CMS' ACO proposal resurfaces discord over pace of risk-based models

A stethoscope and paper money.
A former Obama official offered rare praise for the Trump administration's ACO overhaul. Meanwhile, a prominent ACO advocacy group called the proposal "misguided." (Getty/utah778)

Obama-era healthcare officials have rarely had positive things to say about the Trump administration's actions. But last week, one expressed praise for CMS' most recent proposed rule.

The rule (PDF), which would limit the duration of one-sided risk ACOs, is a step in the right direction, said Farzad Mostashari, M.D., who served as the National Coordinator for Health IT under President Obama.

"The overall framework that they have ... a basic track and then an enhanced track, I think, is a good framework," said Mostashari, who has since founded the ACO company Aledade.

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"Among our ACO brethren, I am probably unusual," he told FierceHealthcare. 

But Mostashari isn't alone. Jeff Micklos, executive director of the Health Care Transformation Task Force, called the rule "an important step to push the industry's momentum forward," adding that policymakers should "separate the wheat from the chaff."

"We believe in a glide path to two-sided risk," Micklos explained. "Letting [one-sided ACOs] hang around for six years or even longer really just seems counterintuitive to us."

However, the National Association of ACOs (NAACOs), an advocacy group that represents more than 300 ACOs, quickly denounced the proposal as "misguided" and argued it would "upend the ACO movement." 

RELATED: Most ACOs would flee Medicare program if pushed to take on more risk

The varying reactions, even among ACO policy gurus, illuminates long-standing disagreements about the impact of ACOs and how quickly they should take on more risk. While CMS's data shows upside-only ACOs lost nearly $50 million in 2016, researchers say the agency's methodology for measuring savings is flawed.

A 2016 study in the Journal of the American Medical Association found spending reductions in upside-only ACOs outpaced bonus payments, resulting in a net savings of $287 million in 2014.

Likewise, a report (PDF) by the Office of Inspector General last year found ACOs reduced spending by $1 billion during the first three years of the program. Auditors concluded that ACOs may need time to adjust to program requirements. 

NAACOs argues ACOs need more stability after being forced to respond to frequent changes in the program. The group's members say a lack of incentives and consistent financial projections hinder the growth of two-sided risk models. 

"The ground is moving under their feet, in other words, and it’s hard to go back to their boards to ask for time and resources when you don’t have a good, predictable program," David Pittman, NAACOS' health policy and communications advisor, said in an e-mail to FierceHealthcare.

Continuing one-sided models allows ACOs to "develop and gain the experience, confidence, and success they need in order to feel ready to move to a two-sided ACO model," according to Allison Brennan, NAACOs' vice president of policy.

CMS expects 20 ACOs to leave the program in 2019, and 109 to leave by 2028. Brennan said these estimates "are far too low."

Mostashari, however, did not see this potential exodus as cause for concern.

"The goal shouldn't be how many ACOs we have. The goal should be how many successful ACOs there are for improving care for patients," he said. 

"There are a lot of ACOs where you do ask the docs, 'what are you doing?' and they’re like, 'nothing. We’re doing nothing.' What good is that doing anybody—to be in an ACO where you’re not doing anything?" he added. 

Mostashari was not without criticism for the proposal. Since the ACO program is currently based on the calendar year, the July 1 start date in the proposed rule will cause confusion and waste time, he said.

He pointed to tweets from Travis Broome, vice president of policy at Aledade, explaining how a Jan. 1, 2019 start date is still feasible.

Aledade alone has six ACOs "ready to go to the big boy risk program," Mostashari said.

Lynn Barr, CEO of ACO system Caravan Health, echoed this sentiment. "Our members are ready" to take on risk "sooner rather than later," she said.

Additionally, the benchmarks are a quid pro quo, Mostashari said. In a Health Affairs blog post, CMS Administrator Seema Verma said the proposal would shift benchmarks to more closely resemble the Medicare Advantage program, which calculates payments based on beneficiary health status. 

"If you’re going to make people go to two-sided risk, please, please make the program more predictable," he said. "You can’t have all this noise in the benchmark, and frankly, some unfairness in the benchmark, to rural ACOs, and expect people to go to risk."