CMS’s Verma: Upside-only ACOs not working

CMS Administrator Seema Verma, MPH, said accountable care organizations (ACOs) that haven’t taken on downside risk “are not producing results,” suggesting the agency could reevaluate those payment models.

Speaking at the American Hospital Association’s annual meeting, Verma added the ACOs which have taken on downside risk have “shown significant savings to the Medicare program while advancing quality.” But the majority of ACOs are still on one-sided models where they can share in cost savings but don’t risk losing money if costs increase relative to quality benchmarks.

“These ACOs are actually increasing Medicare spending, and the presence of these upside-only tracks may be encouraging consolidation in the marketplace, reducing competition and choice for our beneficiaries,” Verma said. “While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results.”

Upside-only ACOs are supposed to move toward two-sided models after two agreement periods in the program, but some organizations have asked for an extension to allow them to stay in their current setups. Requiring these organizations to move to a risk-based model could cause the majority to leave the voluntary program, according to HealthExec.

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