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In early May, CMS Administrator Seema Verma signaled that the agency intends to push more of its MSSP Track 1 ACOs into taking on downside risk. Now, the industry is awaiting an agency rule under federal review that might force the issue.
A recent study from Avalere found that upside-only ACOs have cost CMS a total of $444 million, while two-sided Track 2 and 3 MSSP ACOs have saved $60 million over five years. Given that in 2010, the Congressional Budget Office projected MSSP ACO savings of $1.7 billion, it shouldn’t surprise Track 1 ACOs that the pressure to show results or migrate up the risk chain is on.
Projections were likely optimistic that ACOs could hit estimates within their initial three-year run. Many have elected to remain in Track 1 status after that initial participation period. As we’ve learned in working with our customers, there’s a lot to put in place to take on risk and manage an ACO, such as including sharing actionable data, risk-stratifying patients, getting clinicians on board and managing care so that you can influence utilization.
But gradually gaining that experience is invaluable. Philips Wellcentive’s 10 MSSP ACO customers generated a total of $18.6 million in value-based revenues in 2016, and supports a health system operating within the Next Generation ACO model, which carries the highest level of risk.
For other systems, the new Track 1+ model, which carries intermediate risk, may be a good fit. Like within other two-sided risk ACOs, participants qualify as an Advanced Alternative Payment Model (AAPM) within MACRA, meaning exemption from MIPS reporting and access to a five percent incentive bonus on billings.
It is expected the new CMS rule, vaguely titled “Medicare Shared Savings Program/Accountable Care Organizations,” may not extend Track 1 status past the initial three-year signup period, but may also propose new risk elements to ease the transition. Upwards of 80 percent of all CMS ACOs are Track 1, and many have remained in that status going on six years.
By design, one-sided or Track 1 MSSPs don’t share losses with CMS upon overspending benchmarks, but do share in the gains, which leaves CMS to shoulder the losses alone.
In reaction to Verma’s announcement, many upside-only ACO representatives say they may leave the MSSP program if they are made to take on more risk, but time will tell if CMS rulemaking follows Verma’s words and whether ACO governance boards are bluffing or serious about dropping out.
Meantime, the beginning of 2018 saw gains in CMS ACO participation across the board. Just more than a dozen new Next Generation ACO participants were announced for 2018, bringing the total of ACOs taking on the most risk to nearly 50.
Next Generation ACOs also enjoy AAPM status within MACRA, and have been recognized via recent Congressional legislation. Included within the Chronic Care Act – which itself was included in the Bipartisan Budget Act that kept the government open in February – is a provision granting waivers for expanded telehealth coverage for Next Generation providers.
Also for 2018, CMS announced that 51 participants did migrate up the risk chain into Track 1+ status. All told, more than 100 new MSSPs were announced, bringing the total to more than 500 across the country. Again, we’ll have to see if ACOs pushed into risk will indeed drop out of the program or find ways to make it work.
Critics of “ACO squatting” note that it’s too safe for a Track 1 ACO to remain so, all while health systems continue to consolidate. MSSP advocates say tweaks such as allowing prospective assignment of beneficiaries will help their cause, a change that was also included in the Chronic Care Act.
For those electing to migrate or end up facing the proposition of taking on risk, there are some fundamentals to consider:
It’s understandable that ACOs are concerned about managing downside risk, but done right it may actually increase margins over time, along with realizing benefits from MACRA and other policy levers.
Our ACO readiness checklist can help ACOs determine and track status over time in four key areas:
The National Association of ACOs, of which Philips Wellcentive is a member, is also a very good resource of information and news.
Greg Fulton,
Industry & Public Policy Lead, Philips
Greg Fulton is Industry & Public Policy Lead for Philips PHM. He has extensive health IT experience in government relations at Congressional, Health & Human Services, state and industry organizational levels. He is a current member of the CommonWell Health Alliance Government Affairs Advisory Council and the HIMSS Government Relations Roundtable.
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