Considering becoming an ACO? These are the common traits of those most likely to succeed

A dollar sign created by Monopoly game houses is surrounded by Monopoly money. Dice and the car token appear next to the dollar sign as well.
A new report highlights common traits of ACOs that have successfully taken on greater risk. (Getty Images/martince2)

As the feds look to push accountable care organizations to more quickly take on greater risk, a new report highlights common traits of ACOs that have already successfully taken that leap. 

Leavitt Partners analyzed ACOs across Medicare, including the Medicare Shared Savings Program, Pioneer ACOs and Next Generation ACOs, to find common threads among programs finding success and identify ways to better support those that are being left behind. 

The report found that larger, more experienced ACOs were more likely to switch to tracks with higher risk than younger programs. ACOs taking on greater downside risk were more likely to be in urban or metropolitan areas, according to the study. 

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

This suggests there’s more work to be done to support smaller, newer ACOs and those located in more remote or rural areas, the researchers said. 

RELATED: Executive Spotlight—CEO Farzad Mostashari says Aledade supports the doctors ‘doing God’s work’ 

“I think that these findings would suggest that any opportunity to allow providers to work together more within their markets would be helpful to them,” Robert Richards, Ph.D., senior data analyst at Leavitt Partners and one of the report’s authors, told FierceHealthcare. “There seems to be something about just being able to pool more resources or to have access to more resources, especially in the startup phases, that seems to give a better launch pad to downside risk.”

The Centers for Medicare & Medicaid Services has finalized a plan that aims to push ACOs in the Medicare Shared Savings Program into greater risk in a shorter amount of time. Under the revamped Pathways to Success model, new “low-revenue” or physician-led ACOs will have three years to take on greater risk, while all other new ACOs will have two years. Existing organizations will have one year, CMS said. 

Richards said the “glide path” approach accelerates greater risk-sharing while allowing new groups time to adjust to operating an ACO. 

“Based on these findings, that seems like an approach that would square with setting providers up to be successful,” he said. 

RELATED: ACOs should plan for shorter path to greater risk in CMS’ overhauled MSSP 

Leavitt Partners also found that the ACOs that do switch tracks and take on greater risk showed greater savings—and thus earned greater shared savings. However, the study didn’t find a correlation between taking on risk and improved care quality. This indicates that providers participating in an ACO were already doing well on quality, so taking on greater risk didn’t necessarily boost quality scores a significant amount, Richards said. 

And though there was a link between geography and ability to take on risk, the study didn’t link greater risk and certain population factors, such as members’ health behaviors and rates of chronic illness, he said. 

“It’s not entirely about the market,” Richards said. “By and large, the market isn’t explaining everything.” 

Suggested Articles

To build scale and drive greater savings, providers in some regions are banding together in statewide Medicare accountable care organizations. 

CMS issued updated Medicaid guidance on regulations for state-run home and community-based services.

Regulators warn that suggestions to address surprise bills, such as rate setting and payment caps, come with significant downsides for states.