Game of Perceptions: In Arguing the Numbers, CMS Officials and Provider Associations Are Seeing the World Through Different Lenses

Sept. 24, 2019
The war of words between CMS Administrator Seema Verma and ACO and provider leaders has been heating up—with tremendously important issues at stake for all the stakeholders involved

The war of words taking place right now around the Medicare Shared Savings Program (MSSP) is both strangely compelling, and profoundly consequential. Seema Verma, Administrator of the federal Centers for Medicare and Medicaid Services, has been engaged in what’s becoming a pitched battle with a number of provider associations, most notably the leaders at the National Association of Accountable Care Organizations, or NAACOS.

Even as Administrator Verma continues to argue, with increasing vehemence, that the accountable care organizations (ACOs) participating in the MSSP must move far more quickly into two-sided risk than most appear to want to do so, NAACOS’s leaders—along with the leaders of several other prominent associations and alliances—have been actively and publicly pushing back against her demands, and, importantly, challenging some of the core assumptions underlying her arguments around CMS’s push towards two-sided risk. It’s a conflict with considerable consequences for the future of ACOs in the U.S. healthcare delivery system, given the large number participating in the MSSP—even as many private health insurers are moving forward even faster in their individual ACO contracts with providers.

It was in this context of increasing acrimony that three senior leaders at NAACOS wrote an opinion piece in the Health Affairs Blog on September 11 entitled “ACO Participation Numbers Worth Watching as CMS Changes Take Root.” In that opinion piece, David Pittman, Allison Brennan, and Clifton Gaus, ScD—NAACOS’ health policy and communications adviser, its senior vice president of government affairs, and its president and CEO, respectively—directly challenged key assertions that Administrator Verma has been making this year.

As Pittman, Brennan and Gaus wrote in their blog, “In mid-July, the Centers for Medicare and Medicaid Services (CMS) released the latest number of accountable care organizations (ACOs) participating in the Medicare Shared Savings Program. This was the first opportunity for ACOs to apply to participate in CMS’s largest value-based payment program since the agency redesigned the program last year. Changes CMS calls ‘Pathways to Success’ took effect on July 1.”

Further, the three NAACOS leaders wrote, “In a Health Affairs blog post, CMS administrator Seema Verma wrote more ACOs “are taking on real accountability” for Medicare patients. Many ACOs opted to stick with the Shared Savings Program after years of investing in care coordinators, information technology, and changing the culture of their respective health systems to care more about disease prevention and cost reduction. There is also a growing knowledge base that ACOs can turn to for successful practices. A recent Health and Human Services Inspector General report outlined several strategies high-performing ACOs used to lower spending by an average of $673 per patient. All efforts to improve our delivery system and change incentives in health payments are not only appreciated, but sorely needed.”

What’s more, they contended, “Verma and CMS failed to point out several concerning findings in the latest participation numbers. In 2019, the Shared Savings Program experienced a dip in ACO participation for the first time since it started in 2012, according to CMS data (exhibit 1). Fewer than half the number of new ACOs joined this year compared to the average of all previous years. While more ACOs than ever are taking on risk for their performance, ACOs dropped out of the program at record numbers as well, according to our analysis of publicly available data. While not yet a reason to sound an alarm, these data will be problematic for the Medicare program, patients, taxpayers, and providers if they continue. Policy makers should pay close attention as we move forward.”

Importantly, the NAACOS leaders noted that “July’s data showed just 41 new ACOs joined the Shared Savings Program in 2019 (exhibit 2). The previous low was in 2015, when 89 joined. The average between 2012 and 2018 was 107 new ACOs annually—more than two-and-a-half-times above what we experienced this year. Overall participation dropped from 561 to 518 ACOs. More Medicare beneficiaries are now being cared for by Shared Savings ACOs, up to 10.9 million, or more than a quarter of those in traditional or fee-for-service Medicare. While this is an increase from the 10.5 million the program took responsibility for last year,” they wrote, “our analysis of publicly available data showed Shared Savings ACOs grew by an average of 1.46 million beneficiaries annually between 2013 and 2018.”

There are a lot of numbers here, but what is fundamentally in contention is the question of whether Verma and CMS are pushing the leaders of participating ACOs too hard, and potentially risking mass defection; or are doing what’s right and steering the ship of payment innovation at the right pace.

In our editorial team's interviews with ACO and provider leaders, one thing becomes absolutely clear each time: they are working as hard as they can to move forward into value-based care delivery and payment; but nearly all of them, to a person, feel that Verma and CMS officials don’t understand their challenges, and perhaps, don’t even care. They feel unheard and pressured. The rule forcing ACO leaders to decide very quickly, at the beginning of the year, without the opportunity to do in-depth data analysis before choosing which MSSP track to take on, felt to many like a slap in the collective face of providers. What’s more, they see Verma and her fellow senior CMS officials as continuing to paint an overly rosy picture of the landscape around two-sided risk.

Meanwhile, Verma and her fellow senior federal healthcare policy officials keep looking at the immense cost cliff that we as a country are about to go over, with the Medicare actuaries telling us in March that overall U.S. healthcare system expenditures will soar in the next several years from the current $3.3 trillion-ish a year to $5.963 trillion by 2027—just eight years from now. That’s somewhere around a 56-percent increase in overall U.S. healthcare expenditures in eight years. And though the word “unsustainable” has now been used for about 25 years with regard to healthcare spending growth, that increase begs the use of the word “unsustainable.”

So we really are in a moment of great tension here, and it’s no wonder that arguments are continually breaking out about what can be done—and how fast it can be accomplished. My wish in all this would be for Verma and her fellow senior officials at CMS to think very carefully about what they’re asking (demanding?) of healthcare leaders, and how they’re asking it. Because even though they have the healthcare inflation numbers on their side of the argument, ultimately, it will have to be the providers who will come to the rescue of the overall U.S. healthcare system, not senior federal healthcare policy officials. And the providers need to know that they’re being listened to, and heeded. And that is an eminently reasonable request, in the context of all these challenges and complexity—it really is.

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