Risk Management News

ACOs Seek CMMI Transparency for Downside Financial Risk Adoption

The National Association of ACOs and others say increased CMMI transparency will accelerate downside financial risk adoption by providing stability for providers.

Accountable care organizations (ACOs) and downside financial risk adoption

Source: Thinkstock

By Jacqueline LaPointe

- In an effort to promote downside financial risk adoption, accountable care organizations (ACOs) and other providers are calling on the CMS Innovation Center (CMMI) to increase transparency and improve stability.

The National Association of ACOs (NAACOS) and others are specifically seeking a more methodical and public process for releasing and updating alternative payment models (APMs) run by the federal agency’s innovation arm.

“To accelerate participation in APMs and the move to performance-based risk, we request that the Innovation Center continue to take steps to improve transparency and stability,” they stated in the March 26 letter to CMS Administrator Seema Verma and Deputy Administrator of CMMI Adam Boehler.

“As you know, responsibly moving to higher levels of financial risk requires a steady and predictable payment environment. This allows organizations to plan their budgets and care coordination activities and to predict how they will fare under any given model. Creating a clarity and stability for model design will encourage provider organizations to move to higher levels of risk and reward more quickly.”

The letter was also signed by the American Medical Group Association (AMGA), Association of American Medical Colleges (AAMC), Health Care Transformation Task Force, Medical Group Management Association (MGMA), National Coalition on Health Care, Next Generation ACO Coalition, Patient-Centered Primary Care Collaborative, and Premier.

READ MORE: Exploring Two-Sided Financial Risk in Alternative Payment Models

The ACO and provider associations believe a public process like the one used to communicate Medicare Advantage updates and changes would benefit providers looking to take on downside financial risk through APMs.

In Medicare Advantage, CMS regularly releases or sends Medicare Advantage rate notices and call letters, as well as letters to state Medicaid directors, to communicate important information regarding payment rates, coverage updates, and other critical policies. In general, updates and policy changes are public with some opportunity for stakeholder feedback without the formality of notice-and-comment rulemaking.

However, CMS does not apply the same procedures to the Innovation Center, the ACOs and providers contended.

“In contrast, in the current Innovation Center models, changes are often communicated through contract amendments – sometimes in the middle of a performance year,” the groups stated in the letter.

“As part of this new process, we request that the Innovation Center refrain from making mid-year changes, which have a significant programmatic or financial impact on model participants, and therefore create tremendous destabilization given the many decisions model participants make based on their unique circumstances and projections going into the performance year (unless such changes are optional or voluntary for program participants),” the letter continued.

READ MORE: Value-Based Contracts with Risk 3 to 5 Years Away for Providers

Publicly communicating APM design elements and stopping mandatory mid-year changes to APM design would help ACOs and providers evaluate and compare payment model options while still giving the Innovation Center the flexibility to run models that lower costs and improve quality, the groups added.

Additionally, allowing stakeholders to provide feedback would “strengthen the model portfolio over the long term and create stability and predictability that supports moving away from fee-for-service and fosters the movement to higher levels of risk and reward.”

ACOs are particularly seeking additional transparency and stability within the Innovation Center, NAACOS President and CEO Clif Gaus, ScD, added in a press release on the organization’s website. The majority of providers assuming downside financial risk through CMMI models are doing so through a Medicare ACO program.

“ACOs have shown they’re committed to new care models, including those with higher levels of risk and reward, but they need more information on what the future holds if they’re expected to fully embrace the Innovation Center’s work,” he said. “Our Next Generation Model ACOs have been waiting anxiously for months to see what future options will be available, and their experience could be shared to improve the Innovation Center’s work.”

Earlier in 2019, Congress members also urged CMS to improve CMMI transparency.

READ MORE: How Accountable Care Organizations Can Prepare for Downside Risk

“We have long been advocates for healthcare innovation. However, significant policy changes made unilaterally by the executive brand without sufficient transparency could yield unintended negative consequences for beneficiaries and the healthcare community,” House Committee on Ways and Means leaders Richard Neal (D-MA) and Kevin Brady (R-TX) wrote in a Jan. 9 letter to CMS.

“We strongly urge the Agency to provide more sunshine in this process, and allow Congress, beneficiaries, and stakeholders greater opportunity to provide feedback into the policies that CMMI tests that affect millions of American with Medicare.”

The Affordable Care Act required CMS to develop CMMI to design, implement, and test alternative payment and care delivery models that could reduce costs, improve quality, and advance patient-centered care.

To date, CMMI is operating or has announced over 45 payment and/or care delivery models.

However, a 2018 Government Accountability Office (GAO) report found that only four alternative payment models as of the report’s publication date had successfully reduced costs while maintaining or improving care quality, or improved care quality while maintaining or decreasing costs.

CMS acknowledges the lack of significant progress with some of its models. For example, the agency called out the Medicare Shared Savings Program (MSSP) for failing to meet CMS cost reduction goals.

The agency believes encouraging ACOs and other providers to take on downside financial risk will move the needle with APMs like the MSSP. Therefore, the agency overhauled the largest Medicare ACO program to decrease the amount of time ACOs have to assume downside risk.

“After six years of experience, the time has come to put real ‘accountability’ in Accountable Care Organizations. Medicare cannot afford to support programs with weak incentives that do not deliver value,” Verma stated in an August 2018 announcement.  “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.”

CMS plans to implement the MSSP changes in July 2019.