The National Association of ACOs (NAACOS) called CMS’ (the Center for Medicare & Medicaid Services) proposals to redo the Medicare Shared Savings Program (MSSP) “misguided,” noting that the changes, if finalized, “will upend the ACO movement by creating havoc with a significant overhaul introducing many untested and troubling policies.”
Late yesterday evening, CMS proposed a rule that included major changes to the existing MSSP ACO (accountable care organization) program. As Healthcare Informatics reported last night, referred to as “Pathways to Success,” CMS’ proposal, which has been expected for a few months, looks to redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track and the ENHANCED track.
Much of the discussion following the rule’s release will likely center around the BASIC track, which essentially limits ACOs to stay in “upside-only” risk models for just two years, compared to the existing allowance of six years. What’s more, those ACOs in an MSSP Track 1 upside-only model would only be able to get 25 percent of any savings they take in, compared to 50 percent, which is the current max.
When ACOs are in a one-sided risk model, they do not share losses with the government when they overspend past their benchmarks, but they do share in the gains. As such, in these one-sided risk models, CMS is on the hook for any losses all on its own.
Indeed, CMS has a clear goal to move ACOs more quickly into two-sided-risk models as the agency has noted that upside-only ACOs are not reducing costs and are costing Medicare money. “We project these changes will result in $2.24 billion in savings to Medicare program over next 10 years,” CMS Administrator Seema Verma stated yesterday.
Stakeholders Show Concern
As expected, NAACOS—a coalition whose members include more than 300 ACOs—had plenty of gripes with CMS’ proposals. Previously, following a survey of its members, NAACOS urged CMS to refrain from mandating ACOs to assume more risk. The organization, earlier this year, specifically reached out to Track 1 ACOs that were about to enter the final agreement period in 2019 before moving into two-sided risk models. The results of their survey showed that 71 percent of ACO respondents indicated they would likely leave the MSSP as a result of having to assume risk.
In a statement released last night, NAACOS President and CEO Clif Gaus noted, “The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered healthcare industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries.”
According to Gaus, “The downside financial risk for patient care would be on top of the significant financial investments ACOs already make, jeopardizing years of effort and investment to improve care coordination and slow cost growth.” He continued, “CMS discusses creating stability for ACOs by moving to five-year agreements, but they are pulling the rug out from ACOs by redoing the program in a short timeframe with untested and troubling polices.”
In the proposal, CMS itself is predicting that more than 100 of the 561 MSSP ACOs will drop out of the program in the next 10 years as a result of this rule. But Gaus said that the number of ACOs who will leave will be far greater than that, referencing NAACOS’ survey from earlier this year. “Given the proposals put forth today, 70 percent could be an underestimate, with even more ACOs leaving the program,” he said.
“It’s naïve to think that ACOs that aren’t ready can be forced to take on risk, given that the program is voluntary. 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,” Gaus said. “This would be a significant setback for Medicare payment reform efforts and would undermine implementation of the overwhelmingly bipartisan Medicare Access and CHIP Reauthorization Act (MACRA), which is designed to move providers into alternative payment models such as ACOs,” he added.
CMS, however, doesn’t seem to have a problem if upside-only ACOs that are costing the government money leave the program if they aren’t willing to take on more risk. Verma said yesterday on a press call that “[Upside-only] ACOs have no incentive, at all, to reduce healthcare costs while improving outcomes, as they were intended.”
On the contrary, NAACOS believes that “The best scientific evidence shows that the Medicare Track 1 ACOs overall are returning millions of dollars of savings to Medicare and improving the quality of care for millions of beneficiaries. To shrink and disable this leading alternative payment model in its early stages defies logic.”
Premier Inc., which has some hospital-led ACOs in its population health management collaborative, released a statement agreeing with NAACOS when it comes to forcing ACOs into more risk. Blair Childs, senior vice president of public affairs, Premier, said, “First, the level or investment and change required to move to two-sided risk is far greater than CMS clearly appreciates by providing only a two-year onramp of no risk for organizations newly entering into an ACO. Forcing providers to accept risk too quickly will deter participation.”
Further, the American Hospital Association (AHA) also believes that CMS’ proposals are too aggressive. Tom Nickels, AHA’s executive vice president, noted that “drastically shortening the length of time in which ACOs can participate in an upside-only model ignores the reality that providers are starting at vastly different points and will have vastly different learning curves when moving toward value-based care.” He added, “The proposed rule fails to account for the fact that building a successful ACO, let alone one that is able to take on financial risk, is no small task; it requires significant investments of time, effort and finances… A more gradual pathway is critical for hospitals and health systems that are interested in participating in risk-bearing models – particularly those that are exploring such models for the first time.”
Some Show Positivity
It should be noted that not all of the reaction that has come in thus far has been negative. Leaders from Orange Care Group, a South Florida-based organization that owns and operates four independent, physician-led Medicare ACOs—including one of the first risk-based Track 3 ACOs—are pleased that CMS is “formally recognizing downside risk ACOs as the future of the model and evolving ACOs to better service Medicare and its patients,” according to Frank Exposito, Orange Care Group’s executive vice president of finance and strategy.
Exposito, in response to e-mailed questions from Healthcare Informatics, also agreed with Verma’s comments yesterday when she said upside-only ACOs have not lived up to the accountability part of their name. “ACOs, by definition, need to be accountable and ACOs who have continually failed to generate savings and improve quality are not contributing to the model and the industry at-large. With the entire market shifting to risk, the ACO model will gain strength in the communities they serve because all ACOs will be incentivized for moving the needle forward,” he said. Exposito further noted, “This will foster more innovation in the space as ACOs seek to mitigate their risk through novel partnerships with high-quality and high-performing acute and post-acute providers, while placing primary-care physicians at the center of their patients’ care. This will ultimately help extend the efforts of Medicare reform across the healthcare continuum.”
Overall, America’s Physician Groups (APG) also considers the proposed rule a very balanced approach to various stakeholders’ concerns as well as a positive step forward in the movement from volume to value, the organization said in a statement, also noting that physician-led ACOs that take on two-sided risk provide superior quality at a lower cost than other ACOs, while saving Medicare money.
Valinda Rutledge, vice president, federal affairs, APG, added that the CMS proposals build in a transitional pathway for those ACOs who are looking to take on more risk. “We know that many of today’s ACOs have experience in upside risk only. The proposed rule acknowledges this and provides for a transition period instead of forcing groups into downside risk right away. We believe that no group should be forced into risk; however, when groups decide to accept the opportunity for shared savings, we also believe that they then should take on the responsibility of saving money for our healthcare system and the people and communities they serve,” she said.
The Health Care Transformation Task Force, meanwhile, said it welcomes the release of CMS’ proposal. “This is an important step to promote value-based transformation and to push industry momentum forward. At first pass, the proposed rule presents novel ideas and careful thinking on how ACOs may better lower cost and improve patient outcomes,” said Jeff Micklos, the group’s executive director.
Official public comments on the rule are due Oct. 16.
