out of her way to praise physician-led ACOs, most of which were designated as “low-revenue” ACOs, in contrast to “high-revenue,” hospital-organized ACOs. “Overall, low-revenue ACOs had net per-beneficiary savings of $201 per beneficiary compared to $80 per beneficiary for high-revenue ACOs,” she noted. “This trend is the same for ACOs in the new Pathways to Success participation options, where low-revenue ACOs had net per-beneficiary savings of $189 while high-revenue ACOs had net per-beneficiary savings of $155.” She also noted that rural ACOs have improved their performance, particularly the rural ACOS participating under the Pathways to Success rules. Among ACOS participating under Pathways to Success, rural ACOs generated $158 net per-beneficiary savings compared to the $170 net per-beneficiary savings generated by their urban counterparts. That margin was far smaller than among the ACOs in the non-Pathways to Success group. There, urban ACOs generated $125 net per-beneficiary savings, while rural ACOs generated $64 net per-beneficiary savings.
NAACOS responds
Leaders at the Washington, D.C.-based NAACOS (National Association of ACOs) commented on Monday afternoon, noting in a press release that “Medicare’s largest alternative payment model by far had another record year of savings while continuing to provide high-quality care, as shown by data on 2019 performance released today by the Centers for Medicare & Medicaid Services (CMS). The Medicare Shared Savings Program, the ACO model that served 11.2 million seniors in 2019, collectively saved Medicare $2.6 billion last year, and $1.2 billion after accounting for shared savings bonuses and collecting shared loss payments.”
“These results clearly show that ACOs are helping improve our health system at a time when it’s needed more than ever,” said Clif Gaus, Sc.D., president and CEO of NAACOS, said in a statement contained in the press release. “When we emerge from the ongoing pandemic, we’ll need alternatives to fragmented fee-for-service and better cost-control strategies, which ACOs provide. There should be no debate that we need to foster the growth of more ACOs so their benefits are delivered to more seniors.”
The NAACOS leaders went on to note that “Last year was the first year under CMS’s new ACO structure it calls “Pathways to Success”. But only 5 percent of eligible ACOs took CMS’s offer to enter the redesigned program structure early and instead chose to remain under the previous MSSP rules. “Unfortunately, ‘Pathways to Success’ has already shown to diminish ACO participation,” Gaus said. “To get program growth back on track, Congress needs to take a close look at the Value in Health Care Act, which makes several improvements to the Medicare ACO program and better incentivizes Advanced Alternative Payment Models.”
The NAACOS leaders also noted that, “According to CMS communications about the results, 92 percent of eligible ACOs earned quality improvement reward points in 2019, with ACOs showing the greatest improvements in the patient safety and care coordination quality domain. ACOs continued to show better or comparable quality performance on measures compared to other physician group practices.” And, they note, “ACOs generated net savings to Medicare when we compare them across key categories. Specifically, ACOs in both shared savings-only models and risk-based models had net savings for Medicare, as did ACOs in low- and high-revenue categories, and ACOs in the legacy MSSP models and the new Pathways to Success model. In addition to the positive 2019 results from CMS, multiple analyses have shown ACOs are lowering Medicare spending by 1 percent to 2 percent, which translates into tens of billions of dollars of reduced Medicare spending when compounded annually.”
Premier applauds ACO leaders’ progress
Leaders at the Charlotte-based Premier Inc. applauded MSSP ACO leaders for their 2019 work. Blair Childs, senior vice president for public affairs at Premier, said in a statement that “Premier congratulates the 541 ACOs in the 2019 Medicare Shared Savings Program for achieving the highest net total Medicare savings to date—$1.19 billion—while delivering high-quality care. These impressive results reinforce the innovativeness of America’s healthcare providers as well the value of the ACO model. Premier alliance members have been leading participants in these models from the start and remain committed to delivering cost effective, integrated care to their patients. They are committed to moving from our current fragmented and sickness-based healthcare system to one that rewards quality and health.”
Childs went on to say that, “While CMS cites better performance of ‘low-revenue’ or physician-led ACOs, our experience has not shown that to be the case. We believe it is important to maintain a level competitive playing field for all ACOs. Model designs that discourage inclusion of hospitals undermine the objective of ACOs, which is to coordinate care across all providers to improve care, as well as potentially jeopardize access to needed patient care. Changes are needed,” he added, “to speed progression to advanced risk-based models. Congress can further incent providers to participate in ACOs by lowering the APM Incentive Payment thresholds in MACRA to ensure more clinicians have the opportunity to become a Qualifying APM Participant (QP) and participate in Advanced APMs and by extending the 5 percent bonuses available to QPs participating in Advanced APMs. Moreover, Congress should also pass the Rural ACO Improvement Act (2648) / Accountable Care in Rural America Act (H.R. 5212) that would remove an ACOs’ attributed population from the regional benchmark calculation.”
