New bill seeks to reverse slide in ACO participation with more shared savings

US capitol building
New legislation aimed at spurring more providers to become ACOs includes key changes to how benchmarks for such organizations are calculated. (Getty Images)

New bipartisan House legislation aims to boost the amount of shared savings that accountable care organizations can receive from the federal government to halt a slide in participation that has occurred over the past two years.

The Value in Health Care Act reintroduced on Tuesday includes new requirements to study health outcomes for Medicare beneficiaries in ACOs and fee-for-service.

The law makes a series of “sensible modifications to the existing [alternative payment model] parameters and encourages more providers to participate,” said Rep. Suzan DelBene, D-Wash., in a statement. “This ultimately helps seniors by improving the quality of care and outcomes.”

The legislation would increase the size of shared savings that an ACO can get. It also will modify the risk adjustment process that determines whether ACOs reach spending thresholds to better reflect factors that providers in the program could encounter such as health or community risk variables.

ACOs are required to meet certain spending and quality thresholds. If an ACO meets quality metrics and lowers spending below a certain level then it gets a share of any savings, but if spending exceeds that limit then it must repay Medicare the difference.

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Other provisions include extending the annual lump sum participation bonus for another six years and aims to provide more fair and accurate benchmarks, which is used to calculate the spending targets that ACOs must meet.

The legislation was introduced in the last Congress, but it did not advance out of the House.

A major change was to add a requirement for the Government Accountability Office to study health outcomes for beneficiaries assigned to an ACO compared to beneficiaries in traditional fee-for-service. The requirement comes as the Biden administration is considering requiring model participants to submit race and ethnicity data in exchange for participation in payment models.

Other co-sponsors of the legislation are Reps. Peter Welch, D-Vt., Darin LaHood, R-Ill., and Brad Wenstrup, R-Ohio.

Lawmakers hope that the provisions in the Value in Health Care Act will entice more providers to sign up for the program.

Currently, there are 477 ACOs participating in the Medicare Shared Savings Program (MSSP) in 2021, down from a high of 561 in 2018 and the lowest amount since 480 participated in 2017.

ACO advocates have said that changes made by the Trump administration to MSSP that require participants to take on financial risk faster and cut shared savings were a major driver in the decline.