Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Risk Management News

71% of MSSP ACOs Likely to Quit Rather Than Assume Downside Risk

Two-thirds of the MSSP ACOs that must take on downside financial risk in 2019 according to program rules would remain if they could continue in Track 1, a survey showed.

Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs) and downside financial risk

Source: Thinkstock

By Jacqueline LaPointe

- The Medicare Shared Savings Program (MSSP) is requiring the 82 accountable care organizations (ACOs) that started in upside-only financial risk tracks in 2012 or 2013 to take on downside financial risk by 2019. However, the majority of these organizations are likely to leave instead of assuming more risk, a new survey from the National Association of ACOs (NAACOS) indicated.

Seventy-one percent of MSSP ACOs are likely to leave the voluntary program instead of assuming downside financial risk, revealed the survey of about 35 MSSP ACOs that are required to assume downside financial risk in 2018.

“These results paint a bleak future of what will happen if the government keeps its mandate to push ACOs into risk,” stated Clif Gaus, President and CEO of NAACOS. “It’s naïve to think ACOs that aren’t ready will be forced into risk in what is ultimately a voluntary program. 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. This would be a real setback for Medicare payment reform efforts.”

The MSSP continues to grow, with 561 organizations participating in 2018, according to the most recent program data from CMS. However, about 82 percent of the ACOs are currently in Track 1, which only contains upside financial risk.

2019 will mark the first year that Track 1 ACOs that started in 2012 or 2013 will be forced to assume downside financial risk as their program agreement states. This could spell trouble for the growing program, NAACOS explained.

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

“While this survey focuses on a select group of ACOs facing risk requirements for 2019, forcing ACOs into risk will become an annual issue as more ACOs move through their second agreement periods,” the report stated. “It would be devastating to see ACOs quit the program year over year as a result of risk requirements, especially considering the progress we are starting to see from ACOs.”

The MSSP saved Medicare $652 million in 2016, an analysis by the Health Care Transformation Task Force found. Over one-half (56 percent) of the ACOs reduced their healthcare spending and about 31 percent earned shared savings payments.

However, the MSSP ended up paying more in shared savings payments than the program received in net returns.

While the MSSP struggled to generate a net profit, the program’s ACOs still reported significant quality improvements. The average composite quality score of MSSP ACOs in 2016 was 93.4 percent, an analysis in the Health Affairs blog showed.

MSSP ACOs that earned shared savings payments in 2016 also had substantial reductions in inpatient hospital expenditures and utilization, as well as declines in home health, skilled nursing facility, and imaging expenditures, NAACOs reported.

READ MORE: The Future of Accountable Care Organizations Involves Risk

CMS may jeopardize the MSSP’s initial successes by failing to address ACO concerns with assuming downside financial risk. The top reasons the surveyed ACOs cited for not being prepared to assume downside financial risk were:

• Amount of risk is too high (39.4 percent)

• Concerns about unpredictable program or CMS rule changes (39.4 percent)

• Want more reliable financial projections (39.4 percent)

READ MORE: Examining the Role of Financial Risk in Value-Based Care

• Concerns about past performance (36 percent)

“The challenges to assuming risk are not surprising and highlight that CMS needs to face the reality about how the majority of ACOs view risk,” Gaus commented. “ACOs need to gain confidence through successful performance in a one-sided model in order to be prepared to assume risk.”

“Given challenging program rules and benchmarks, achieving shared savings remains a hurdle for many, which is why we advocate for program and benchmarking changes. We also need to see more realistic levels of risk, provide greater predictability of rules and allow more reliable financial projections – ideally through greater use of prospective benchmarks which provide an upfront spending target for ACOs.”

In addition to prospective benchmarks, NAACOS also advised CMS to allow Track 1 ACOs to continue in the upside-only track for a third agreement period. About two-thirds (66 percent) of surveyed organizations said they would be “completely likely” or “very likely” to continue participation in the MSSP if CMS permitted them to continue as Track 1 ACOs.

NAACOS called on CMS in February 2018 to extend Track 1 participation for MSSP ACOs that are required to take on downside financial risk in 2019. The extension would give the organizations more time to prepare for downside financial risk adoption.

Savings and quality improvements take time in the MSSP, the group argued. The Health Affairs blog report showed that the rate of MSSP ACOs realizing shared savings payment was 20 percent of organizations in their first year versus almost 40 percent of those in their fourth performance year.

“Transforming care delivery and achieving successful payment reform is a long road,” Gaus concluded. “Let’s keep ACOs on the right path by allowing those that demonstrate results in cost and/or quality to remain in a one-sided model for at least one more contract term. At the same time, we need to fix program rules to enable ACO success and provide new opportunities to attract ACOs into two-sided models.”

X

Join 30,000 of your peers and get free access to all webcasts and exclusive content

Sign up for our free newsletter:

Our privacy policy

no, thanks

Continue to site...