The Medicare agency’s push for greater savings may spur departures from a program in which groups of doctors, hospitals, and other health-care providers coordinate care for patients.
The Centers for Medicare & Medicaid Services proposal represents a potential rollback of an Obamacare innovation whose performance has sparked debate over whether regulations as written are too richly rewarding the participating groups.
The CMS estimates 109 fewer of the groups—known as accountable care organizations (ACOs)—could participate in the Medicare Shared Savings Program in the next decade due to requirements in a proposed rule (RIN:0938-AT45) that these groups share in financial risk for their patients’ health-care spending instead of sharing only in savings.
“It’s naïve to think that ACOs that aren’t ready can be forced to take on risk,” Clif Gaus, president and CEO of the National Association of ACOs, said. “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.”
There are 561 ACOs in the savings program, and all would be affected by this rule, according to the Centers for Medicare & Medicaid Services. Those ACOs serve 10.5 million Medicare beneficiaries. The proposed rule estimates that Medicare would save $2.2 billion. Some providers predict smaller savings.
The MSSP was set up under the Affordable Care Act and is an alternative payment model, a type of payment system where providers earn rewards for delivering high quality and cost-efficient care in exchange for taking on risk. Accountable care organizations are groups of doctors, hospitals, and providers who coordinate care for patients and are rewarded for providing high-quality care while creating savings for Medicare. ACOs can share in the savings to Medicare if they meet certain quality standards.
Agency vs. Providers
The restructuring of this program was likely because the CMS has repeatedly said ACOs that take on no risk are losing money. CMS Administrator Seema Verma said in a call with reporters Aug. 9, “We can no longer continue to run a program that was losing money.”
Researchers and health-care consultants have disagreed about the success of ACOs, especially those that take on no risk. This is partially due to how success is evaluated by Medicare.
The CMS thinks “they can cherry pick the better-performing ACOs in the current program,” to get the high cost of savings estimated in the proposed rule, Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, said.
The CMS is “pulling the rug out from ACOs by redoing the program in a short timeframe with untested and troubling polices,” Gaus said in a statement. “To shrink and disable this leading alternative payment model in its early stages defies logic.”
When final, the rule will go into effect July 1, 2019.
The proposed rule, released Aug. 9, could be a “significant setback of moving medical groups toward value-based care,” Gilberg told Bloomberg Law. The CMS has been touting the move to value-based care and has said alternative payment models like MSSP are a way to get there. If providers leave ACOs, they would likely return to fee-for-service Medicare.
The estimate of 109 fewer ACOs in the program dramatically underestimates the number of ACOs that would be lost, Allison Brennan, vice president of policy at the National Association of ACOs, told Bloomberg Law. Seventy-one percent of ACOs that joined the MSSP in 2012 or 2013 said they were likely to leave the program if they were required to assume risk, according to a 2018 survey by the National Association of ACOs.
The rule could result in a fundamental correction in the ACO market, Frank Exposito, executive vice president of finance and strategy at Orange Care Group, told Bloomberg Law Aug. 13.
The changes could push out low-performing ACOs, which could help the entire program, David Muhlestein, chief research officer at Leavitt Partners, told Bloomberg Law Aug. 13.
Impact on Doctors and Patients
Some ACOs may pull out of the program because it would be difficult for them to transition from the current version of the program to the new version in the middle of a calendar year, Josh Seidman, senior vice president at the Washington health-care policy consulting firm Avalere Health, told Bloomberg Law Aug. 13.
It is more challenging for providers to coordinate care for their patients if they leave the program, Seth Edwards, principal performance partner in population health at Premier Inc., told Bloomberg Law Aug. 13. Providers lose access to data to understand their patient population, use plans for care, and waivers, Edwards said.
Not all health-care consultants are worried about a lower level of care coordination if providers leave their ACOs. Muhlestein said beneficiaries likely won’t notice a lot of changes because ACOs that have invested time and effort in their care coordination are less likely to leave the program.
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