Industry on Medicare ACO plan: too much risk too fast
Comments have closed on the proposed CMS rule to overhaul the Medicare Shared Savings Program (MSSP), a controversial plan that would force accountable care organizations (ACOs) to take on more financial risk sooner than originally scheduled.
This is a critical moment for CMS, as the agency now faces the question of how hard and how far to push providers into taking on risk — something they have historically been averse to, despite a chorus of experts who say providers need skin in the game to push them toward value-based care.
Here's what CMS wants: While ACOs currently have six years to shift to a risk-bearing model from a shared savings-only model, the proposed rule would give existing ACOs one year and new ACOs two years. It would also slash shared savings rates for upside-risk models from 50% to as low as 25%.
Needless to say, providers aren't happy, and many ACOs in the program warn they'll drop out if CMS finalizes its proposal as is. Some major industry groups have implied the agency is cracking down on the program in an attempt to kill it, despite the fact ACOs are widely regarded as harbingers of value-based care.
5 takeaways from our #MSSP #ACO comments— Travis Broome (@Travis_Broome) October 17, 2018
1) 25% shared savings is too low to support ROI for population health - change to 40-60% range for Basic track
2) Lowering the MSR for physician led ACOs is a great way to get more of them in and moving to risk https://t.co/zeI5WMmxlJ 1/
In its public comments on the proposed rule, the American Hospital Association warned CMS that "as a whole, the proposals in the rule would likely result in a significant decrease in MSSP participation." The association urged a compromise on how much time would be allotted to new ACOs that wish to stay in an upside-only model, suggesting CMS allow those ACOs three years instead of two .
That suggestion was echoed by the American Medical Group Association in its comments. Even the Health Care Transformation Task Force, a mixed group of industry players that originally applauded the proposed rule, submitted a comment calling on CMS to dial back on forcing ACOs out of upside-risk prematurely.
"On average, ACOs' performance improves over time, those ACOs participating for a longer period of time show greater savings," that group wrote, cautioning CMS against finalizing a rule that would force ACOs out of the program. "Providers should be encouraged to join the program now and gain experience over time with graduating levels of performance-based risk to maximize long-term gains."
The American College of Physicians supports creating a path for ACOs to take on more risk but "firmly opposes strict limits" the rule places on how long ACOs can remain in a shared savings model. Two years, they said, is "not a sufficient amount of time" for new ACOs to jump into a risk-bearing model.
Further, the group wrote, cuts to shared savings rates would trigger a "mass exodus" from the program.
AMGA said cutting the shared savings rates "weakens what are already nominal financial incentives." Most groups argued that the rate should not dip below 50% for upside-only ACOs.
Respondents in a National Association of ACOs (NAACOS) survey of 127 MSSP ACOs identified cuts to shared savings rates as the biggest challenge held in the proposed rule. Those shared savings payments, according to NAACOS, are used by ACOs to "fund critical activities and infrastructure" like health IT, hiring and population health management.
@ACPinterests tell @CMSGov ACOs need ROI to survive. Cut shared savings rates in half and you can expect participation rates to drop! ACOs are saving Medicare money. Why mess with a good thing? https://t.co/mwD642MtEW— Shari Erickson (@SEricksonACP) October 17, 2018
At the time of the proposal, CMS said it anticipated 109 of the current 649 participants to drop out of the program by 2028. Industry groups like AHA and NAACOS think it could be more.
Only 27% of respondents in the ACO association survey favor the proposed rule. More than 60% reported opposition and 12% remained neutral. Nearly half of respondents said they'd be likely to continue in the program if the policies were revised, while 36% said they would be unlikely to continue.
An earlier survey showed 71.4% of ACOs would rather drop out than assume more financial risk.
Industry groups also take issue with CMS' mode of evaluating performance for MSSP, a method AHA said is "not a statistically valid program evaluation."
The savings the program has produced, according to AMGA, are "widely under-appreciated" when considering CMS measures ACO performance against what several groups believe to be flawed financial benchmarking formulas.
HCTTF encouraged CMS to adopt a more "formal" program evaluation, writing in its comment that the CMS method "underestimates true savings to the Medicare program." AHA estimates savings generated by MSSP ACOs could be underestimated by as much as 39%.
In a letter sent to CMS Administrator Seema Verma last month, a coalition of nine industry groups including NAACOS, America's Essential Hospitals and America's Health Insurance Plans advised patience and requested more time for MSSP ACOs to mature and produce measurable results.
"ACOs are investing millions of dollars of their own capital to make these care improvements, even though Medicare does not recognize these start-up and ongoing investments in its calculations of ACO savings, losses and costs," the letter reads.
While anything could happen, Verma seemed adamant about the rule on a phone call with reporters in August.
"It's time for the program to evolve. It's time for ACOs to start taking upside and downside risk," Verma said at the time. "What the data tells us is that ACOs taking two-sided risk are delivering better results."
Not long after the rule was proposed, CMS touted results from the first year of its Next Generation ACO Model, which carries the most risk of any current ACO model — organizations take on 80% to 100% two-sided risk and, according to CMS, saved Medicare roughly $62 million in 2016 while maintaining quality of care for patients.
The evaluation of the 1st yr of NGACOs shows #ACOs can & do succeed in a model that includes assuming high levels of risk & reward (w/ two sided risk from 80% to 100%), flexible options in payment & a variety of opportunities for ⬆ beneficiary engagement. https://t.co/4DxGx9ZY71— Administrator Seema Verma (@SeemaCMS) August 27, 2018
The agency had been using a recent Avalere analysis that shows ACOs increased government spending by $384 million between 2013 and 2016 to prop up its proposal. In a turn of events, newer CMS data was published showing that the program actually saved a net $314 million to the Medicare Trust Fund in 2017.
That year, more than 90% of MSSP ACOs took part in the no-risk model. With this rule, CMS is proposing to totally phase out its no-risk track by 2020.
- Healthcare Dive CMS proposes Medicare ACO revamp to force risk
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