CMS proposal speeds ACOs toward risk-based models

CMS proposed on Aug. 9 an overhaul to accountable care organizations (ACOs), which would require ACOs to more quickly assume financial risk. But critics predict the changes will cause a mass exodus from the Medicare Shared Savings Program.

CMS’s proposed rule limits upside-only models to two years, while the current setup allows for a six-year no-risk period in which organizations can share in cost savings but aren’t financially penalized for not meeting benchmarks.  

“After six years of experience, the time has come to put real ‘accountability’ in accountable care organizations,” CMS Administrator Seema Verma, MPH, said in a statement. “Medicare cannot afford to support programs with weak incentives that do not deliver value. ACOs can be an important component of a system that increases the quality of care while decreasing costs; however, most Medicare ACOs do not currently face any financial consequences when costs go up, and this has to change.”

Critics of the proposal predict the changes will cause a mass exodus from the Medicare Shared Savings Program. Meanwhile, CMS estimated the rule would result in $2.24 billion in Medicare savings over 10 years. About 82 percent of ACOs participating in 2018 are not taking on downside risk, and CMS data has shown the average ACO in those models winds up increasing federal spending.

“It’s naïve to think that ACOs that aren’t ready can be forced to take on risk, given that the program is voluntary,” Clif Gaus, president and CEO of the National Association of ACOs, said in a statement. “The more likely outcome will be that many ACOs quit the program, divest their care coordination resources and return to payment models that emphasize volume over value.” 

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