MedPac: Next 3-year cycle of ACOs should involve more risk

Medicare accountable care organizations should involve additional risk in their next three-year cycles, penalizing the ACOs when they don't meet spending targets, according to members of the Medicare Payment Advisory Commission (MedPAC), MedPage Today reported.

The recommendations would mean a shift from an initial cycle of one-sided risk and a chance to share savings, but no penalties for not meeting spending goals, MedPAC members said.  

"Our policy is built around the principle that we wanted to make entry into ACOs relatively easy because we think it's a good idea," MedPAC member Scott Armstrong, president and chief executive of Group Health Cooperative, told MegPage Today. "But once groups are in, we want to start making it harder, and we want to start pushing more on this idea of being accountable for outcomes for populations."

They suggest the next three-year-cycle involve two-sided risk--still allowing for share savings, but putting them at risk of penalities if they fail to meet spending targets. MedPAC is also coming up with recommendations for a new generation of ACOs that will be selected in 2015. 

Some MedPAC members expressed concern that meeting the higher standards will be too much, seeing as nine of the original 32 Pioneer ACOs that agreed to two-sided risk have dropped out of the program.

"We want to be able to encourage a transition, but you can't do it in big leaps," said Alice Coombs, M.D., of the Milton Hospital and South Shore Hospital in South Weymouth, Mass., in the article. "You can't jump from fee-for-service and go all of a sudden into an ACO that's willing to bear a two-sided risk."

ACO growth has slowed and the downward trend is expected to continue because the market is tapped out, there is no proven ACO model and payers are reluctant to offer ACO contracts, FierceHealthcare previously reported.

To learn more:
- here's the article

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.