Medicare advisers mull altering bonus payments for ACOs

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Medicare advisers have mulled a proposal to solidify and expand an incentive payment for ACOs, which could lead organizations to take on more risk. (Getty/monkeybusinessimages)

A stronger payment incentive for certain coordinated care organizations could be the key to reducing healthcare costs, according to the primary group that advises Congress on Medicare policy.

At a public meeting last week, members of the Medicare Payment Advisory Commission (MedPAC) discussed possible tweaks and changes to accountable care organizations (ACOs), including expansion of a major bonus incentive payment. ACOs and other coordinated care programs have been touted as ways to curve the costs of healthcare spending and improve patient outcomes. 

In an April 6 presentation (PDF), MedPAC staff members outlined several problems they found concerning within the various ACO programs under Medicare along with possible remedies.

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MedPAC proposed expanding the 5% bonus payments for advanced alternative payment models under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Currently, the incentive payment creates a "cliff" that MedPAC said provides no bonus if certain thresholds are not met. The commission proposed eliminating the thresholds and paying the 5% bonus payment only on certain revenue derived from advanced alternative payment models.

The change would make the bonus more equitable and incentivize more organizations to take on risk-based tacks, according to the commission. 

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MedPAC also addressed a concern that certain health specialists might not have a place in ACO models that are in risk-based models focused on providing cheaper primary care.

The proposals, if recommended by the commission, could get traction in Congress or the Department of Health and Human Services (HHS). The discussion follows a recent push by industry and HHS to have organizations take on more financial risk. Risk-based ACOs are the only type that has led to decreased federal spending, a major goal of the programs. 

Allison Brennan, vice president of policy at the National Association of ACOs told FierceHealthcare she is encouraged the commission is open to recommending changes to problems she considers shortcomings.

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"It is vital that key program methodologies like benchmarking and risk adjustment be fixed," she said. "I also appreciated and agree with the commissioners comments that more needs to be done to invest in ACOs in the early years of the program, which they noted was a similar tactic used to get Medicare Advantage off the ground."

MedPAC also discussed provisions of the Bipartisan Budget Act of 2018 that passed in February that impact ACOs. The legislation allows ACOs to pay patients for primary care visits with ACO providers and gives organizations greater flexibility to use telehealth, something advocated by CMS Administrator Seema Verma. 

The commission's next public meeting is not scheduled until early September.