- Accountable care organizations that take on financial risk are more likely to be bigger, horizontally and vertically integrated, to have been exposed to other types of payment reform and have more ACO contracts across variable payer types, a new study finds.
- The report in Health Affairs' July issue also found the proportion of ACOs taking on downside risk has remained relatively stable over the past six years. Among ACOs formed in 2012, 28% initially had at least one contract with downside risk. By 2018, that figure had grown to only 33%.
- The "modest" increase in the proportion of ACOs with a downside risk contract between 2012 and 2018, taken in tandem with the fact that the number of ACOs has multiplied five times since 2012, could indicate that the actual number of organizations with a downside risk contract could have also grown substantially over the time period, researchers said.
Accountable care organizations are one of the most common value-based payment models as the nation's healthcare ecosystem continues to transition from fee-for-service to paying for quality.
There are currently more than 1,000 ACOs across the country, covering almost 33 million lives and representing almost 1,500 different commercial and public payment arrangements, according to an August study in Health Affairs.
And though traditionally providers have been leery about assuming downside risk, meaning they would lose money if they fail to meet a set of quality and financial benchmarks, some studies indicate that aversion could be lessening.
Some 64% of senior provider finance executives say their organizations are ready to increase their level of risk over the next one to three years, according to a recent Navigant survey: 64% through commercial payer contracting models, 57% through Medicare value-based models and 51% in Medicare Advantage plans.
And nearly three-quarters of physician groups said they would be ready to accept downside risk payments in the next two years, an increase from 42% in 2015, trade association AMGA found.
CMS has also been pushing more models with risk. The agency announced in April it is mulling over changes to the Medicare Share Savings Program and one of the tracks in the primary care program, optioning a range of models with paths for small practices and large organizations from partial shared risk to full downside risk.
However, though these findings suggest an increase in the commonality of value-based arrangements, the fact that the proportion of ACOs with downside risk has remained largely stagnant suggest policymakers and stakeholders have much to do to strengthen the breadth and depth of incentives, researchers said.
Between 2012 and 2018, the proportion of ACOs with contracts with two or more payers increased from 42% to 63%. In 2018, 84% of ACOs contracted with Medicare, 72% with commercial payers and 23% with Medicaid. ACOs with downside risk that year were also much more likely to have providers with experience in different payment models, including in bundled or episode-based payment, MA, capitated commercial plans and other contracts with risk.
ACOs bearing downside risk were less likely to be physician-led (30% to 39%) and be owned by other public, nonprofit or for-profit entities, Health Affairs researchers found. They were also more likely to be integrated delivery systems (58% to 42%), include a hospital or have a greater number of hospitals.
Health Affairs researchers looked at data from the National Survey of Accountable Care Organizations from 2012 to 2018 to see how ACOs have evolved over time. One driver of the variance in taking on downside risk was Medicare program timing, researchers found, as the Pioneer and Next Generation ACO programs could only be joined in 2012 and between 2016 and 2018, respectively.
"While we were able to determine the presence of downside risk, we did not know the extent of this risk," researchers wrote, noting many contracts either limit downside risk or that risk may only apply to some of the organization's clinicians.