NAACOS: CMS must provide upfront funds, raise benchmarks to help ACOs close health equity gaps

A sticky note says Medicare on top of a pile of money
Giving accountable care organizations upfront funding to serve rural areas is one of the ways ACOs can help close health equity gaps, a new white paper says. (Getty/Steve Dunning)

The Biden administration needs to provide money upfront to help form accountable care organizations in rural areas and give more financial support to address health equity, a new report finds.

The National Association of ACOs (NAACOS) released a white paper Wednesday that outlines a series of recommendations to better position organizations to help address health equity, a key priority for the Biden administration.

“ACOs are already beginning to do the work of addressing [social determinants of health] to improve quality and control costs for the patients they serve,” according to the report. “However, they cannot be broadly effective or achieve desired outcomes without the proper funding and support.”

More funding is needed to support an expansion of ACO social services that can address social determinants of health, the paper said.

The Centers for Medicare & Medicaid Services (CMS) could give ACOs grant funding to expand connections with community-based organizations. Another avenue is the Center for Medicare and Medicaid Innovation (CMMI), which could create a voluntary model for ACOs that addresses health equity.

An ACO would use upfront funding to address these gaps in patient populations.

“If the ACO generates shared savings, the initial investment could be recouped by CMS; and if it does not generate savings, the funds would be forgiven by CMS as long as the ACO remains in the program,” the white paper recommended.

An ACO agrees to repay Medicare if it doesn’t meet certain quality and spending targets but keeps a share of any savings.

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CMMI should also increase the benchmarks to help ACOs that treat vulnerable populations. The benchmark determines the spending target that an ACO must meet to qualify for savings.

Getting better patient outcomes for those in vulnerable populations will require more funding, hence the need to increase the benchmarks so that ACOs still qualify for savings, the white paper said.

“Providers are often not compensated for addressing these social risk factors in order to improve health outcomes,” NAACOS said. “Due to the lack of investment in this area, providers are not able to address these concerns with their patients and are often discouraged from even screening for unmet social needs without being able to connect patients with adequate, appropriate resources.”

CMS also needs to create new supplemental services that enable ACOs to get reimbursed for certain benefits such as transportation.

The agency already pays separately for chronic care management services, which reimburse providers for coordinating care for patients with multiple chronic conditions.

But the benchmarks aren’t the only things that need to be improved for ACOs. CMMI should make targeted improvements in the quality requirements that ACOs must also meet.

“In combination with providing additional funding to do more targeted work with this population, stratifying quality measure performance by race and ethnicity as a starting point could provide ACOs with additional opportunities to improve the health of the population they serve,” the paper said.

CMMI Director Liz Fowler, Ph.D., has said the agency will start to incorporate policies to close health equity gaps in its payment models soon. Some of the policies may include requiring ACOs to collect race and ethnicity data as a requirement for participation.