Anticipating COVID-19 Losses, ACOs May Drop Out of MSSP

April 13, 2020

More than half of risk-based accountable care organizations (ACOs) currently enrolled in the Medicare Shared Savings Program said they are likely to drop out due to the fear of paying losses resulting from the coronavirus disease 2019 (COVID-19) pandemic, according to a survey conducted by The National Association of Accountable Care Organizations.

More than half (56%) of risk-based accountable care organizations (ACOs) currently enrolled in the Medicare Shared Savings Program (MSSP) said they are likely to drop out of the program due to the fear of paying losses resulting from the coronavirus disease 2019 (COVID-19) pandemic, according to a survey conducted by The National Association of Accountable Care Organizations (NAACOS).

Of the 226 ACOs that completed the survey, nearly 60% reported they are likely to quit the program to avoid financial losses. In addition, 77% reported they are "very concerned" about COVID-19’s impact on their 2020 performance.

The MSSP program rewards ACOs for lowering spending and improving patient outcomes. It is the largest value-based payment model in Medicare, with an estimated savings of up to $3.53 billion between 2013 and 2017.

A separate NAACOS analysis found the COVID-19 pandemic could cost Medicare between $38.5 billion and $115.4 billion over the next year alone.

“When ACOs made a commitment to assume risk, they didn’t expect they’d be handling the risk of a global pandemic,” said Clif Gaus, president and CEO of NAACOS, in a press release.

Organizations are currently able to quit the program without penalty before May 31, 2020.

“Medicare’s decade-long effort to change how we pay for healthcare to better reward quality and outcomes may be lost unless Washington acts quickly to throw these providers a lifeline,” Gaus said.

Respondents completed the survey online from April 3-8. Specifically, when asked how likely an ACO would be to leave MSSP:

  • 21% responded "very likely"
  • 21% responded "somewhat likely"
  • 14% responded ‘"likely"
  • 14% responded "don’t know"
  • 30% responded "not likely"

In March, NAACOS and other healthcare organizations asked CMS to “hold harmless” providers in alternative payment models from performance-related penalties for 2020.

“CMS has yet to adequately mitigate the costs and disruptions of the pandemic,” Gaus said, adding millions of Medicare beneficiaries would lose access to care coordination and quality improvement offered by ACOs should the organizations drop out of the program.

Disruptions in routine chronic care management, lack of in-office visits, rescheduling of elective procedures, and diversion of quality control staff to address the pandemic all contribute to ACOs’ concerns.

The survey also found 90% of ACOs report the COVID-19 pandemic will have a "significant" or "very significant" effect on their abilities to earn shared savings.

In addition, there is uncertainty on how the pandemic will affect “changes to acuity or risk scores, diminished opportunities to meet quality requirements related to preventive care, and which patients the ACO will be accountable for this year,” according to NAACOS.

As a result of the pandemic, 25% of respondents said they expect spending to increase by more than 10%, while 25% also responded they expect spending to increase between 5% and 10%. Of all the respondents, 37% selected "don’t know," which, according to NAACOS, illustrates the great uncertainty ACOs face.

“ACOs’ acceptance of financial risk did not account for a global pandemic," NAACOS concludes. "ACO providers are risking their lives treating COVID-19 patients. They should not also be required to risk their businesses, many of which are not equipped to potentially pay millions to the government for increased costs from COVID-19.”