News Release

October 16, 2018

National Association of ACOs Comments on Proposed Medicare Rule and Includes Notable Findings from Recent ACO Poll 

WASHINGTON – Sixty percent of accountable care organizations (ACOs) said in a new survey that they would have been unlikely to have entered the Medicare Shared Savings Program (MSSP) under revised policies laid out in a proposed rule by the Centers for Medicare and Medicaid Services (CMS). The MSSP currently includes 561 ACOs that collectively care for 10.5 million Medicare patients, and CMS has proposed a number of changes in its “Pathways to Success” rule that would make major modifications to the program. While there are many positive changes included in the rule, there are a number of concerning provisions as well, all of which the National Association of ACOs (NAACOS) commented on in its letter to the agency in response to the proposed rule. 

“NAACOS stands ready to work with CMS to update the Shared Savings Program in a way that works better for patients, providers, and the long-term financial future of Medicare without inadvertently forcing ACOs and providers to remove themselves from the bipartisan goal of lower-cost, higher-quality care,” said Clif Gaus, Sc.D., President and CEO of NAACOS. “NAACOS believes that ACOs should take on risk. But the speed of CMS’s proposed path to risk and the agency’s proposal to significantly cut financial incentives will make participation in this voluntary program untenable for new ACOs.” 

The proposed Pathways to Success rule represents a meaningful overhaul of the MSSP, and NAACOS supports efforts to modernize the program and improve it through providing increased program stability and predictability and allowing more program flexibility and opportunities to engage beneficiaries. However, NAACOS has concerns with other proposals in the rule and in a 39-page comment letter submitted to CMS today, NAACOS urged CMS to: 

Reverse the agency’s proposal to reduce the shared savings rate from 50 to 25 percent for ACOs in shared savings only or low risk models. Instead, NAACOS recommends that shared savings rates should be 50 percent for Basic Levels A and B, 55 percent for Basic Levels C and D, and 60 percent for Basic Level E. 

Allow ACOs entering the program to remain in a shared savings-only model for four years with an additional fifth year available for those that demonstrate superior performance. NAACOS data shows that of the 142 ACOs that earned shared savings payments in 2017, 36 percent had losses in one of their first two years of the program, illustrating the need to allow ACOs adequate time to prepare for risk. 

Not finalize the distinction of high and low revenue ACOs. The proposed 25 percent threshold of ACO participant revenue as a percent of total ACO spending for the assigned population appears arbitrary and creates division where none should exist. All ACOs should be on the same path to assuming risk. 

Finalize the proposal to enact extended, five-year agreement periods. Many ACOs have expressed the desire to have more program stability and predictability and shifting to longer agreement periods will enable that. 

Finalize proposals to more gradually introduce risk and to permanently include the current Track 1+ Model in the MSSP (renamed Basic Level E). Introducing a smoother glidepath to risk as proposed in the Basic Track will help prepare ACOs and permanently adding the Track 1+ equivalent fills a critical gap in the program’s risk structure. 

Allow risk adjustment to change by +/-5 percent over an agreement period, rather than the proposed +/-3 percent. Benchmarks should reflect risk changes so ACOs are fairly judged on performance without being unfairly expected to manage an overall population’s increasing disease burden. 

The NAACOS survey on the proposed rule was conducted through a web-based questionnaire from late September through early October. It was sent to all MSSP ACOs and drew 153 responses from 127 unique ACOs, representing 23 percent of MSSP ACOs. The findings support NAACOS’s comments. Fifty-seven percent of respondents reported concern with cutting shared savings rates for many ACOs from 50 percent to as low as 25 percent; 51 percent reported concern with designating ACOs as “high” or “low” revenue and requiring more risk sooner for “high revenue ACOs”; 43 percent reported concern with shortening the time for shared savings-only ACOs from six years to two years; and 31 percent reported concern with capping risk adjustment at +/- 3 percent across five-year agreement periods. Overall, the survey findings build on a NAACOS spring survey of just the 82 ACOs that began the MSSP in 2012 or 2013 and remain in Track 1 in 2018, which revealed 71 percent of those were likely to drop out of the program if required to take on risk starting next year. 

As one respondent to the more recent survey noted, “The majority of proposed changes in the proposed rule are logical when isolated by themselves, but what appears to have been lost is that this rule now creates a significant barrier to entry and/or continuation for many organizations. If MSSP is to remain a growth engine for accountable care, the rule will need to be softened to allow organizations time to adjust their infrastructures.” 

The ACO model is a market-based solution to fragmented and costly care that empowers local physicians, hospitals, and other providers to work together and take responsibility for improving quality, enhancing patient experience, and reducing waste. The origins of Medicare ACOs date back to the George W. Bush Administration, and ACOs have been instrumental in the shift to value-based care. 

Among the other recommendations NAACOS offered to CMS:

  • Allow ACOs to participate in the Enhanced Track on a voluntary basis without requiring participation;
  • Focus on more appropriate program integrity provisions and not finalize the policy that allows CMS to terminate ACOs’ participation if spending exceeds a certain amount for two years;
  • Maintain incorporating a regional spending component into ACO spending targets (i.e., benchmarks) at the current maximum of 70 percent, rather finalizing a policy to diminish the role of regional spending;
  • Allow ACOs with agreements that expire in 2018 the option to extend their agreements through December 2019;
  • Finalize the proposed beneficiary incentive program;
  • Finalize waivers for expanded telehealth use and eliminating the requirement for a three-day hospital stay before entering a skilled-nursing facility; and
  • Rely on ACOs’ attestation to electronic health record use and exclude ACOs from MIPS electronic health record (EHR) reporting requirements.