MSSP Sees Drop in New ACO Participation Under Pathways to Success

July 18, 2019 - CMS selected 206 accountable care organizations (ACOs) to participate in the Medicare Shared Savings Program (MSSP) under Pathways to Success, including 41 entirely new ACOs and 25 re-entering the program, the agency’s head reported in the Health Affairs blog.

The ACOs, which started on July 1, 2019, are the first class to participate in the MSSP following a major overhaul of the program, which now requires participants to assume downside financial risk sooner at reduced shared savings rates and rebrands the program as Pathways to Success.

Industry leaders, including the National Association of ACOs (NAACOS), feared new Pathways to Success rules would negatively impact MSSP participation. However, CMS Administrator Seema Verma said the new participation data disproved those hypotheses.

“[T]oday’s results show that American providers are ready for the value-based transformation and are willing to accept greater accountability in exchange for more flexibility,” she wrote in the blog post. “The participation rates for July 1, 2019 are in line with what the agency projected when Pathways to Success was launched, putting CMS on track to generate the $2.9 billion in savings over ten years that were projected.”

Nearly half of the ACOs starting on July 1, 2019, are also taking on downside financial risk, meaning the organizations will have to pay back CMS up to at least two percent of their revenue or one percent of their cost target if they exceed their financial benchmark, Verma reported.

Furthermore, ACOs in the inaugural Pathways to Success class are taking on risk at a greater level. Forty-five percent of all ACOs starting on July 1, 2019, are on the hook for at least eight percent of their revenue or four percent of their cost target. The downside financial risk levels qualify the ACOs as an Advanced Alternative Payment Model (APM) under the Quality Payment Program, Verma noted.

The greater number of ACOs taking on downside financial risk should lead to higher savings for beneficiaries and stronger incentives for ACOs to coordinate care and enhance care quality, Verma stated.

Most MSSP ACOs do not assume downside financial risk through the program. As of July 1, 2019, only 29 percent of MSSP ACOs had assumed risk for spending increases above their benchmark, the blog post stated.

CMS has found that MSSP ACOs that did not assume risk for cost increases and remained in upside-only risk tracks nominally increased Medicare spending compared to their financial benchmarks. On the other hand, ACOs that took accountability for cost increases decreased Medicare spending relative to benchmarks after accounting for shared savings and losses.

The federal agency anticipates the greater downside financial risk adoption in Pathways to Success to generate more savings while incentivizing higher care quality.

However, NAACOS expressed reservations about the newly released participation data. The industry group representing ACOs nationwide voiced concerns that the limited number of new ACOs joining Pathways to Success could impede overall program success.

On average, more than 100 new ACOs joined the MSSP in the first seven years of the program. Under the Pathways to Success rules, there are now 518 ACOs in the MSSP versus 561 last year, NAACOS reported.

“This is a pivotal time for the transition to value, and we need to accelerate ACO adoption to effectively bend the Medicare cost curve,” said Clif Gaus, ScD, NAACOS president and CEO. “We hope this smaller class is only a reflection of an off-cycle start date and not an indication that the program and transition to value are slowing down.”

But Pathways to Success participation could increase in the next six months. CMS is opening another application cycle for participation starting in January 2020, when the MSSP would typically start.