After Slowdown, ACO Participation in Shared Savings Program Grows

January 30, 2024 - More accountable care organizations (ACOs) are participating in Medicare programs this year, including a new, permanent payment option in the Shared Savings Program.

CMS recently announced ACO participation growth in the Medicare Shared Savings Program, bringing total participation to 480 ACOs in 2024. That number includes 50 new ACOs, 71 renewing ACOs, as well as the 19 ACOs participating in the new payment option.

The Shared Savings Program payment option kicked off this year, enabling ACOs to receive more than $20 million in advance investment payments. CMS designed the upfront payments to support ACOs caring for rural and underserved populations, including infrastructure, technology, and resources needed to succeed in Medicare’s largest ACO program. The payment option was finalized in the 2023 Medicare Physician Fee Schedule final rule.

The new ACOs in the payment option will use the advance investment payments to hire community health workers, implement health assessment and screening tools, and implement quality improvement activities, like care management systems and electronic quality report, according to CMS.

CMS also reported that 245 organizations will continue their participation in two ACO models run by the CMS Innovation Center — ACO Realizing Equity, Access, and Community Health (ACO REACH) and the Kidney Care Choices (KCC) models.

“One of CMS’ top priorities is to expand access to quality, affordable health coverage and care,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “Accountable care initiatives – which give more tools to health care providers to deliver better care and help people receive more coordinated care – through programs like the Medicare Shared Savings Program and the Innovation Center accountable care initiatives are critical to achieving this vision.”

ACOs are groups of physicians, hospitals, and other healthcare professionals who voluntarily work together to coordinate high-quality care for attributed patients with the goal of improving health outcomes and managing costs.

CMS intends for the three ACO programs to increase access to high-quality care, with the ACO REACH model targeting underserved populations, including rural areas, and the KCC tracks focusing on Medicare beneficiaries with chronic kidney disease and end-stage renal disease.

In total, CMS expected 13.7 million Medicare beneficiaries to be aligned with an ACO, meaning nearly half of all Traditional Medicare beneficiaries will be attributed to an ACO this year.  About 10.3 million beneficiaries will be part of the Shared Savings Program.

ACO participation in the Medicare Shared Savings Program will also grow this year from 456 ACOs in 2023. Participation in Medicare’s flagship ACO program has waned over the past couple of years as providers dealt with the COVID-19 pandemic and new rules that required them to assume downside financial risk sooner.

CMS also noted that over 9,000 federally qualified health centers, rural health clinics, and critical access hospitals will be joining the program in 2024, representing a 27 percent increase from last year.

The ACO REACH Model will include 122 ACOs, including over 1,000 federally qualified health centers, rural health clinics, and critical access hospitals. Meanwhile, the KCC model will include 123 Kidney Contracting Entities and CMS Kidney Care First practices, with a 10 percent increase in participating providers and organizations.

The National Association of ACOs (NAACOS) said that growth in overall Medicare ACO participation can be attributed to changes put in place this year that supported providers joining value-based care models. Those changes included improvements in quality reporting, more favorable benchmarking policies, a smoother transition to a new risk adjustment model, and retention of advanced payments for new ACOs who transition to risk.

However, the group is calling for further changes to encourage greater participation in value-based care models, like Medicare ACO programs. NAACOS recommends that CMS correct the benchmark ratchet that makes it difficult for ACOs to create sustainable savings and improve reporting requirements to make it less burdensome for providers. They also asked for updated patient engagement requirements and hybrid primary care payments, as well as more options for risk.

Bolstering ACO participation to a top priority for CMS as its Medicare programs embody some of the agency’s strategic goals.

“The strong participation in our accountable care models in 2024 will help more people access high-quality, coordinated health care that will improve their quality of life,” CMS Deputy Administrator and Innovation Center Director Liz Fowler said in the statement. “The ACO REACH and KCC models are a cornerstone of our strategy to transform the health care system, focus on equity in everything we do, and deliver person-centered care that meets people where they are.”