CMS Officials Announce Major New Strategies Around ACOs

April 28, 2022
In a “Perspective” op-ed in The New England Journal of Medicine, senior CMS officials announce modifications to Medicare-sponsored ACO programs, and look forward to the future

This week, a group of senior officials from the Centers for Medicare and Medicaid Services (CMS), some from the Center for Medicare, some from the Center for Medicare & Medicaid Innovation (CMMI, also called The Innovation Center) authored an op-ed in the Perspectives section of The New England Journal of Medicine online, in which they outline their strategies for expanding on and strengthening the Medicare Shared Savings Program (MSSP) going forward. In “Expanding Accountable Care’s Reach Among Medicare Beneficiaries,” published on Wednesday, April 27, Douglas Jacobs, M.D., M.P.H., Purva Rawal, Ph.D., Liz Fowler, J.D., Ph.D., and Meena Seshamani, M.D., Ph.D., lay out their evolving strategies. Fowler and Rawal are officials at The Innovation Center, while Jacobs and Sehamani are officials at the Center for Medicare. Their op-ed amounts to a formal statement of strategy around accountable care organization (ACO) development going forward under Medicare.

The authors write that “The Innovation Center has tested several ACO models, of which the Pioneer ACO and ACO Investment Models have achieved net savings; others, including the Advance Payment ACO Model and the Next Generation ACO Model, have not. The Pioneer ACO program, which allowed providers with experience coordinating patients’ care to move more rapidly from a shared-savings payment model to a population-based payment model, was associated with significant reductions in emergency department visits and inpatient admissions. The ACO Investment Model provided advance payments to participating organizations to make infrastructure investments aimed at improving care; such payments could be recouped by CMS by means of earned shared savings.”

They note that “The ACO Investment Model resulted in more providers in rural and underserved communities signing on to participate in ACOs,” with results in better care coordination and reduced utilization. They state that “The ACO Investment Model generated $381.5 million in net Medicare savings between 2016 and 2018. The Innovation Center is currently testing the Global and Professional Direct Contracting Model, which has been redesigned as the ACO Realizing Equity, Access, and Community Health (ACO REACH) Model. This model will examine the effects of new risk-sharing arrangements in traditional Medicare, additional flexibility for beneficiaries (such as the ability to receive in-home care management), provisions for advancing health equity, and reduced administrative burdens for providers on quality of care and Medicare’s costs.”

Nevertheless, despite officials and participants having learned “important lessons around delivery and payment reform,” the authors write that “[I]nadequate alignment among accountable care efforts, limitations of payment approaches, and a lack of focus on health equity have led to several challenges. For example, providers have been able to selectively participate in the programs that produce the most favorable financial outcomes, rather than those that provide the best opportunity to transform care. Participation in the Shared Savings Program has plateaued, and savings for ACOs and Medicare have been limited, partly owing to the benchmark methodologies used to calculate eligibility for savings,” they acknowledge, noting that “’rebasing’ — the process by which benchmarks are recalculated during contract renewals on the basis of observed spending during the previous agreement period — can create a ‘ratchet’ effect, whereby ACOs that reduce their spending are subsequently subject to a lower benchmark, which undermines their chances of achieving savings going forward.” They also acknowledge that the ways in which benchmarks have been calibrated can disincentivize providers taking care of disadvantaged populations.

Given those elements and others, the CMS officials essentially acknowledge that it’s time for a strategic redirection, writing that “Ensuring high-quality, accountable care for all traditional Medicare beneficiaries by 2030 will require strategic alignment among CMS’s ACO efforts. We are considering several changes to the Shared Savings Program and new models to expand participation in ACOs, increase savings for participants and for Medicare, and make access to ACOs more equitable.”

The officials share three key areas of emphasis. “First,” they write, “we plan to use the Shared Savings Program as a chassis for growth and care transformation by synchronizing key ACO features. This approach will provide opportunities to transform care and avoid selection based on financial methods. The Innovation Center will align testing of new ACO models and features with the Shared Savings Program and will hold certain aspects, such as financial parameters, constant. Other program requirements could be waived to evaluate the effects of these changes on participation in ACOs, savings, and equity. This approach,” they write, “could include testing modifications to the Shared Savings Program’s existing features and implementing standalone ACO-based payment and service-delivery models. Successful tests could inform decisions related to improving quality, reducing inequities, increasing savings, and expanding the Shared Savings Program — thereby giving innovations wider reach.”

Then, “Second, CMS is committed to supporting organizations that are new to value-based care and increasing participation among small ACOs that lack experience with performance-based risk, have limited infrastructure and capital, and may need more time than larger organizations to move to two-sided risk. As part of efforts to expand access to the Shared Savings Program in underserved areas, CMS is considering adopting lessons from the ACO Investment Model to help provide the necessary upfront investments for organizations to successfully participate. We are also examining benchmarking approaches that could support increased participation, including among organizations serving patients with high costs of care. These efforts could include addressing the effects of rebasing and regional benchmark adjustments; for example, the Medicare Payment Advisory Commission has discussed the potential for using administratively set benchmarks. The Shared Savings Program has generated consistent cost savings for Medicare, including approximately $6 billion for the trust fund over the past 5 years,3 and has been associated with improvements on some patient-experience measures4 and with better performance than physician groups in the Merit-Based Incentive Payment System, as noted above. Boosting participation would increase opportunities for beneficiaries and providers to benefit from accountable care arrangements,” they note.

And, “Third, we are focused on advancing health equity by expanding the reach of ACOs into underserved communities. ACOs can advance health equity by directing resources according to patients’ needs,5 which cannot be done under the traditional Medicare fee-for-service payment system. CMS is examining the use of incentives to recruit providers that care for underserved populations to join ACOs, leveraging ACO peer-to-peer learning systems to disseminate best practices, implementing data-collection and quality-measurement requirements with the goal of closing gaps in outcomes, and asking providers to consider beneficiaries’ social needs in care plans.”

In that regard, they write, “Starting in 2023, the ACO REACH Model will test equity-enhancing features, including a benchmark adjustment designed to mitigate disincentives for providers to care for underserved populations, requirements for participating ACOs to collect beneficiary-reported demographic and social-needs data and to submit health-equity plans, and a new benefit enhancement that aims to increase access to primary care by expanding nurse practitioners’ privileges. Successful features could be evaluated for possible incorporation into the Shared Savings Program.”

The officials further note that “Addressing social needs must be a central goal of ACOs going forward. Lessons from the Accountable Health Communities Model, which tested the effects of identifying and addressing beneficiaries’ health-related social needs using screening, referral, and community-navigation services, will be examined for potential incorporation into the Shared Savings Program. We are also exploring whether new ACO quality measures related to identifying and addressing social needs could support these initiatives.”

And, they conclude that, “By better aligning CMS’s ACO initiatives and policies, Medicare can create pathways for payers and providers to advance accountable care. This approach could bring improved quality and patient experience, as well as the ability to be part of a care relationship that meets medical and social needs, to more beneficiaries. For providers, alignment of initiatives and policies could increase participation rates and accelerate care transformation. We aim to send clear and consistent signals that the opportunities provided by the Shared Savings Program and Innovation Center models represent a coordinated pathway for supporting         

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