Healthcare associations have written to the Centers for Medicare & Medicaid Services (CMS), urging the agency to reconsider its proposed regulation that would push accountable care organizations (ACOs) more quickly into two-sided risk models.
About two months ago, CMS dropped a rule that proposed sweeping changes to the existing Medicare Shared Savings Program (MSSP), by far the most popular federal ACO model with more than 560 participants. At the center of the proposed rule, called “Pathways to Success,” is a core belief that ACOs ought to move more quickly into two-sided risk payment models so that Medicare isn’t on the hook for money if the ACO outspends its financial benchmarks. Indeed, 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.
Specifically, in the rule, CMS is proposing to shorten the glide path for new ACOs to assume financial risk, reducing time in a one-sided risk model from the current six years (two, three-year agreements) to two years total. This proposal, coupled with CMS’ recommendations to cut potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs—will certainly deter new entrants to the MSSP ACO program. So far, the proposed rule has been met with varying degrees of scrutiny.
What’s more, the proposal 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, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.
ACOs Need More Time, Stakeholders Say
Now, in public comments sent to CMS, stakeholders are officially making their stances known. Yesterday, groups such as Premier, Inc., the National Association of ACOs (NAACOS), and the American Medical Group Association (AMGA) wrote to the federal agency, sharing the consensus opinion that ACOs should be afforded more time in one-sided risk models before they are required to take on downside risk.
NAACOS, an association comprised of more than 360 ACOs across the U.S., wrote to CMS that ACOs entering the program should be able to remain in a shared savings-only model for four years with an additional fifth year available for those that demonstrate superior performance. The association pointed to data that shows that of the 142 ACOs that earned shared savings payments in 2017, 36 percent had losses in one of their first two years of the program, illustrating the need to allow ACOs adequate time to prepare for risk.
To this same point, Premier recommended in its comments to allow at least three years in an upside-only model for new ACOs entering the MSSP. And AMGA similarly wrote that CMS should allow ACOs to have the option to remain in an upside-only track for three years, rather than the two years that CMS has proposed.
Additionally, all three groups are also urging CMS to reverse its proposal on cutting potential shared savings in half—from 50 percent to 25 percent for one-sided risk ACOs. NAACOS specifically believes in “reversing the agency’s proposal to reduce the shared savings rate from 50 to 25 percent for ACOs in shared savings only or low risk models. Instead, NAACOS recommends that shared savings rates should be 50 percent for Basic Levels A and B, 55 percent for Basic Levels C and D, and 60 percent for Basic Level E.”
Similarly, AMGA wrote that “CMS’ proposal of a 25 percent shared savings rate for Basic Levels A and B further weakens what are already nominal financial incentives. The shared savings rate should be no less than 50 percent for upside-only ACOs. Upside only low revenue ACOs should receive higher earned shared savings, for example, 75 percent or 80 percent.” Premier noted much of the same in its comments, attesting that the shared savings rate should be increased to 50 percent.
Will ACOs Stay in the MSSP?
At the core of the debate around the new proposal is if one-sided risk MSSP ACOs are saving the government enough money to warrant more time in these upside-only risk arrangements. CMS Administrator Seema Verma has been steadfast in her comments that these ACOs are not saving Medicare any money. In fact, she said in a press call following the proposed rule’s release in August that “[Upside-only] ACOs have no incentive, at all, to reduce healthcare costs while improving outcomes, as they were intended.” Verma also said she believes that the proposed changes outlined in this rule will result in $2.24 billion in savings to Medicare program over next 10 years.
On the other side of the savings argument are NAACOS and others, who attest that one-sided risk ACOs are saving Medicare significant money, to the tune of $1.84 billion in gross savings over the span of 2013 to 2015. To this point, some healthcare stakeholders fear that the CMS proposals, if finalized, will deter ACOs from staying in the MSSP, as well as prospective new ones from joining. But the federal agency, to this point, seems to be fine with these ACOs leaving the MSSP if they are unwilling to take on more risk.
A new poll from NAACOS, in conjunction with its comments to CMS, has revealed that 60 percent of ACOs who were surveyed oppose the proposed rule, while 27 percent are in favor. For the research, 127 current MSSP ACOs’ responses were included.
The NAACOs survey found that the four biggest challenges in the proposed rule, as noted by the surveyed ACOs, were: reducing the shared savings rates for one-sided risk ACOs; requiring more risk sooner for “high revenue ACOs,” which are typically hospital ACOs; shortening the shared savings-only timeframe for all new and some existing ACOs; and the proposed risk adjustment cap of plus or minus 3 percent, applied across the five-year ACO contract agreement period.
According to the research, after weighing the collective proposals in the rule, almost half of ACOs reported they are likely to continue participating in MSSP. While more ACO respondents report being likely to continue, more than a third report they are unlikely to continue.
What’s perhaps even more concerning to NAACOS is that a high number of ACOs, 60 percent, reported they would be unlikely to begin the MSSP if their ACO was not already participating and if they were evaluating the program under the revised policies.
ACO contract agreements typically renew at the start of the calendar year, so it would be expected that CMS, after weighing the comments, would finalize the rule by January.
