Newly confirmed Health and Human Services Secretary Xavier Becerra needs to reverse a slide in participation among accountable care organizations, the National Association of ACOs (NAACOS) said.
The advocacy group wrote in a letter to Becerra on Monday that HHS should also set a national goal to have the majority of Medicare beneficiaries within an ACO within four years. Other recommendations include strengthening incentives to attract new ACOs and keep around existing ones.
“The transition to value should not be taken for granted, while much progress has been made in the past decade, this transformation is threatened,” the letter from NAACOS President Clif Gaus said. “While much progress has been made in the past decade, this transformation is threatened.”
The letter said that at the start of this year there are 477 ACOs participating in the Medicare Shared Savings Program, down from a high of 561 from 2018. The amount is also the lowest since 480 participated in 2017 in Trump’s first year in office.
At the same time, ACOs generated $2.6 billion in gross savings for Medicare and $1.2 billion in net savings after accounting for paying bonuses to ACOs and collected shared loss payments. An ACO agrees to take on financial risk and gets a cut of any savings it generates for meeting spending and quality benchmarks but agrees to pay back any losses to Medicare.
NAACOS is concerned about the impact of the Trump-era program “Pathways to Success,” which calls for ACOs to take on financial risk earlier.
“That overhaul included some damaging provisions such as a cut to the share of savings most ACOs are eligible to keep and a push for ACOs to assume risk too quickly,” the letter said. “These policies have chilled ACO growth and should be changed.”
NAACOS also called for Becerra to adopt a goal of most traditional Medicare beneficiaries to be in an ACO by 2025. The group said that in 2019 there were 11.2 million beneficiaries out of more than 60 million in an ACO in the Medicare Shared Savings Program.
Other changes requested by the group include:
- Making the Next Generation ACO model, which calls for ACOs to take on higher risk, permanent. The was set to expire at the end of 2020 but was extended through this year due to the pandemic.
- Adapt ACO and any alternative payment model methodologies to factor in anomalies from the pandemic, which has caused healthcare utilization to plummet.
- Increase ACO shared savings rates and fix major benchmarking and risk adjustment issues within the Medicare Shared Savings Program.
- Allow more time for ACOs before requiring them to take on financial risk and give ACOs more timely and complete data.
The letter comes as the Biden administration has already made several moves to delay or pull models that have been announced but not launched. For instance, it has pulled the geographic direct contracting model that would tie spending and quality targets to regional health outcomes. The administration has told Fierce Healthcare it is doing a review of many payment models.