CMS wants to reboot its ACO program

Aug. 13, 2018

The Trump administration on Aug. 9 dropped its much-anticipated rule on accountable care organizations.

The agency wants doctors and hospitals in the Medicare Shared Savings Program to take on more financial risk—and to do it more quickly, POLITICO’s Rachel Roubein reports.

“The time has come to put real ‘accountability’ in Accountable Care Organizations,” CMS Administrator Seema Verma wrote in a Health Affairs post laying out the proposed changes.

The key change: The 607-page proposed rule trims the time ACOs can remain in the program without assuming risk from six years to two years. The administration argument: ACOs that take on risk have better incentives to save more and produce better quality outcomes over time.

Why it matters: Just one in five ACOs are currently at risk of losing money in the MSSP program. Most have opted for “Track 1,” in which ACOs can share in savings if they hit key goals but aren’t at risk of having to pay Medicare back.

Meanwhile, the three-track program would be slimmed down to two options: a “BASIC” path that steadily ramps up risk, and an “ENHANCED” path that would allow providers to immediately qualify as an Advanced Alternative Payment Model under Medicare’s physician payment law.

Andy Slavitt applauded the proposal: “They are making the call that people in Track 1 need to move up or out,” the ex-CMS administrator told POLITICO. “This is a decision that keeps getting deferred every year because people say they aren’t ready. But their view is Track 1 is often an excuse to pick up market share and raise prices, not reduce admissions. I have pushed the same direction.”

Prepare for an ACO exodus? In the rule, CMS’ own analysis predicts that 109 ACOs, or roughly one in five, will drop out of the program in the next decade.

The advocacy group for ACOs sounded the alarm. “It’s naïve to think that ACOs that aren’t ready can be forced to take on risk, given that the program is voluntary,” said Clif Gaus, CEO of the National Association of ACOs. “The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value.”

Hospital leaders also suggest that there’s risk in shifting incentives yet again. “[It] can take time to fundamentally change your care model from what it’s been for the last fifty years,” Jonathan Jaffery, SVP/Chief Population Health Officer for UW Health, told PULSE. “It would be unfortunate if providers who have been willing to invest millions to develop new models of care with no guarantee of reward no longer felt like they could take the long-view on their investment.”

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