ACO Participation Hits New Low as Biden Administration Takes Over

January 25, 2021 - Accountable care organization (ACO) participation in the Medicare Shared Savings Program has hit a new low in 2021, according to new data from CMS.

The data dropped by CMS this week showed that 477 ACOs are participating in Medicare’s flagship ACO program in 2021, down from 517 ACOs in 2020.

The ACO participation number is a new low compared to the last four years under the Trump administration. In 2016, CMS recorded 433 ACOs in the Shared Savings Program. ACO participation increased to a program high of 561 ACOs in 2018, but has declined since with 487 ACOs in 2019 and 517 ACOs in 2020.

Despite reductions in ACO participation in the program, the number of lives covered by participating ACOs has remained steady, dipping from an all-time high of 11.2 million in 2020 to just 10.7 million in 2021. Even when ACO participation was at its highest in 2018, the number of covered lives was 10.5 million assigned beneficiaries.

The dip in ACO participation, however, has advocates of the value-based payment and care delivery model concerned about next steps as the Biden administration takes over.

“Our healthcare payment and delivery system needs to desperately change, and ACOs offer the leading way to make that happen. A steady erosion of ACO participation damages our ability to get to where we need to be,” Clif Gaus, Sc.D, president and CEO, of the National Association of ACOs (NAACOS), said in a statement upon the release of the data.

NAACOS has blamed several Trump-era health policies on the recent reduction in ACO participation, including the 2018 overhaul of the program called “Pathways to Success,” which decreased the amount of time ACOs could participate in upside-only financial risk tracks and cut the share of savings for most ACOs.

Under the Trump administration, CMS also closed the 2021 application period early for the Shared Savings Program because of the COVID-19 pandemic.

“Health Secretary Nominee Xavier Becerra and the incoming Biden administration need to re-examine the balance of incentives and risk to ensure ACO growth and continued savings to Medicare, which ACOs have a history of producing,” Gaus said.

NAACOs has recommended that HHS leaders increase ACO shared savings rates, give ACOs more in time upside-only risk tracks, make the ENHANCED track voluntary, and fix key benchmarking and risk adjustment issues, among other policy changes, in order to attract new ACOs to the program and retain existing ones.

The CMS dataset showed that most ACOs in the Shared Savings Program are still in upside-only financial risk tracks.

Just 41 percent of 2021 ACOs in the program are taking on downside financial risk, while 59 percent are in upside-only tracks (i.e., BASIC Track Levels A and B and Track 1). The tracks with downside financial risk include BASIC Track Levels C and D, BASIC Track Level E, ENHANCED Track, Track 1+ Model, and Track 2.

However, the percentage of ACOs in downside risk tracks did increase from 37 percent of Shared Savings Program ACOs in 2020.

All downside risk tracks except BASIC Track Levels C and D qualify as Advanced Alternative Payment Models (APMs) under MACRA’s Quality Payment Program.

CMS’ goal under the Trump administration was to put more Medicare ACOs on the path to assuming downside financial risk. The agency believed that ACOs taking on more risk would achieve greater overall savings for Medicare while improving quality.

Shared Savings Program ACOs did save a record $1.4 billion in 2019, the most recent year for which CMS has complete data. Meanwhile, 2019 ACOs also achieved an average overall quality score of 92 percent.