CMS is proposing an overhaul for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program by reducing the amount of time an ACO can stay in a 1-sided risk arrangement to 2 years. CMS said it expects to save about $2.24 billion over 10 years even as the number of ACOs drop. CMS is renaming the program "Pathways to Success."
This story has been updated.
CMS is proposing an overhaul for accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) by reducing the amount of time an ACO can stay in a 1-sided risk arrangement to 2 years. CMS said it expects to save about $2.24 billion over 10 years even as the number of ACOs drop.
CMS is renaming the program "Pathways to Success."
“Paying for value rather than volume is not a new concept,” said CMS Adminstrator Seema Verma, who called the present arrangement of the MSSP program a perverse incentive, since the majority of ACOs are in the "upside-only" track, which means they are not responsible for reimbursing CMS for any spending that exceeds expected losses.
“The program has not lived up to the accountability part of their name,” said Verma.
The new program will ask providers to incentivize good health in the form of gifts cards or vouchers and will also include payments for telehealth, CMS said. The present MSSP program was created in 2012 by the Affordable Care Act.
ACOs are groups of healthcare providers that agree to take responsibility for the total cost and quality of patient care. In return, ACOs receive a portion of the savings they achieve, and CMS provides them with waivers from some regulations.
CMS said 10.5 million of the total 38 million beneficiaries in fee-for-service (FFS) Medicare are in ACOs under the MSSP.
For current ACOs whose agreements expire at the end of 2018, CMS is proposing a 6-month extension along with a special 1-time July 1, 2019, start date that will have a spring 2019 application period for the new participation options.
CMS said the MSSP program did not save enough in Medicare funding, and that there were increases in net spending for CMS in part because most ACOs—460 of the 561, or 82% of all ACOs—do not take enough risk. CMS said the lack of risk may also be causing consolidation in the healthcare market.
CMS said the changes will wring more savings from fewer ACOs, as the number will cause fewer ACOs to participate. CMS said it expects 109 ACOs to leave the program over 10 years.
In May, the National Association of Accountable Care Organizations (NAACOS) said a survey it conducted showed that 71% of ACOs would likely leave the MSSP over concerns about the government forcing ACOs to accept more risk before they are ready.
In a statement, NAACOS said the proposal "will upend the ACO movement by creating havoc with a significant overhaul introducing many untested and troubling policies."
"The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered health care industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries,” said NAACOS President and Chief Executive Officer Clif Gaus.
The proposed plan would end the current track 1 model as well as the 2-sided track 2 and track 3 models and replace them with new tracks called Basic and Enhanced.
Under Basic, ACOs would begin a 1-sided model and incrementally phase-in higher levels of risk that, at the highest level, would qualify as an advanced alternative payment model (APM) under the Quality Payment Program. Under Basic, ACOs could only stay in 1-sided risk for 2 years, down from the current 6 years. The maximum shared savings rate would be 25% during the first 2 years, and 50% in years 3 through 5.
ACOs which previously participated in track 1 would be limited to just 1 year in the 1-sided model, however.
Under Enhanced (a version of the existing track 3 model) ACOs would have providing additional tools and flexibility in exchange for greater risk.
Comments on the proposed rule will be accepted until mid-October.