CMS pushes ACOs to take on more risk with Medicare Shared Savings Program overhaul

CMS Administrator Seema Verma speaking at a podium at the Commonwealth Fund on July 25, 2018
Administrator Seema Verma said CMS "doesn't think there's any point" in continuing upside-only arrangements with ACOs. (YouTube)

A long-awaited proposal from the Trump administration will ask accountable care organizations (ACO) to take on more risk going forward, a move that is likely to drive providers out of the program.

The proposed rule (PDF) issued by the Center for Medicare & Medicaid Services (CMS) on Thursday, shrinks the amount of time ACOs can be in an upside only model to two years. Currently, 82% of ACOs participating in the Medicare Shared Savings Program (MSSP) are in an upside only model.

Additionally, those in a Track 1 upside only model would only be able eligible to take in 25% of any savings. Under the current program, Track 1 ACOs take a 50% cut. In an upside model, ACOs get a portion of any savings generated in treating patients but are still paid by CMS if they incur losses.

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“We think it’s time for the program to evolve and we want to start working with ACOs that are serious about delivering value,” CMS Administrator Seema Verma said in a press call.

RELATED: Most ACOs would flee Medicare program if pushed to take on more risk

CMS expects to save $2.24 billion over the next decade as a result of the changes.

The new program would be called “Pathways to Success.” The agency estimates 109 ACOs will leave the program by 2028 as a result of these changes.

However, a survey by the National Association of ACOs in May found 71% of ACOs in nonrisk tracks that entered the program in 2012 and 2013 would leave the program before taking on more financial risk.

“Our focus is on delivering value,” Verma told reporters. “We don’t think there’s any point in continuing arrangements where providers are taking waivers from the federal government and actually losing money.”

In a statement, NAACOS called the rule "misguided" adding that it will "upend the ACO movement by creating havoc with a significant overhaul introducing many untested and troubling policies."

“The administration’s proposed changes to the ACO program will halt transformation to a higher quality, more affordable, patient-centered health care industry, stunting efforts to improve and coordinate care for millions of Medicare beneficiaries.” said NAACOS President and CEO Clif Gaus.

The Health Care Transformation Task Force was cautiously optimistic.

"At first pass, the proposed rule presents novel ideas and careful thinking on how ACOs may better lower cost and improve patient outcomes," said Executive Dirctor Jeff Micklos in a statement. 

RELATED: ACOs skittish over MSSP rule delay as CMS silence creates mounting uncertainty

ACOs were increasingly concerned about the tight timeframe to participate in next year’s program. Because of the delay, CMS is proposing a one-time six-month extension for ACOs whose contract ends in 2018. Likewise, new participants will have a special July 1, 2019 start date with a spring 2019 application period.

Among the other changes in the proposed rule, ACOs would be required to notify patients that they are assigned in an ACOs. Providers would be allowed to reward patients with gift cards for good health, and ACOs could receive reimbursement for treating patients in their home via telehealth.