Study finds 33% of ACOs took on major risk in 2018 as new program starts

A new survey found that only 33% of accountable care organizations have at least one contract that takes on greater risk, and the results come as the Trump administration implements a revamp to the program.

The number of ACOs taking on downside risk, where the organizations pay back the government for any losses from not meeting healthcare savings targets, has increased from 28% in 2012, according to the survey results published this week in Health Affairs.

The survey sample included 862 ACOs out of the 1,011 operating in 2018, and 55% responded to the questionnaire.

The small hike in ACOs taking on downside risk from 2012 to 2018 comes as the number of ACOs exploded fivefold during that time, the survey said. The ACOs that took on downside risk in 2018 largely had a different ownership structure than other ACOs.

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Only 43% of the downside risk ACOs were led by a physician. Downside risk ACOs were more likely to be jointly led by a hospital and physicians, led by a hospital or some other arrangement such as through a county or state government.

“While similar in proportion of ownership by hospitals, downside-risk ACOs were more likely than other ACOs to be owned by other entities, including public ownership, nonprofit ownership, or another privately owned for-profit entity,” the survey results said.

There has also been an increase in the variety of contracts that ACOs pursue. For example, in 2012 only 42% of ACOs had two or more payers such as Medicare or commercial insurance. That number spiked to 63% in 2018.

The National Association of ACOs told FierceHealthcare that the survey shows that risk-bearing ACOs are bigger and already have experience implementing value-based care.

“This shows the success of risk-bearing ACOs may be tied more to their experience in delivery system reform rather than risk,” the organization said.

The survey was published on July 1, the same day that a raft of changes to the Medicare Shared Savings Program, which manages the ACOs, went into effect.  

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The Centers for Medicare & Medicaid Services’ overhauled program called “Pathways to Success” requires ACOs to take on a downside risk model within two years. An ACO can take on one-sided risk, where they don’t have to pay back the government for any missed cost savings targets, for two years and then will transition to downside risk over a three-year period.

Under the previous program, an ACO could stay in a one-sided risk model for up to six years.

CMS has estimated the new program will save the federal government $2.2 billion over the next decade. About 12 million Medicare beneficiaries are in a Medicare ACO as of last year, the agency added.

While NAACOS supports the shift to greater risk, the transition must be done smoothly, the group said. If it is too fast, then ACOs will not want to participate in the program, “robbing patients and taxpayers of the benefits ACOs can bring.”